EVOLUTION OF FORMAL ORGANIZATION 1

Evolution of Formal Organization

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Evolution of Formal Organization

About a century ago, organizations engaged in a pyramid shaped ranking where only a

few people were in charge of the others. This type of system separated those higher in rank with

the others that were at the bottom of the chain. There was no equality within the company and

those who were considered below or at the bottom of the chain had to do anything and

everything that those in higher power asked them to do.

In the early 1900s, organizations were not efficient in the quality or quantity of work and

their job performances; in this type of format, managers only did a few things. Managers would

take a close look at each worker and the job they performed, they would designate a certain

amount of time that would take to get the job done. Afterwards, they would try to find better

ways to get the most of their workers time and still get the job done. At the end, incentives were

given to those workers who did their job well; this was known as Scientific Management.

During the mid-century, companies were still not making the best out of their workers,

especially when hiring people. Most of the managers in high positions were white men, women

and minorities were never allowed to move up the latter. These organizations were known as

“closed organizations” and they formed unproductive workers because they would not allow for

them to advance within the company. Back in the days, man used to be too busy making sure

their reputation was intact while women took care of the creative part of a business. After

companies realized that they needed to be more open and let room for advancement they became

more profitable.

Nowadays, organizations are more flexible with their workers and most of them are open

to leave room for advancement within a company for their workers. Instead of using the old

model of top-down pyramid, now they work together as a team with a senior manager looking

over their project. Senior managers ask for creativity and ideas from the team members and
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implement them if they appropriate, instead of barking orders and expecting the same end result.

Organizations today supports its employees in being more creative and therefore gives more

responsibilities to each employee, they supervise less and expect the same goals but it let’s their

employees achieve them by using their own talents. Employees are encourage to work in teams,

this is very different for that of centuries ago; we live in a world that is always changing and

adaptation and creativity are vital for business organizations today.

After analyzing the changes that have taken place over centuries for organizations to be

more profitable, Micah’s company needs to change and be more flexible with its employees.

One of the most important things that need to change within the company is the top-down model

of hierarchy. If they were to make small groups, and geared towards the same goal this would

make production and efficiency a lot better within the company. The next change would be

hierarchy; creating a smaller level of chain in command would probably make staff less resentful

and open opportunities to grow within the company. Then it would be rules; a company needs

to have policies and regulations, it is up to each employee to be responsible to follow this norms.

The next step will be to have membership criteria; this means that manager or head of

departments need to encourage employees and not just order them to get the job done.

It is important to get employees involved, it makes for a better workplace and employees

tend to be more profitable. Company BBQ, annual parties and recognition encourages

employees to give it’s best to the company. These gatherings give employees a chance to be

together outside of the work environment, mingle and meet each other so that they all know who

makes the company work. This leads to the fifth character which is relationship; this is

important for any company. Micah’s company needs to get to know one another; this includes

all managers to know their employees. The sixth characteristic is communication; usually in a

formal bureaucratic organization, memos and letters that are un-thoughtful are sent from the top
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to the employees. It is best to have more face to face meetings with employees and get their

feedback regarding an issue so that they learn to communicate and employees feel that they can

have an open relationship with their managers in case an issue ever comes up during work. The

last characteristic is focus; a company is usually task oriented but if they were to become more

people oriented and show more care for their employees, than Micah’s organization will have an

end result of better efficiency between workers, which at the end will increase its productivity

and profitability.

A good example of how a formal organization tried to change is Delphi, America’s

largest automotive parts maker. As weird as it sounds, they took a step backwards instead of a

step forward. They tried to cut corners and cut employees wages in order to get out from under

its labor contract which led them nowhere. An average employee at Delphi’s was making $27.00

per hour and was cut down to $10.00 per hour. They thought they were being too good to its

employees and decided to cut their wages, this created a negative effect within the employees.

This is not likely to happen in the future; Bankruptcy courts have been trying to retrieve the

employee’s hard worked salaries. America’s future cannot be a bright one if the best ideas our

industries have for bringing us into global competitiveness is to drive their middle-class

workforce into penury (Blummer, 2005).

A good way to provide an incentive to work harder and give better results within the

organization is to match CEO’s pay to his or her performance in the company. Performance pay

has its good parts. It can motivate, retain and better align the CEO with various constituencies

(Martin, 2004). This is something that should be taking place between companies and

organizations. Businesses are trying to extend pay beyond CEO’s suite to all employees; this is

part of a plan to make sure accountability takes place within everyone in the organizations,

meaning everyone shares success or failure.

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The last trend that will be taking place in future organizations will be including those in

upper management be creative not just employees. It has been known for a fact that being an

open and flexible organization works better when they split employees into smaller and

competitive groups, allowing them to be creative and reaching the same goal. Great supervisors

come up with creative visions, analyze whether their ideas are good, execute their ideas well,

convince other of their value, and ensure that their ideas are for the common good of the

company (Sternberg, 2006). A good supervisor is the one that does the job they set out to do

without letting others do it for him in their own way.

Micah’s organization is more than likely to become a better one, once the company

figures this out that it will develop into a more productive and profitable company if it applies

the changes mentioned above, once they implement these changes only positive results will

occur. What needs to happen is the reduction in chain of command, creating small group of

employees will enhance and support creativity and inside competition. This will in turn make

employees feel needed and appreciated and therefore work harder. Communication is a key to

success too. If an employee is spoken to as an equal partner and not as an underneath and

underappreciated bottom of the pyramid worker, they will have a better sense of self worth; this

can only lead to get better from then on.

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References

Blumner, R.,( Nov 7, 2005). Have corporations been too generous to labor? No, not by a long

shot? Los Angeles Business Journal 27.45.: 55(1). General OneFile. Gale. University of

Phoenix. August 19, 2010

Martin, J., (June 2004). Raising the pay bar: under intense pressure, boards are adopting creative

measures to tie CEO pay to performance. Chief Executive (U.S.) 199 (June 2004): 44(4).

General OneFile. Gale. University of Phoenix. August 18, 2010

Sternberg, R.J., (Nov-Dec 2006). Creative leadership: it's a decision: most administration is

analytical and practical. Administrators who are great leaders are also creative and wise,

and develop those skills by using them. Leadership 36.2: 22(3). General OneFile. Gale.

University of Phoenix. August 18, 2010