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Formal arrangements in an organization can be defined as all formal systems that have been explicitly established to regulate the actions and functions of employees and machines.
These formal arrangements would include:
• structure:
- job design and descriptions;
- departmentalization;
- reporting hierarchy;
- rules and plans;
- teams and task forces;
• operating systems:
- resource allocation systems;
- planning systems;
- measurement and reward systems;
- hiring and development systems.
Formal arrangements can have an important impact on organizational dynamics and key processes.
Formal organizational structure typically influences employee behavior and organizational processes by specifying:
• what individuals are responsible for,
• where in the organization they should work and with whom,
• what authority they have and to whom they are responsible, and
• how they should go about performing their tasks.
Measurement systems influence behavior by gathering, aggregating, disseminating, and evaluating information on activities of individuals or groups within organizations.
Reward systems are usually designed to induce people to work toward certain measured objectives.
Selection and development systems have an impact on behavior by directly influencing the knowledge, skills, values, and personalities of employees
Questions to Determine the Present State of Formal Organizational Arrangements
1. What is the organization’s formal structure? Draw a chart showing jobs, departmental groupings, a reporting hierarchy, responsibilities, and authorities. Also list any committees, teams, task forces, regular meetings, and so forth.
2. What types of formal procedures exist for the following:
a. Allocating resources
b. Controlling financial resources
c. Measuring individual or unit performance
d. Selecting people
e. Training people
f. Rewarding people.
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