More Benefits of a Formal Organization

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More Benefits of a Formal Organization

🔥 Here are some further advantages of a Formal Organization (FORG), beyond the 6 already mentioned in the summary of a formal organization:

7. Accountability and Productivity: It establishes accountability mechanisms, enhancing employee commitment and productivity through clear expectations and consequences.
8. Scalability and Growth: As a business grows, the FORG accommodates increased complexity, making it easier to integrate new employees and processes.
9. Risk Management and Compliance: It facilitates risk management by identifying and mitigating potential risks, and helps to ensure compliance with legal and regulatory requirements, safeguarding the business's reputation and operations.
10. Effective Delegation: It enables business owners to delegate responsibilities with confidence, freeing up time to focus on other things.
11. Attracts Investors and Partners: Investors and potential partners often prefer businesses with a formal organisational structure as it indicates professionalism and indicates a clear road map for growth and profitability (scalability).
12. Adaptability to Change: A FORG, when designed well, can incorporate certain flexibility and adaptability, allowing the business to pivot and innovate in response to market shifts and opportunities. Of course, too much emphasis on the FORG can have an opposite effect, making change more difficult.
13. Conflict Resolution: A formal organisational structure provides a framework for resolving conflicts and disputes through established channels, reducing the likelihood of disruptive internal conflicts negatively affecting the business.

Sources:
Maitha Olive, (2013) "The Effect of Formal Organizational Structures on Inter-organizational Network" 2013, April, vol, pp. 70-136
Sergey Osadchiy, (2011) "The Dynamics of Formal Organization: Subtitle of Book", edition/print, 2011, pp. 23-48