6.4 Formal Organizations

The Nature of Formal Organizations Deliberately created to achieve one or more long-term goals Deliberately created to achieve one or more long-term goals High schools, colleges, corporations, government agencies High schools, colleges, corporations, government agencies Most are also bureaucracies- formal organizations based on rationality and efficiency 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. 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? Does the organization’s bureaucratic characteristics make it more effective or efficient? Have you ever been upset when dealing with tis organization? 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 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? 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 A division of labor based on the principle of specialization Each person is responsible for certain functions or tasks Each person is responsible for certain functions or tasks Hierarchy of authority Hierarchy of authority Power- the ability to control the behavior of others, even against their will 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 Authority- the exercise of legitimate power that derives from a recognized or approved source A system of rules and procedures A system of rules and procedures provide a framework for decision-making provide a framework for decision-making Written records of work and activities Written records of work and activities Organizational “memory” Organizational “memory” Promotions on the basis of merit and qualifications Promotions on the basis of merit and qualifications Not favoritism, equal treatment for all Not favoritism, equal treatment for all

Max Weber and Bureaucracies First to analyze the nature of the bureaucracy 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 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 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 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. Bureaucracies are intended to protect people, not undervalue them. Without rules, decision making would be arbitrary and without reason. Without rules, decision making would be arbitrary and without reason.

Informal Organizations Bureaucracies are designed to act as secondary groups Bureaucracies are designed to act as secondary groups Primary relationships emerge as part of informal organization Primary relationships emerge as part of informal organization Groups within a formal organization in which personal relationships are guided by norms, rituals, and sentiments Groups within a formal organization in which personal relationships are guided by norms, rituals, and sentiments Usually formed spontaneously Usually formed spontaneously

Why do Informal Organizations Develop? To meet the needs ignored by the formal organization To meet the needs ignored by the formal organization Bureaucracies tend to be impersonal, informal organizations offer personal affection, support, humor, and protection 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 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) 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 Even in organizations intended to be democratic, a few leaders eventually gain control Why? Why? Organizations need a hierarchy of authority to delegate decision making 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) 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 Other members tend to defer to leaders