Formal Organization – Characteristics, Elements, Components And Advantages

Formal Organization is understood as the planned structure, governed by strict rules or standards and detailed procedures. They are under a specific order and hierarchy of positions, through which it is possible to successfully carry out the objectives and activities of any institution.

The formal organization of a company is based on the division of tasks, functions and work activities. For this purpose, it presents a structure that respects the type of responsibility and authority held by each position. In turn, workers can communicate through channels, respecting hierarchy levels.

The administrators and managers of an organization are responsible for establishing both its structure and the guidelines that will guide its future. All this information is distributed through regular channels to all members of the organization so that each worker knows the organizational culture, objectives, mission, and vision.

Usually, the rules and procedures, to carry out the work, are clear in writing and distributed to the members of the organization, with which each worker knows what to do, how to do it, the tools required for it and the time in which the activity is expected to end.

In this way, with its application and mandatory compliance, several things are ensured:

  • Knowledge and respect of the hierarchical order by all.
  • Knowledge and respect for working relationships between employees and their supervisors.
  • Work activities and functions will be carried out in the manner indicated, in the time stipulated for this.
  • Errors and the risk of occurrence of occupational accidents are minimized.
  • All workers know the same information.

Characteristics of a Formal Organization

Within the characteristics of a formal organization you can observe:

  • A clear formulation of business objectives.
  • The rules, standards, and procedures are detailed and specific, they are also known by each member of the company.
  • Clear delimitation of responsibilities, functions, activities, and tasks for each type of position and worker.
  • Well-defined physical spaces, physical infrastructure present.
  • Everyone knows who the boss is, the highest authority of the company, its role within the organization and the obligation that everyone has to abide by its rules.
  • Labor promotions, job promotions, salary increases, extra bonuses, and other similar ones are the result of a worker’s performance, not because of his friendship or sympathy with the boss.
  • Sending formal information through written communications, meetings, and other formal means.
  • All members of the organization must maintain an adequate, coherent and logical way.
  • Respectful work environment.

Elements of a Formal Organization

There are several elements that make up any formal organization:

  • The Division of Labor: the work is divided into basic activities and tasks, which are distributed among the workers.
  • Departmentalization: The organization is divided into specialized areas for the achievement of a specific objective. Responsible for compliance, has a leader or boss who distributes the work among the members of his team and supervises them.
  • Organizational Units: these are the basic areas of the organization, they are often made up of several Departments, for example, Production, Administration, Marketing and other similar ones.
  • The Control: is the mechanism available to the organization to evaluate its operation, by means of this it determines if its activity has not deviated from the previously formulated objectives or if it requires an adjustment to resume normal activity.

Advantages of a Formal Organization

  • Jobs and specialized workers for an activity
  • High efficiency and productivity
  • Clear division of tasks
  • Specific knowledge of hierarchical levels and functions
  • Formal communication and appropriate channels
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Ahmed Ismail

I'm a Civil Engineer. I like reading everything related to Business so I decided to launch the "Fast Grow Company" website to help Entrepreneurs in their business journey. Keep updated and follow us.

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