Evolution of Formal Organizations

Utilitarian Organizations, Normative Organizations, & Coercive Organizations

Formal organizations are necessary structures for a well-functioning society. These types of organizations are distinguished from informal organization by the fact that they perform important or a necessary function or functions within society. For example, a university is a formal organization that is responsible for the function of higher education. The formal organization is also marked by its rules and culture as well as its authority. While all formal organizations possess these attributes, these structures differ widely in the organization and their membership and in the way that they have evolved in the last century.

There are three basic types of formal organizations: Utilitarian Organizations, Normative Organizations, and Coercive Organizations. Utilitarian organizations are organizations that pay individuals for services such as corporations and small companies. Normative organizations that are marked by their purpose being something members believe in such as volunteer organizations. Coercive organizations are organizations which are individuals are typically forced to become members as a result of necessity or punishment, i.e., jails and other institutions were membership is mandatory. All of these formal organizations have existed for thousands of years in one form or another. Organizations remained largely unchanged until the last century because of technology and tradition (Macionis, 2011).

Organizations prior to the industrial age were based largely in tradition. While tradition has many benefits such as creating stability and consistency; it is also limiting because it is a barrier to change and this limits growth and efficiency. With the growth of technology from the industrial age; organizations have evolved from a traditional operation to what is known as rationality. This is defined as,

…a way of thinking that emphasizes deliberate, matter-of-fact calculation of the most efficient way to accomplish a particular task. A rational worldview pays little attention to the past and is open to any changes that might get the job done better or more quickly (Macionis, 2011).

The evolution to rationality in organizations has created what is known as bureaucracy which “is an organizational model rationally designed to perform tasks efficiently (Macionis, 2011).” This model has been the primary type of organization and has been extremely beneficial to society allowing people to take advantages of services and products on a large scale which would not have been possible in the traditional organization model. For example, large corporations such as Microsoft are able to bring computers to market in a manner which all consumers are able to purchase the product almost immediately.

Despite the fact that formal organizations are more numerous today and are much more involved in the average person’s daily life, these organizations have also developed with negative impacts for individual members. The evolution of bureaucracy has created what is known as bureaucratic alienation. The problem of bureaucratic alienation is that people and their needs are considered secondary in respect with respect to efficiency. As a result of this problem, people are alienated and often treated poorly because of the lack of concern placed on the individual (Macionis, 2011).

A second problem in the rational organizations of today is the development of inefficiency due to bureaucracy. The problem is known as bureaucratic ritualism and it is defined as the “focusing on rules and regulations to the point of undermining an organization’s goals (Macionis, 2011).” This problem is a result of the stringent policies and rules that are intended to create a fair and efficient environment. This problem can be seen in many government services which in certain instances make services nearly impossible to obtain. For instance, unemployment benefits often exclude many people based on the fact that they have not worked in the last 90 days. Within this guideline, a person could have worked for ten years and then been fired but if they did not work for 90 days they would be ineligible for unemployment in most states (PrimePay, 2013).

Another major problem with bureaucracies in that they continue to operate survive even when they have outlived their usefulness and are no longer beneficial. This is problem known as bureaucratic inertia (Macionis, 2011). An example of this problem can be seen in the continued funding of the United States Post Office despite the fact that more efficient mail services exist. The post office has continued to be funded despite the fact that due to technology and better competition, the postal service has been all but replaced.

Today, the structures of organizations need to change in order to overcome the problems of bureaucratic alienation and bureaucratic ritualism. Conventional bureaucratic organizational structures have begun to be rethought and reinvented in order to make them more efficient and sustainable. In order for the conventional bureaucratic organizations to change this means that new aspects of work and individual workers must be considered. Some of these new aspects of thought include creative freedom, competitive work teams, a flatter organization, and greater flexibility (Macionis, 2011). These attributes take the form of an organization which shares responsibilities and problems across the entire membership rather than relying of specific groups or departments for the solution. This type of organization would also try to align the needs of workers with the needs of the organization in order to build value. The individual employee and his or her goals and values must be aligned with the organization for flexibility in the organization to be achieved. By aligning goals and objectives in this manner the culture of the organization is transformed and focused in a manner seeks to improve itself. According to Noe, R. A., Hollenbeck, Gerhart, & Wright, (2007),

It focuses decision-making and behavior on goals — including goals relating to environmental, safety, diversity, and other social performance measures — consistent with overall business strategy…allows the company to attract and retain employees with the skills critical to its long-term success.

While formal organizations have evolved and continue to evolve it should be noted that the types of jobs are also indicative of the organizations structure. Some jobs such as fast food or manufacturing rely heavily on consistency and structure to make them successful (Macionis, 2011). These types of jobs cannot offer the benefit of flexible organizations because of the need for consistency. As a result of this problem, some organizations must continue to operate as conventional bureaucracies. This ultimately means that some organizations are incapable of becoming flexible organizations and will need to find other means for satisfying human needs of members.

References

Macionis, J. J. (2011). Society: The basics (11th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2007). Fundamentals of human resource management (2nd ed.). New York: McGraw-Hill Companies.

PrimePay. (2013). Mandated employee benefits businesses are required to provide. Retrieved from http://www.primepay.com/insurance-benefits/mandated-employee-benefits.aspx