Exam 15: Foundations of Organizational Structure

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Formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, the incumbent has a minimum amount of discretion over what, when, and how to do it. In a highly formalized organization, employees are always expected to handle the same input in exactly the same way, resulting in a consistent and uniform output. There are explicit job descriptions, lots of organizational rules, and clearly defined procedures covering work processes in organizations in which there is high formalization.
The strength of the simple structure lies in its simplicity. It's fast, flexible, and inexpensive to operate, and accountability is clear. One major weakness is that it's difficult to maintain in anything other than small organizations. It becomes increasingly inadequate as an organization grows because its low formalization and high centralization tend to create information overload at the top. As size increases, decision making typically becomes slower and can eventually come to a standstill as the single executive tries to continue making all the decisions. The simple structure's other weakness is that it's risky-everything depends on one person. One illness can literally destroy the organization's information and decision-making center.