Formalization is the process of creating structures that govern operations within an organization. In a formalized organization, work activities are often controlled by a set of accepted rules and procedures. In addition, a formalized structure has a hierarchical and clear reporting structure that runs from bottom to top. To a large extent therefore, a formalized organization is managed through several levels of supervision. The extent of formalization, however, varies from one organization to another and is mainly determined by the size of the organization.
As opposed to informational organizational structures where individuals are esteemed higher than the job positions, a formal organizational structure is made up of rules that unmistakably state how work should be done at the various levels in the hierarchy. Since rules that guide the holder of a position are static, no confusion arises when the holder of the position changes. This thus implies that the transition process is streamlined.
Advantages of Formalization
There are several advantages of a formalized organizational structure. First, the process of succession is quite simplified. Regardless of the occupant of a position, rules and procedures in a formalized structure very clearly stipulate what has to be done by the holder of the office. Formalization thus facilitates a smooth transition in case an employee has to leave the organization or gets promoted to a different position.
Secondly, a formalized structure allows all employees to understand what is expected of them and this helps management to ensure that everyone works toward the realization of an organization’s vision and mission. As noted earlier, the rules and procedures that govern operations at every level do not change. As such, a new occupant to an office easily fits into the structure. Undoubtedly, this enables an organization to minimize time wastage in the event that a transition has to take place.
Thirdly, a formalized structure simplifies the process of aligning work activities with organizational goals and objectives. All employees are guided by a plan put in place to ensure that everyone works to accomplish what is agreed upon.
One of the key advantages of formalization is the fact that formal organization have easy to fathom leadership structures that are placed in concert by the given rules and regulations thereby eliminating the question of who is in control of the organization. The formal organizational structure leaves no chance for misconception of the modus operandi and processes.
Formalization also improves rationality of organizations that applies it as it seeks to standardize attitudes by enabling precise predictability. A good example is the standardization of production processes for the production unit workers in an organization with the aim of ensuring quality before products are released into the market.
The other significant benefit of the formalization is the fact that they offer fundamental framework of the division of labor and responsibilities. Lack of such structures makes employees to concur on roles and responsibilities. It therefore creates clarity on the level of assistance and input that every worker can anticipate from another and what is anticipated of him in return.
The system also promotes discipline amongst the staff in the organization as it aims at controlling the attitudes of the worker and improving on the efficiency of the organization.
Other benefits of formalization include the fact that it enables easy and fast assessment and revision of the organization as a result of the changing requirements and dynamic operating environment. It also offers a framework for the structuring of pay scales and in the human resource development practices such as recruitment, elevation and workforce planning.
Disadvantages of Formalization
A formalized organizational structure has a number of drawbacks. The rigidity of the structure leaves very little room for innovation. Occupants of a given position are expected to operate within certain boundaries and this kills the spirit of invention among staff. As a result, formalized structures are considered unsuitable for a field characterized by constant changes. Generally, a dynamic environment requires managers to keep changing tact in order to cope with existing competition.
Secondly, the rigid nature of a formalized structure also limits the originality of individuals. Employees are compelled to depend on management to provide solutions to any challenges encountered. This dependency syndrome may work against the organization especially when employees come across situations that require them to think and act immediately.
Although formalization and professionalism are expected to be the same, a number of studies indicate there is a mismatch between the two. To some extent, a formalized organizational structure may be blamed for the alienation of professional members of staff.