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Relationship Between Formal and
Informal Structures
Nadeem
Yousaf The
organizations’ decline and development depends upon the function of internal
environment of organizations. The internal environment of organizations
consists of two elements: Formal and Informal structures. The design of a
formal structure is a conscious effort of human beings, whereas informal
structures in organizations develop beyond the conscious efforts. The
informal structure is an aftermath of formal structure and participants’
interaction in organizations.
Formal
structures consist of various elements such as power structure, corporate
policy, standard operating procedures and so on. Components of informal
structure are informal grouping, organizational conventions and
organizational culture.
There is almost a consensus among researchers that individuals join
organizations with different ambitions, motives and personalities; hence it
is not possible for organizational formalization to satisfy everyone.
Meeting in the formal set-up provides with the opportunity individuals to
share ideas and interact with each other. Those who have similarities in
views or share common interests develop social understanding with each
other, which leads to develop various groups in an organization. Freud
argues that the binding force of a group is derived from the emotional ties
of the members. This social understanding further leads to develop
conventions in organizations (Roethlisbergaer & Dickson 1939; Selznick
1984). These common social understanding and conventions, at the later
stage, turns into deep rooted taken-for-granted assumptions of the system,
which is popularly known as organizational culture. In this article, three
types of formal structures are presented and a theoretical
relationship of these structures is seen to the types of informal
structures, conventions and cultures. It should be noted that all these four
elements has hierarchal link with each other.
Rational Structure
The rational structure
refers to the type that follows rule orientation and neglects human beings
Weber (1978) and Taylor (1972) reflect on the concept of rational structure
in their paradigm work on organizational structures. The crux of their
thoughts is that organizations must strictly follow principles of planning,
decision making process, division of work, written communication, official
jurisdictional, and hierarchy of offices in order to grow. The classical
thought believes that the best comprehensive planning is possible in all
organizations. The rational theorists consider planning as a soul for the
organization development, which is primarily responsibility of the top
management. The rational school of thought suggests more or less
algorithmic way of planning where exact goal should be set after considering
consequences of all alternatives (Weber 1978 ).
In rational structure, the
power is vertical and authority is top-down (Greiner & Schein 1988), which
is close to autocratic structure as it overemphasizes on hierarchal power
and suppresses `voice' strategy of subordinates. Formalization is
overemphasized and seen a sole way to control member of organizations.
Rationalists believe that only
those individuals should
work in the organization who accepts instructions of the top management
without questioning. Consequently, it can be drawn from their work that the
classical rational structure allows participants to choose one of the
Hirschman’s strategies of actions: Exit or Loyalty. This high demand
for rule orientation and limited choice of action impinge on participants to
have a calculative involvement.
The
rational structure encourages rational type of informal grouping, which
means those groups that disagree only accept existence of each other until
there is no way out to completely eliminate the other. They will play on
each others’ interests whenever they find the opportunity and manipulate
each other in the name of formalization; hence rule of the game is
zero-sum. Groups present their hidden agenda and differences in a rational
way so they should not be blamed for violations of the rules of the game.
Thus, we can argue that administrative and managerial problems are
simultaneously personal & interpersonal problems expressed in
organizational language.
In Rational structure,
groups hardly internalized formalization of the organization therefore feel
alienated and develop conventions which are apparently not be entirely seen
conflicting with the formalization or accused of breaking the law.
Interestingly, if someone by pass the formalization it will not be bothered
until it affects negatively to the personal interests. Rational systems
tend to be rigid and rigidity blocks the road of developing friendship
between different groups, whose interests differ from each other. In such
an atmosphere, groups retaliate against each other by interpreting laws in
their own favour. When one group wins, the other group feel disappointed and
does not accept the change. Using Etzioni (1961) typology of involvement,
groups prefer to have a calculative involvement and remain member of the
organization until they do not find better opportunity.
The above discussion
indicates that conflicts are present and though discuss but do not resolve
underlying reasons of conflicts. Organizational culture in rational
structure develops on the assumption that formalization is more important
and members of the organization must fulfil their duties at least at a
minimum level without paying much attention on resolving underlying
conflicts. Due to conflicts and promotion of self-interests raise to tense
climate and prolonged tense climate leads to alienated culture. Cognitive
dissonance is a prime reason for developing alienation in the organization.
