Order versus Flexibility

We saw in the last chapter that the problem is to strike the right balance between centralization and decentralization, rather than to regard these as alternatives. The same is true for another important aspect of organizations, the degree of formalization. This means the establishment, usually in writing, of definite policies and procedures. Formalization is also characterized by a reliance on written rather than oral means of communication. As the title of this chapter suggests, the choice that has to be made is between the relative advantages of order and flexibility. These two can be seen as the opposite ends of the scale of formalization — the more formalization, the more order and the less flexibility. No organization can successfully set order as its overriding aim, nor can any put flexibility as its prime concern. All organizations need elements of both, and the problem is to decide what is the appropriate balance between them. The aim of this chapter is to help managers to make this decision so that they can tell when it is desirable to formalize and when formalization may have gone too far. Another way of putting this is the distinction between loose and tight. Some activities in an organization should be loose, that is they should be left up to the individuals and groups to decide what they should be doing to meet the current conditions; others should be tight, that is they need rules and procedures which should be carefully monitored.