Page Contents
What is Formal Organization?
A formal organization is the structure of the organization that is officially formed by the management to achieve the defined goals. In other words, a formal organization refers to an organization that is formed under official rules and regulations to achieve defined objectives.
A formal organization is a structure of well-defined jobs with a prescribed system of communication, coordination, and delegation of authority. This structure is deliberately designed to enable people to work together for the achievement of common objectives.
Under this organization, there is a well-designed job for each individual. Besides, there is definite authority and responsibility for each individual to make the effectiveness of their efforts. There is a clearly defined official relationship between superiors and subordinates in the organization to achieve defined objectives.
Examples of formal organizations are Schools, Business Firms, Hospitals, Government Organizations, and other organizations that are officially formed.
- Scott – A formal organization is a system of coordinated activities of a group working towards a common goal under authority and leadership.
- Koontz and Weihrich – Formal organization means the intentional structure of roles in a formally organized enterprise.
The formal organization emphasizes working under established rules and regulations of the enterprise. There is an official line of communication among all the employees and a chain of official relations between superiors and subordinates.
Top-level management plays a key role to maintain coordination and mutual relation among all the formal structures to achieve common goals. However, the achievement of organizational objectives depends upon the ability of subordinates and management.
Characteristics of Formal Organization
The important features of formal organizations are as follows:
Deliberate Formation
A formal organization is intentionally created by management, demonstrating its purposeful nature. It is not an ad hoc arrangement but a consciously structured entity designed to fulfill specific objectives.
Specialization of Work
Within a formal organization, tasks are divided into specialized roles. This division allows individuals to concentrate on their area of expertise, leading to increased efficiency and proficiency in completing their assigned responsibilities.
Written Rules and Regulations
Formal organizations establish explicit procedural guidelines and protocols in the form of written rules and regulations. These documents serve as a reference point for decision-making, ensuring consistency, fairness, and uniformity in the organization’s operations.
Related: Weber’s Bureaucratic Theory of Management
Clear Authority and Responsibility
Every individual within formal organizations has a defined level of authority and corresponding responsibilities. This clarity empowers employees, enables effective decision-making, and ensures that tasks are performed with accountability.
Official Line of Communication
A formal organization establishes a structured system of communication, outlining the official channels through which information flows. This system minimizes miscommunication, enables efficient coordination, and facilitates the dissemination of relevant information to the appropriate individuals.
Task Orientation
A distinguishing feature of a formal organization is its focus on the job or task to be accomplished, rather than placing excessive emphasis on individual personalities. This approach promotes efficiency, as efforts are directed toward achieving organizational goals rather than getting entangled in personal dynamics.
Goal and Objective-driven
Formal organizations are goal-oriented, with a clear focus on achieving specific objectives. By aligning individual efforts with organizational targets, formal organizations foster a sense of purpose and direction, facilitating collective progress.
Also Read: Directing – Definition, Features, Components, and Importance
Difference Between Formal and Informal Organization
| Basis of Difference | Formal Organization | Informal Organization |
| Meaning | Formal organization refers to an organization that is established to achieve defined objectives through official regulations. | Informal organization refers to the an organization that is formed without having predefined rules and regulations to interact with people. |
| Objectives | It is created for the achievement of predetermined objectives. | It has no predetermined objectives. |
| Hierarchy | It has an official hierarchy of relations between various levels of management. | It has no specific hierarchy. It’s the structure is completely based on human emotions and sentiments. |
| Planning | Under this, formal relationships are well planned. | Under this, informal relations are unplanned, and they are created automatically. |
| Stable | It is usually stable. | It is usually unstable and does not last so long. |
| Communication | Communication is made through proper channels. | There is no fixed and established channel for communication. |
| Chain of Command | If follows the official chain of command and is generally unchanged. | It does not have any fixed chain of command. It is sentimentally based on members. |
| Disclosure | It reflects technological aspects. | It reflects human aspects. |
| Authority and Responsibility | There is a well-defined authority and responsibility. | Under this, personal relationships are automatically developed when people work together. |
| Size and Scope | Usually formal organization size is larger and has a larger scope that informal organization. | It is usually small in size and limited to a location or place. |