Benefits of Formal Organization

Formal organization offers the following benefits:

1.    It clearly defines objectives of the organization and authority-responsibility relationships amongst people for attainment of those objectives.

2.    It results in optimum utilization of scare organizational resources.

3.    Clear division of work and relationships amongst people develops effective system of communication in the organization.

4.    The organizational hierarchy avoids overlapping of activities between two individuals or two departments. Two individuals are not assigned the same task.

5.    Career advancement and promotional avenues are clearly defined in a formal structure of organization.

6.    The rate at which people join and leave the organization is reduced (because of clear objectives, policies, strategies etc.) The rate of labor turnover and absenteeism. Thus, remains low.

7.    Formal organization attempts to integrate formal goals of the organization with goals of individuals working in the organization. There are, thus, syntheses of individual group and organizational goals.

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