The Formal Organization

The formal organization includes the “organizational architecture, a term that describes the variety of ways in which the enterprise formally structures, coordinates, and manages the work of its people in pursuit of strategic objectives.”10 Once tasks are identified and defined, they are grouped to form reporting relationships, the formal organizational chart of roles, responsibilities, departments, divisions, and so on. The purpose of a structure is to enable efficient and effective task performance. The formal systems of an organization are the mechanisms that help the organization accomplish its work and direct the efforts of its employees. These include an organization’s human resource management systems (recruitment and selection, reward and compensation, performance management, training and development); information systems; measurement and control systems (e.g., budget, balanced scorecard); production systems; and so forth. Chapter 5 deals with designed systems and structures.

Change leaders need to understand how the formal systems and structures influence people’s behaviors and how structures can be used to facilitate change. Often formal systems, such as budgeting systems, need to be used to gather data for change.

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