Evolution of Formal OrganizationsThis paper is based on the simple idea that formal organizations with conventional, bureaucratic organizational

structure may benefit by adopting a more flexible organizational structure. Areas to be explored are the evolution of formal organizations over the past century, differences between formal and informal organizations, trends in formal organizations; characteristics needed for formal organizations to evolve and researched material on the trends in formal organizations. Formal organizations have been steadily evolving over the past century. A significant change in the structure of formal organizations has transformed the traditional value system of organizations into a more modern organizational system. With the integration of modern flexible organizational structure formal organizations have become more profitable, employees earn higher wages and consumers reap the rewards of lower priced products. Examining the differences in organizations a century ago, compared to todays organizations will show the significance of these changes. Formal organizations were set up centurys ago. Early empires were governed by the privileged who implemented chain of command procedures and inflexible policies. Organizations were traditional and conservative with values and beliefs that were carried down from generation to generation. Chain of command consisted of the CEO, top executives, division leaders, middle managers, and rank-and-file workers. Each position within the rank structure was distinct and specialized with clearly defined rules and regulations governing all personnel within the organization. Groups were organized to achieve specific goals with the highest efficiency. Efficiency was believed to be achieved through careful selection during the hiring process. Each group had specialized professions from supervisors to file workers and all positions were based on technical competence. Positions were also based on patterns of privilege and exclusion i.e. women and minorities were excluded from higher ranking positions. Communications were typically formal and in writing rather than face to-face. This kept personal relations to a minimum, helped preserve the rank structure, and sustain task-orientation among employees. Modern organizations of the 21st century have evolved into a more open and flexible organizational structure. Organizations are shaped more by teamwork than traditional leadership standards. Chain of command consist of the CEO, senior managers and numerous, competing work teams. This open organization allows for flexibility in leadership and cooperation between personnel within the organization. Groups are organized with the intent to share ideas and find solutions that will benefit the organization as a whole. The organizations main goals are flexible leadership, group cooperation, and effective communication with a greater emphasis on collaborative teamwork in all organizational operations. Consequently, managers provide guidance and incentives for employees to work more efficiently. This allows for creative freedom through imagination and discovery rather than managerial dictatorship over project goals. The result is competitive teamwork which allows an organization to draw on the creative contributions of every member of the team. In turn, team members with a higher level of contribution to project goals may advance more rapidly than members with a lower-level of contribution. The incorporation of a more modern flexible organizational structure has laid the foundation for new trends in formal organizations. Emphasis on leadership has shifted from domination to cooperation. The traditional masculine leadership style of a rigid chain of command and inflexible policies is giving way to a more modern and somewhat feminine style of flexible leadership, effective communication and collaborative teamwork. Todays organizations are shifting toward creating a work environment that will take the brunt of the liability of a project off the shoulders of one person and spread it across several competing work teams. Grant, R. (2007) describes six specific management practices that have been influential in the current trend shifts of formal organizationsGiving priority to building the right team over creating the right strategy. Willingness to confront reality while maintaining faith in the future [sic]. Building organizational momentum. Possessing depth of knowledge concerning the fundamental economics of the business, what the company is best at, and how to ignite the passions of its people. Pioneering a few carefully selected technologies while maintaining skepticism over technology bandwagons. Maintaining discipline of thought, action, and people. Though numerous formal organizations of the 21st century have made a successful transition from the conventional bureaucratic philosophy of yesteryear to a more modern and flexible organizational philosophy, there are still countless formal organizations whose characteristics still represent the values and beliefs of generations past. Characteristics for formal organizations will need to evolve for an organization to become more open and flexible in the 21st century. The evolution of hierarchical formal organizations hinges on strategic alterations in the structure of the organization. Some fluent modification may include but are not limited toRethinking organizational structure by balancing ideas of the organization to embrace the basic reality of business. Centering on effective communication skills. Becoming a learning organization centered on a collective knowledge system. Focusing on tolerance for individuality while maintaining corporate culture and integrity. Adapting and upgrading existing economic and technological capabilities. Establishing simple boundary rules to form as a guideline for flexibility. Implementing flexible informal information transfer policies to stimulate the imagination and discovery capabilities of

