I. Formal Organizations
A. Core Concept 1: The formal organization is a coordinating mechanisthat
brings together people, resources, and technology, and then channels human
activity toward achieving a specific outcome or goal (Aldrich and Marsden
1. Formal organizations are classified as secondary groups,
distinguishing them from primary groups.
a. Primary groups - characterized by face-to-face contact and strong,
emotional ties among members;
b. Secondary groups - impersonal associations among people who
interact with a specific purpose
c. Secondary groups can range from small to extremely large.
Formal organizations, many of which are large, qualify as
d. Formal organizations can be voluntary, coercive, or utilitarian.
i. Voluntary organizations (or voluntary associations) - draw in
people who give time, talent, or treasure to support mutual
interests, meet important human needs, or achieve a not-for-
ii.Coercive organizations - draw in people who have no choice
but to participate
iiiUtilitarian organizations - draw people seeking material gain
in the form of pay, health benefits, or a new status
II. The Concept of Bureaucracy
A. Most formal organizations can be classified as bureaucracies—
organizational structures that strive to use the most efficient means to achieve
a valued goal.
1. Bureaucracy - a completely rational organization; one that uses the
most efficient means to achieve a valued goal that consists of seven
a. A clear-cut division of labor exists.
b. Authority is hierarchical.
c. Written rules specify the exact nature of relationships among
personnel and describe the way tasks should be carried out.
d. Positions are filled based on objective criteria and not based on
e. Administrative decisions, rules, procedures, and activities are
recorded in a standardized format and preserved in permanent
f. Authority belongs to the position, not to the particular person who
65 fills that position.
g. No one receives special treatment.
h. These seven characteristics describe a bureaucracy as an ideal
type – “ideal” not in the sense of being desirable but as a standard
against which real cases can be compared.
2. Formal and Informal Dimensions
a. Formal dimension - the official aspect of the organization; it
consists of job descriptions and written rules, guidelines, and
procedures established to achieve valued goals.
b. Informal dimension includes behaviors that depart from the
formal dimension, such as employee-generated norms that evade,
bypass, or ignore official policies and regulations.
1. Core Concept 2: The concept of rationalization—a process in which
thought and action rooted in custom, emotion, or respect for
mysterious forces is replaced by instrumental-rational thought and
action—helps us understand how striving to achieve valued goals can
have undesirable, even disastrous, consequences.
a. Rationalization refers to the way daily life is socially organized
to accommodate large numbers of people, but it does not
necessarily refer to the way individuals actually think.
b. Rationalization does not assume better understanding or greater
c. When people identify a valued goal and decide on the means
(actions) to achieve it, they seldom consider less profitable or
slower ways to achieve it.
C. The McDonaldization of Society
1. Core Concept 3: One organizational trend guided by instrumental-
rational action is the McDonaldization of society, a process in which the
principles governing fast-food restaurants come to dominate other
sectors of society.
2. Those principles are
a. efficiency - an organization’s claim to offer the “best” products
and services, which allow consumers to move quickly from one
state of being to another
b. quantification and calculation - numerical indicators that enable
customers to evaluate a product or service easily
c. predictability - the expectation that a service or product will be the
same no matter where or when it is purchased
d. control - is the guiding or regulating, by detailed planning, of the
production and delivery of a service or product
3. Iron cage of rationality - describes the set of irrationalities generated
by rational systems
D. Expanding Market Share
1. Organizations grow from local operations (McDonald’s began as one
restaurant in Illinois in 1955) to global giants by enacting measures to
2. Organizations employ five major strategies to reach the valued goal of
66 turning a profit:
a. Lower production costs.
b. Create new products.
c. Improve existing products to make previous versions obsolete.
d. Identify ways for people to purchase more products.
e. Create new markets.
E. Multinational and Global Corporations
1. Multinational corporations (“multinationals”) - enterprises that own,
control, or license production or service facilities in countries other
than where the corporations are headquartered
2. Critics of multinational corporations maintain that they are engines of
a. They exploit people and natural resources in order to manufacture
b. They take advantage of desperately poor labor forces, lenient
environmental regulations, and sometimes nonexistent worker
c. Externality costs: Hidden costs of using, making, or disposing of a
product that are not figured into the price of the product or paid
for by the producer.
3. Supporters of multinational corporations maintain that these
companies are agents of progress.
III. Consequences of Instrumental-Rational Action
A. Core Concept 4: To be efficient, organizations somet