6.

4 Formal Organizations
 The Nature of Formal Organizations

 Deliberately created to achieve one or

more long-term goals
 High schools, colleges, corporations,
government agencies
 Most are also bureaucracies- formal
organizations based on rationality and
efficiency
 Think about a large organization with which you
frequently interact or think about someone that you
know does.
 Does the organization’s bureaucratic characteristics make
it more effective or efficient?
 Have you ever been upset when dealing with tis
organization?
 Do you think that the upsetting situation was related to
or caused by problems in the bureaucracy of the
organization?
 Do you think the problems of organization are related to
the attempts to be effective and efficient?
 Major Characteristics of
Bureaucracies
 A division of labor based on the principle of
specialization
 Each person is responsible for certain functions or tasks
 Hierarchy of authority
 Power- the ability to control the behavior of others, even against
their will
 Authority- the exercise of legitimate power that derives from a
recognized or approved source
 A system of rules and procedures
 provide a framework for decision-making
 Written records of work and activities
 Organizational “memory”
 Promotions on the basis of merit and qualifications
 Not favoritism, equal treatment for all
 Max Weber and Bureaucracies
 First to analyze the nature of the bureaucracy
 Earlier kinds of organizations, where decisions were
made on family or wealth, were not capable of dealing
with an industrial economy
 Fast-moving industrial economy required steadiness,
precision, continuity, speed, efficiency, and minimum
cost- all advantages
 Rationalization- the mindset emphasizing knowledge,
reason, and planning rather than tradition and
superstition was on the rise
 Bureaucracies are intended to protect people, not
undervalue them.
 Without rules, decision making would be arbitrary and without
reason.
 Informal Organizations
 Bureaucracies are designed to act as
secondary groups
 Primary relationships emerge as part of
informal organization
 Groups within a formal organization in which
personal relationships are guided by norms,
rituals, and sentiments
 Usually formed spontaneously
 Why do Informal Organizations
Develop?
 To meet the needs ignored by the formal
organization
 Bureaucracies tend to be impersonal,
informal organizations offer personal
affection, support, humor, and protection
 Iron Law of Oligarchy
 Sometimes power might be grabbed by individuals for
their own purposes in an organization
 Iron Law of Oligarchy- theory that power increasingly
becomes more and more concentrated in the hands of a
few members of any organization (Michels)
 Even in organizations intended to be democratic, a few
leaders eventually gain control
 Why?
 Organizations need a hierarchy of authority to delegate decision
making
 The advantages held by those at the top allow them to
consolidate their powers (loyal staff, use of resources)
 Other members tend to defer to leaders