collaborative teams through creative freedom. Curtailing formal authority and promote self-organization, adapt to change and create new structures and systems within an organization. According to research writers seem to have varying opinions on future trends in formal organizations. For instance, the research of Brady, T. (2007) revealed that future HR Managers will face specific circumstantial trends such asFormal management structure will be comprised of small groups of intelligent visionaries who will establish the strategic direction of the firm. Emphasis will be placed on strategic planning, recruiting temporary employees, and variable pay scales. Negotiated pay by the project method rather than hourly wages. Managers will work more closely with upper management while temporary workers move in and out of team slots. Employment and employability will not be stable. Managers will move from authority positions to the position of facilitators. Knowledge, creativity, self-sufficiency, versatility and productivity will come before formal education. The research of Morris, Allen, Schindehutte and Avila (2006) revealed that future trends in formal organization in Corporate Entrepreneurship will require the integration of more informal organization in areas such asActivities that establish new business through product and process innovations and market developments. Managerial systems that help assure effectively in accomplishing organizational objectives. Social standards and group interactions. Standardized rules are implemented when a novel entrepreneur joins the ranks. Supervisors need to maintain flexibility with new recruits until they are ready to take full responsibility for their own organization. Though open and flexible organization would appear to be the best approach with middle level managers and at beginner levels of entrepreneurship, CEOs, top executives and division leaders appear to follow more strict guidelines of formal organizational structure. The research of Schein, E. (1996) revealed that the shift from formal to informal organizational structure will be both positive and negative in the areas ofPositive:Opportunities to learn and gain experience. Self-reliance and self-management. Role models for future career incumbents le models for future career incumbents. Career advancement is increasingly defined in terms of what knowledge and skills a person possesses. Negative:Employment and employability security. Economic security and geographic stability. Seniority or loyalty no longer ensures job security. Continued education and retraining are required to maintain competitiveness in the work place. Research suggests that formal organizations focus more on formal training when hiring for managerial positions. In contrast, informal organizations suggest that informal learning through hands-on training and self learning through trial and error can assist employees in mastering the skills needed for holding a managerial position. Each of the three research analysis and predictions appear to be accurate for the specified fields of research. With the assimilation of flexible organization and informal organization, it is more than likely that a knowledgeable, creative, self-sufficient, productive person will be able to advance regardless of the lack of formal education. Adversely, a person with a formal education that lacks productivity could easily be outsourced. Corporate Entrepreneurship is a horse of a different color so to speak. Though the lower-levels of this enterprise have incorporated some aspects of informal organization the chances for total integration are slim to none because entrepreneurship is considered to be a free or private enterprise based on values and beliefs that have been handed down from generation to generation. In truth, with all the research and hypotheses about the evolution and trends of formal organizations no prediction can be precise. The best educated guess that one could make is that formal organizations will go through this metamorphosis of integration on some levels while holding on to traditional standards on other levels. While most formal organizations can obviously benefit from adapting more open, flexible organization there are some organizations i.e. military, IRS etc. that would probably fall apart with too much flexibility. Therefore, formal organizations that can undergo the transformation and come out on top will probably assimilate with informal organizational structure within the next century. In conclusion: The idea that formal organizations may benefit by adopting a more flexible organizational structure has proven to be a realistic possibility. The evolution of formal organizations over the past century proves that the integration of informal organizational structure has been beneficial for many formal organizations already. Research on the trends in formal organizations over the past century suggests that formal organizations are still evolving so the future possibilities may be limitless. ReferencesBrady, T. (2007). The future workplace and the impact on HR managers. Employment Relations Today; 22.n4 (Winter 1995): p.p1 (9). Retrieved September 11, 2007, from General OnFile. Grant, R. (2007). Current Trends in Strategic Management. Contemporary Strategy Analysis (6th Ed.); Chapter 17. Blackwell Publishing Limited.

Morris, M., Allen, J., Schindehutte M. and Avila, R. (2006). Balanced Management Control Systems as a Mechanism for Achieving Corporate Entrepreneurship. Journal of Managerial Issues; Vol. 18 Issue 4, p468-493, 26p. Retrieved September 14, 2007, from Business Source Complete. Schein, E. (1996). Career anchors revisited: Implications for career development in the 21st century. Academy of Management Executive; Vol. 10 Issue 4, p80-88, 9p. Retrieved September 15, 2007, from Business Source Complete.