6.4 Formal 6.4 Formal OrganizationsOrganizations

The Nature of Formal The Nature of Formal OrganizationsOrganizations

Deliberately created to achieve one Deliberately created to achieve one or more long-term goalsor more long-term goals

High schools, colleges, corporations, High schools, colleges, corporations, government agenciesgovernment agencies

Most are alsoMost are also bureaucracies bureaucracies- formal - formal organizations based on rationality organizations based on rationality and efficiencyand efficiency

Think about a large organization with which you Think about a large organization with which you frequently interact or think about someone that frequently interact or think about someone that you know does.you know does.

Does the organization’s bureaucratic Does the organization’s bureaucratic characteristics make it more effective or efficient?characteristics make it more effective or efficient?

Have you ever been upset when dealing with tis Have you ever been upset when dealing with tis organization?organization?

Do you think that the upsetting situation was Do you think that the upsetting situation was related to or caused by problems in the related to or caused by problems in the bureaucracy of the organization?bureaucracy of the organization?

Do you think the problems of organization are Do you think the problems of organization are related to the attempts to be effective and related to the attempts to be effective and efficient?efficient?

Major Characteristics of Major Characteristics of BureaucraciesBureaucracies

A division of labor based on the principle of A division of labor based on the principle of specializationspecialization Each person is responsible for certain functions or tasksEach person is responsible for certain functions or tasks

Hierarchy of authorityHierarchy of authority Power- the ability to control the behavior of others, even Power- the ability to control the behavior of others, even

against their willagainst their will Authority- the exercise of legitimate power that derives Authority- the exercise of legitimate power that derives

from a recognized or approved sourcefrom a recognized or approved source A system of rules and proceduresA system of rules and procedures

provide a framework for decision-makingprovide a framework for decision-making Written records of work and activitiesWritten records of work and activities

Organizational “memory”Organizational “memory” Promotions on the basis of merit and qualificationsPromotions on the basis of merit and qualifications

Not favoritism, equal treatment for allNot favoritism, equal treatment for all

Max Weber and Max Weber and BureaucraciesBureaucracies

First to analyze the nature of the bureaucracyFirst to analyze the nature of the bureaucracy Earlier kinds of organizations, where decisions Earlier kinds of organizations, where decisions

were made on family or wealth, were not capable were made on family or wealth, were not capable of dealing with an industrial economyof dealing with an industrial economy

Fast-moving industrial economy required Fast-moving industrial economy required steadiness, precision, continuity, speed, steadiness, precision, continuity, speed, efficiency, and minimum cost- all advantagesefficiency, and minimum cost- all advantages

Rationalization- the mindset emphasizing Rationalization- the mindset emphasizing knowledge, reason, and planning rather than knowledge, reason, and planning rather than tradition and superstition was on the risetradition and superstition was on the rise

Bureaucracies are intended to protect people, not Bureaucracies are intended to protect people, not undervalue them.undervalue them. Without rules, decision making would be arbitrary and Without rules, decision making would be arbitrary and

without reason.without reason.

Informal OrganizationsInformal Organizations

Bureaucracies are designed to act as Bureaucracies are designed to act as secondary groupssecondary groups

Primary relationships emerge as part Primary relationships emerge as part of of informal organizationinformal organizationGroups within a formal organization in Groups within a formal organization in

which personal relationships are guided which personal relationships are guided by norms, rituals, and sentimentsby norms, rituals, and sentiments

Usually formed spontaneouslyUsually formed spontaneously

Why do Informal Organizations Why do Informal Organizations Develop?Develop?

To meet the needs ignored by the To meet the needs ignored by the formal organizationformal organization

Bureaucracies tend to be impersonal, Bureaucracies tend to be impersonal, informal organizations offer personal informal organizations offer personal affection, support, humor, and affection, support, humor, and protectionprotection

Iron Law of OligarchyIron Law of Oligarchy

Sometimes power might be grabbed by individuals Sometimes power might be grabbed by individuals for their own purposes in an organizationfor their own purposes in an organization

Iron Law of Oligarchy- theory that power Iron Law of Oligarchy- theory that power increasingly becomes more and more concentrated increasingly becomes more and more concentrated in the hands of a few members of any organization in the hands of a few members of any organization (Michels)(Michels)

Even in organizations intended to be democratic, a Even in organizations intended to be democratic, a few leaders eventually gain controlfew leaders eventually gain control

Why?Why? Organizations need a hierarchy of authority to delegate Organizations need a hierarchy of authority to delegate

decision makingdecision making The advantages held by those at the top allow them to The advantages held by those at the top allow them to

consolidate their powers (loyal staff, use of resources)consolidate their powers (loyal staff, use of resources) Other members tend to defer to leadersOther members tend to defer to leaders