Formal Organizations

Formal organizations differ from generic forms of social organizations—e.g., groups, communities, societies—in that they are consciously designed social systems. Formal organizations are collectivities with highly formalized social structures. Formalization refers to the extent to which roles and relations are prescribed independently of the personal attributes and relations of specific participants. Formalization renders behavior more predictable by standardizing and regulating it. It allows for the design of social structure, treating it as an object to be manipulated—designed and redesigned. In contrast to informal organizations, such as neighborhood or friendship groups, formal organizations stress positions over persons and roles over personalities. Formal organizations also exhibit relatively high goal specificity. More so than most collectivities, they attempt to orient the design of their structures and the activities of their participants around a set of explicit, specialized objectives.

To focus on formal organizations is to emphasize the emergence, during the Enlightenment period, of social forms designed to achieve limited goals. Unlike kinship or diffuse patrimonial systems, these organizations were consciously established to achieve specified objectives. Gradually, over long periods of time, collective actors (organizations) were differentiated from individual actors (persons). Whereas earlier social forms, such as manors and guilds, wholly contained their members and possessed full authority over them, the new forms, such as city-states (and, subsequently, nation-states) and private companies distinguished between the rights of individuals and those of collective actors. The processes involved in bringing about these distinctive forms were not only technological progress and increasing economic interdependence, but also institutional work, including the construction of new categories of actors, rules, and social relationships. These developments were codified into political constitutions and legal statues: recognition during the late 17th and early 18th century of the rights of citizens separate from those of nation-states and, during the mid-1900s, creation of the limited liability corporation, in which the corporation was treated as a legal person and the liabilities of individual members were limited to their individual investments.

For many centuries, organizations were scarce, reserved primarily for military operations and major construction projects. Today, organizations are ubiquitous, employed in multiple private and public sectors, coordinating the production and supply of an astonishing array of specialized goods and services. One of the primary hallmarks of a “developed” or “modern” society is the size and variety of its organizational infrastructure.