Cognitive dissonance spreads in the organization because single-loop
learning becomes organizational norm and all efforts are made to restrict
voice of individuals and groups, fosters non-accommodative behaviour among
the individuals and groups. The basic assumption of the culture is, “don’t
scratch back of the powerful and wait for the time to hit back.”
Democratic Structure
Since
investigations of the Human Relations School, literature on organizational
development has been changing. It is more stress on the process than simply
concentrating on the end-result to change the style of management and to
improve level of productivity.
The concept of algorithmic planning does not prevail in
democratic structure due to cognitive limitations of human beings (March &
Simon 1958). They do not believe on one best decision or planning as
previously asserted by the rationalists. Views opposite to the rationalists
accept that attentions and preferences shift from one value to another as
the time passes (Simon 1965). In democratic structure, it is accepted it is
almost impossible to take into account all the relevant factors and their
consequences due to cognitive limitations and external constraints,
therefore, organizations accept reasonable solution than the optimum (Simon
1965; March & Simon (1958); Offerdal (1989). The essence of the democratic
structure is that it is system and human oriented, simultaneously.
In democratic structure, power structure is more horizontally
designed.
Upward
power is seen legitimate and downward power is barely tolerated (Greiner &
Schein 1988). It allows person in offices whose spheres of authority are
directly competing with each other. The administrative acts are only
legitimate when they have been taken according to the principle of unanimity
or majority (Weber; Greiner & Schein 1988). It encourages interaction and
participation in decision-making process whose interests are at stake. The
need for direction & control is replaced by team work, collaboration and
integration (Greiner & Schein 1988).
Using Hirschman terminology, the democratic structure
provides room for "voice" & "loyalty" to the participants while working in
the organization. Voice strategy is seen as the way of understanding
problems of the organization and a legitimate right of the participants.
Participants have a provision of showing disagreements and expressing them
openly. Expression of disagreement is not seen as a disloyalty towards
organization. Loyalty based on consensus is encouraged than forced loyalty
through formalization.
Democratic structure relies more on moral involvement which
means internalization of norms and identification with authority (Etzioni
1961). Moral
involvement develops because opportunity of voice to the participants that
release tension, consequently, it strengthens the system. Participants are
group oriented and raise voice to serve interests of the group and
organization instead of self-interests. The democratic structure is a
workable idea at least for most of the people. The word "workable" is used
deliberately, because we cannot devise a system that is best and perfect and
acceptable to everyone.
It does not
mean that informal groups have no conflict or are carry the same view all
the time. The groups accept existence and differences of each others and
strive to find a middle point where compromise could be met. They avoid the
game of "who wins, who loses" and prefer to have non-zero-sum game. The
groups accept others’ voice action and expect loyalty to the organization
from each other. They can have differences but these differences are used
to learn from each other and to develop the organization instead of
securing personal interests. They are of the believer that personal
interests will be served automatically once collective interests are
secured.
In
democratic culture, the groups do have different understanding of laws but
have the ability to discuss and find the appropriate interpretation of the
law or policy which satisfies at least majority of the groups. The rigidity
is at the lowest possible level. This behaviour helps organizations to
internalize formalization among its participants. Over the time
conventions are developed, but these conventions do not steeply hurt
formalization of the organization. The paradigm of democratic structure is
moral involvement so the developed conventions are owned by the groups and
they will support each other if their conventions are criticized from the
outside.
The basic
assumption behind democratic culture is to live and let live; therefore,
conflicts are brought on the surface so that they can be analyzed and
resolved amicably. The democratic structure is based on the assumption
of reasonability and supports double-loop learning. It gives provision to
voice action which means that participants can be disagreed without
developing enmity for each other. It relies on accommodative behaviour and
encourages compromises among groups. It is the consequence of compromising
attitude that develops moral commitment among members of the organization.
Friendly interactions among informal groups and permission of raising voice
provide channel to release negative energies that helps to decrease
cognitive dissonance.
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Laissez-Faire Structure
Laissez-faire structure lacks planning and process markedly different form
the other two structures. Strategic planning and decisions are taken on
Ad-hoc basis. Formalization seems to be an alien word for such a structure
and lacks formal written communication. If there is any little formalization
exists, it is neither accepted nor internalised; therefore participants act
according to their own individual interpretation of formalization.
Laissez-faire structure is analogous to a child who has not developed enough
large chunks to see the reality. They fight
with each other on petty things and ignore real issues.
