Advantages and Disadvantages of Formal Organization

A formal organization many advantages in the way it runs and its relationship with its employees. Mainly the employees are the main beneficiary of a formal organization along with the environment in which they are operating.
In this topic, we will discuss the advantages of the employees working in a formal organization. The point’s advantages and disadvantages of the formal organization are many. These are discussed in the following paragraph:

Advantages of Formal Organization

  1. Security: A formal organization is more established and the entity of the company is not dependent on individual losses. So working in such an organization provides secured financial support to the employees and the employees working here is more devoted to work.
  2. Promotion is slow but steady: In a formal organization the promotion may not be rapid due to a chain of command but with certain seniority, in the organization with sufficient performance personnel is sure of promotion.
  3. Commissioned ranks open to men and women graduates: A formal organization will always put preference to recruit graduate or highly educated personnel I the company in a way creating job opportunities for this class of people.
  4. Can’t be fired: After recruiting a person a formal organization tries its best to develop the personnel. In many cases, the personnel is not generally fired depending on a few personal mistakes.
  5. Good retirement benefits: The organization of such value will arrange a plan for the employees so that they can retire with benefits.
  6. Many different branches appeal to different interests: A formal organization has many different departments to perform various activates. So a person has a wide range of options from which he/she can choose depending on individual interest and skill level. So as a person there is an option in this type of organization on the choice of profession.
  7. Social Status: A formal organization has specific position & position names that bear the status of the person in the organization. These posts are familiar with the environment the company is operating and often works as a social status symbol. By working is a formal organization the person has to way to achieve such a position and thus achieving a high social activity.
  8. See interesting places and people Anonymous: By working in a formal organization a person gets to meet many different people of different views and values. By interacting with these variations a person will learn more about working in such an environment.


    Advantages of Formal Organization

9. Outlining the Company Structure: Providing a basic structure of division of work and responsibilities. Without such a structure it will be very difficult for employees to agree among themselves on duties. A formal organization is helpful and strict in the ways a company will act upon.

10. Clarity in the chain of command: In a formal organization the chain of command is clearly drawn so that personnel in the organization can follow them as per and ordered to do so. In a formal organization, the chain of command is strictly followed to achieve the company goal.

11. Discipline in Organization: It promotes discipline in the organization. In a formal organization as the rules and regulations are in clear and organized so the presence of discipline is there. This discipline itself influences s the efficiency of the organization.

12. Organization Development: It makes it easier to review and revise organization with changing requi9rements. The worlds in changing every day and so the environment in which the organization is operating. To keep up with the ever-changing environment the organization needs to develop embracing changes. In a formal organization, the process of development becomes easier.

13. Decision-Making Process: It provides a structure for laying down pay scales and taking other decisions linked to organizational levels. A formal organization is the logical distribution of resources to achieve the company goal in a most efficient manner. Any decision making regarding the organization is easy and easy to implement.

14. Human Resource Development: The important part of an organization is its employees. A formal organization gives the opportunity to treat the human resources within the organization. The development and improvement of human resource are easy informal organization.

15. Co-ordination in different Departments: An organization consists of many different departments to carry out different activities to contribute to the ultimate function of the organization. Co-ordination between these departments is very important. In a formal organization, all the departments are well outlined along with their activates. So it is easy to relate and co-ordinate. Thus a formal organization is easier to manage & achieving the target.

Disadvantages of Formal Organization

A formal organization has many advantages both for its internal and external environment but it has some disadvantages too. The common disadvantages can be listed as follows:

  1. Limited Flexibility: As this type of organization is very specific in every activates there is the very little margin of flexibility and spontaneous decision making in the company. Such practice in the company can be demotivating to the employees.
  2. The slowness of processing: In a formal organization for performing a task needs many formal procedures to accompany. Such formalities often slow down the implementations of decision making.


    Disadvantages of Formal Organization

3. Communication Barrier: As in a formal organization a task needs the coordination of different departments so communication needs to clear in this process. Any kind of miscommunication may lead to ultimate inefficiency.

4. Quality of decision: Sometimes the quality of the decision made in the top management may not be most compatible with the company but the chance of correction is very scarce.

5. Slowness in Problem detection and processing: As every procedure goes through a lot of formalities any problem detected in the operation level can’t be instantly corrected. The right process will take some time to detect the problem and correction and its implementation. In such a process the organization may suffer financial loss.

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18 comments for “Advantages and Disadvantages of Formal Organization

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