Formal organization is a fixed set of rules of intra-organization procedures and structures. As such, it is usually set out in writing, with a language of rules that ostensibly leave little discretion for interpretation. In some societies and in some organization, such rules may be strictly followed; in others, they may be little more than an empty formalism.

Distinction from informal organization

Formal rules are often adapted to subjective interests — social structures within an enterprise and the personal goals, desires, sympathies and behaviors of the individual workers — so that the practical everyday life of an organization becomes informal. Practical experience shows no organization is ever completely rule-bound: instead, all real organizations represent some mix of formal and informal. Consequently, when attempting to legislate for an organization and to create a formal structure, it is necessary to recognize informal organization in order to create workable structures. However, informal organization can fail, or, if already set in order, can work against mismanagement.

The Hawthorne Experiments

The deviation from rulemaking on a higher level was documented for the first time in the Hawthorne studies (1924-1932) and called informal organization. At first this discovery was ignored and dismissed as the product of avoidable errors, until it finally had to be recognized that these unwritten laws of work of everyday life often had more influence on the fate of the enterprise than those conceived on organizational charts of the executive level. Numerous empirical studies in sociological organization research followed, ever more clearly proving this, particularly during the Human Relations Movement. It is important to analyze informal structures within an enterprise to make use of positive innovations, but also to be able to do away with bad habits that have developed over time.

Reasons for informal organization

There are many different reasons for informal organization:

• Informal standards: personal goals and interests of workers differ from official organizational goals.
• Informal communication: changes of communication routes within an enterprise due to personal relations between coworkers.
• Informal group: certain groups of coworkers have the same interests, or (for example) the same origin.
• Informal leaders: due to charisma and general popularity, certain members of the organization win more influence than orginally intended.
• Different interests and preferences of coworkers.
• Different status of coworkers.
• Difficult work requirements.
• Unpleasant conditions of work.

Managerial organization theory often still regards informal organization as rather disturbing, but sometimes helpful. In the opinion of systems theory and cybernetics, however, formal organization fades into the background and only serves, if necessary, to supplement or to correct. Changes in structure always redevelop because of the conduct and differences among coworkers, and the ability of self-organization is recognized as a natural characteristic of a social system.

References

This article originated as a translation of the corresponding article (http://de.wikipedia.org/pac/Formale_Organisation) in the German-language Wikipedia (http://de.wikipedia.org). Retrieved November 21, 2004. That article gave the following references:

• Organisation, Manfred Schulte-Zurhausen, 3. Auflage 2002 München, ISBN 3800628252.
• Organisationstheorien, Kieser A., Kubicek H., 2 Bände 1978 Berlin.
• Betriebsführung und Arbeitsmoral, Roethlisberger F. J., 1954 Köln.