Long misguided meetings are held with negligible results.The decision
making process is similar to Garbage-Can in which participants take decision
making event as an opportunity to air their own personal agenda.
In this
structure, considerable ambiguity in the power structure exists. Therefore
power structure appears to be a vicious circle in which no one takes the
responsibility when things go wrong; however at the time of success
everybody tries to take the major credit. Each party pursues its own goal(s)
and personal agenda. Conflicts are though viewed as a normal part of the
game but the process of handling conflicts leads to antagonistic feeling for
each other. In this structure, power and political behaviour are dependent
on a wide range of people outside the formal authority chain to get
decisions made and work accomplished (Greiner and Schein 1988).
The available strategies of actions are "exit" and "voice".
The strategy of voice is not used in the same fashion as it is used in the
democratic structure; rather, it is used to attack each other because
participants are more self-interest oriented.
Participants’ involvement is alienative because they feel that they will not
get what they expect. The alienation takes place when participants have less
trust in each other and everyone is working for his/her own self interest.
The individualistic approach is adopted that creates problems for the
system to work properly.
Even within
informal groups membership is not permanent. The members of a group are not
united because they have a similarity in views or ideology but they join
together to gain temporary advantage; hence individuals shift groups
according to the time and personal interest. Groups have a tug of war where
both want to win. Any group can seek outside interventions if it servers its
interest. All groups expect submission from each other to their own ideology
and views.
Lack of
formalization and frequent shift form one informal group to another lead to
develop free type of conventions – any action that benefits the group or
individuals is a convention. If things go wrong, blame is transferred to the
other group. The members develop a distant relationship with the
organization. Conventions and formalization have little relationship
because both change quickly as per the desire of the participants.
Culture of the
laissez-faire structure is antagonistic, which is based on the assumption
‘you do what you think and I do what I deem correct.’ This culture provides
room for non-accommodative behaviour with the provision of voice action.
Both single-loop and double-loop learning tactics are employed. The
single-loop learning is usually employed at the organizational level that
leads participants to a conflicting level where they do not realize what
is good or profitable for the whole organization. They act in such a manner
because they are afraid of opponent manipulation or afraid that they will
lose power if they cooperate with each other. Double-loop learning is
employed for a personal interest; it is used to finding legitimacy and
defending personal actions and motives. In laissez-faire structure, each
group sees the other as an enemy; each group describes the other in terms of
negative stereotypes; interaction and communication between the groups
decrease, each group begins to prize itself and its products more positively
and to denigrate the other group and its products and, under certain
circumstances, the groups may commit acts of sabotage (of various kinds)
against the other group whenever there is tension, conflict, or competition
among groups (Schein 1979).
| Structure |
Action |
Power |
Involvement |
Informal Grouping |
Conventions |
Culture |
| Rational |
Exit or Loyalty |
Vertical |
Calculative |
Rational |
Rational |
Alienated |
| Democratic |
Voice Loyalty |
Horizontal |
Moral |
Affiliative |
Affiliative |
Democratic |
| Laissez-Allar |
Exit Voice |
Circular |
Alienative |
Free |
Free |
Antagonistic |
REFERENCES
Etzioni, A
(1961): A comparative analysis of complex organizations; on power,
involvement, and their correlates; the Free Press, New York.
March, J.G.
& H.A. Simon (1958): Organizations; J. Willey and Sons.
Offerdal, A
(1989): Politicl expertise or raitonality and reasonableness in political
descion making; workshop on the politics of modeling and forecasting of
social systems; Foundation nationale des science politiques, Paris 10th-15th
April.
Roethisberger, F.J., W.J. Dicson etl.al (1939): Management and the worker;
Harvard university press; Massachusets.
Schein, E.H
(1979): Organizaitonal culture and leadership; Joseey bass Publishers; San
Francisco.
Selznic, P
(1984): TVA and the grass roots; a study of politics and organiztion;
Univesity of California Press; London.
Simon, H.A.
(1965): Administrative behavior; a study of decision-making process in
administrative organization; The Free Press
Taylor, F.W
(1972): Scientific Management; comprising shop mangement, the principle of
scientific management; testimony before the special house committee;
Greenwood Press; West Port.
Weber M.
(1978) Economy and Society; An outline of interpretaive sociology;
University of California Press; London.
Griener,
H.F., V.E. Schein (1988): Power and Organization development; moblizing
power to implement change; Addison-Wesley publishing company, New York.
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