Define and discuss

Formalization

FORMALIZATION

Formalization is the degree to which organizations standardize behavior through rules, procedures, formal training, and related mechanisms.34 In other words, companies become more formalized as they increasingly rely on various forms of standardization to coordinate work. McDonald's Restaurants and most other efficient fast-food chains typically have a high degree of formalization because they rely on the standardization of work processes as a coordinating mechanism. Employees have precisely defined roles, right down to how much mustard should be dispensed, how many pickles should be applied, and how long each hamburger should be cooked.

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Older companies tend to become more formalized because work activities become routinized, making them easier to document in standardized practices. Larger companies also tend to have more formalization because direct supervision and informal communication among employees do not operate as easily when large numbers of people are involved. External influences, such as government safety legislation and strict accounting rules, also encourage formalization.

Formalization may increase efficiency and compliance, but it can also create problems.35 Rules and procedures reduce organizational flexibility, so employees follow prescribed behaviors even when the situation clearly calls for a customized response. High levels of formalization tend to undermine organizational learning and creativity. Some work rules become so convoluted that organizational efficiency would decline if they were actually followed as prescribed. Formalization is also a source of job dissatisfaction and work stress. Finally, rules and procedures have been known to take on a life of their own in some organizations. They become the focus of attention, rather than the organization's ultimate objectives of producing a product or service and serving dominant stakeholders.