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A formal organisation is a type of organization in which the job of each member is clearly defined and whose authority, responsibility and accountability are fixed.

It is an organization that has established rules, roles, and procedures that are formally sanctioned, as well as clearly defined authority and responsibility relationships among its members.

A formal organization can also be defined as a goal-oriented entity designed to accurately direct the efforts of individuals, groups towards the achievement of specific objectives.

A formal organization, according to Louis Allen is "a system of well-defined jobs, each bearing a definite measure of authority, responsibility and accountability, the whole consciously designed to enable the people of the enterprise to work most effectively together in accompanying their objectives".

In Chester I. Barnard view, formal organization is ''a system of consciously coordinated activities or forces of two or more persons''.

Formal organizations are usually created to serve as means of achieving organizational objectives. 

Formal organization usually describes the jobs to be performed by each individual, the authority and responsibility assigned to each members of the organization, as well as the superior-subordinate arrangement of the organization.

Formal organization is built on four pillars: 

1. Division of labor: This means the whole workers should be divided into small operations so that it can be carried out by each departments and employees according to their area of expertise

2. Scalar and functional processes: This means that the organization grows vertically and horizontally

3. Structure: This refers to the authority-responsibility relationship in the organization, superior-subordinate relationship in the organization and the overall arrangement that ensures the execution of operation and achievement of organizational objectives

4. Span of control: This refers to the number of subordinates reporting to a superior. It is sometimes called span of management


1. Deliberately created: Formal organizations are structures that are deliberately created to define the authority-responsibility relationship required to achieve specific objectives.

Formal organization are usually created through the process of organizing

2. Division of work: Formal organization stands on the principle of division of work, which is the dividing of work into units based on their skills and abilities.

3. Formal authority: in a formal organisation, people exercise authority based on their position in the organisational structure.

Authority is the right to give orders and extract obedience —Henry Fayol

4. Based on rules: in a formal organisation, there are laid down rules and regulations, which are expected to be followed and observed by all members of the organisation.

5. Deliberately impersonal: Formal organization is more focused on achieving organisational goals than on developing interpersonal relationship 

Hence, it is impersonal as it concentrates on the job to be performed, not the interpersonal relationship of organizational members.

6. Purpose: The main purpose of formal organization is to achieve organizational goal. 


1. Easy identification authority-responsibility relationship: Formal organization specify the objectives of the organization and the authority-relationship among individuals in the organization required to achieve these objectives.

It focuses on the job to be performed, thereby everybody is responsible for a given task.

2. Align individual objectives with organizational objectives: Formal organizations integrate the goals of the organization with that of individuals working in the organization.

 This ensures that there is a synthesis of individual, group and organizational goals

3. Create effective communication: Formal organization divide work among the various units of the organization and established the mode of communication in the organization

Hence, it creates an effective communication system in the organization.

4. Avoids duplication of functions: In formal organization, work is systematically divided into sub-units and employees. 

This ensures that no functions are duplicated or overlapped within the organization

This ensures that no two people are given the same task and that no functions are duplicated.

5. Promote efficiency: Formal organization ensures that there is no duplication of functions, which ensures that the organization resources is not wasted on financing duplicated functions

6. Achievement of organisational objective: Formal organization create well-thought and well-planned relationship within the organization.

This leads to the easy achievement of organisational objectives.

7. Ensures law and order: Formal organisations are based on rules and regulations. 

It, therefore, ensures law and order in the organization.


1. Rigidity: Formal organization create a very rigid organization where rules and regulation must be followed.

As a result, formal organizations are insensitive to changing time and circumstances, making attainment of organizational objectives difficult in the long-run

Moreover, rigidity can contribute to a lack of initiative, as Henry Fayol called it

2. Slow decision-making: Formal organization places a lot of formalities in the scope of operation of the business.

This formality is also reflected in the decision-making of the organization.

For example, if a problem arises at a low level, it can not be instantly corrected as it would go through a different chain of commands before it can be corrected.

Therefore, formal organization result result in delay because decision-making must go through various scalar chain and chain of command.

3. Emphasis on works: Formal organizations place a strong emphasis on work and achieving organizational goals while ignoring the social and psychological needs of employees.

4. Wrong assumptions: Formal organization assumes two things.

First, it assumes human beings will always stick to laid-down rules and regulation. 

However, this assumption is rarely practicable as human beings do not always obey rules and regulation

It assumes that human beings are always motivated by punishment and reward. This is, however, not true as human are not always motivated by rewards and punishment.

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