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Formal Organization Structure: Utilitarian, Normative & Coercive

  • 0:05 Formal Organizations
  • 1:00 Characteristics of…
  • 2:23 Coercive Organizations
  • 3:49 Utilitarian Organizations
  • 4:40 Normative Organizations
  • 6:06 Lesson Summary
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Lesson Transcript
Instructor: Erin Long-Crowell
Our modern society is filled with groups of people that range from small families to giant corporations. In this lesson, we discuss the characteristics that must be present in order for a group to be considered a formal organization. We also discuss the differences between coercive, utilitarian, and normative organizations.

Formal Organizations

Imagine you are walking along Main Street in a nearby city. What groups of people would you see if you looked around? There would certainly be groups of people driving, walking, and shopping, but there would also be groups of people working in stores, restaurants, medical facilities, and more. In addition to a plethora of social groups, our modern society is filled with formal organizations.

A formal organization is a type of group that is deliberately constructed and whose members are organized to achieve a specific goal. Churches, schools, hospitals, and companies are just a few examples. Modern formal organizations allow us to accomplish tasks in the most efficient way possible. Could you imagine how our society would run without government, businesses, and healthcare institutions?

A school is an example of a formal organization.
School Example of Formal Organization

Characteristics of Formal Organizations

We've discussed the characteristics of social groups in other lessons but have mainly focused on informal groups, like families and friends. There are a few characteristics that must be present in order for a group to be considered a formal organization. These include:

  1. A deliberate division of labor and power.
  2. A written set of rules, policies, and procedures.
  3. A system for replacing members.

Families, groups of friends, and ethnic groups are not formal organizations because they do not have these features. However, churches, schools, hospitals, and companies are examples of formal institutions because they meet all three of these characteristics.

For example, a school has a division of labor and power amongst students, faculty, and staff. Each person has a defined role and is allocated specific responsibilities and limited power. Rules, policies, and procedures are determined by the federal and state government, school board, and so on. Finally, any faculty or staff member that breaks rules or goes against norms can be replaced by someone else who is willing and able to meet expectations.

Coercive Organizations

These three characteristics are present in the structure of all formal organizations. However, there are three types of formal organizations, and each has its own way of maintaining control over its members. The first type is a coercive organization, which maintains control through force. Once you enter a coercive organization, you cannot leave without permission. The culture is one of strict obedience and order, and members are typically stripped of individuality and forced to conform.

A prison is a good example of a coercive organization. Membership is not voluntary. Inmates are stripped of their belongings, forced to wear identical clothes, and are identified by a number instead of by name. There are strict rules, and prison guards are present at all times to enforce them.

Prisoners are members of a coercive organization.
Prison Example of Coercive Organization

The military is another example of a coercive organization. Although entrance to the military is usually voluntary, you cannot exit without being discharged or retiring. Members of the military wear uniforms and similar hairstyles. They have strict rules for how to behave and must follow a chain of command. In any coercive organization, life is routine and rules are very important.

Utilitarian Organizations

The second type of formal organization is a utilitarian organization, which maintains control through bartering. People join utilitarian organizations because they have something to gain. The culture is one of productivity and purpose. Members are compensated for their contributions. If you are employed, you are likely a member of a utilitarian organization. You have individual responsibility and receive wages for your contributions.

Colleges and universities are also examples of utilitarian organizations. For the money and effort put into your classes, you receive credentials and a diploma confirming your degree. A large percentage of people in modern societies spend a great deal of time in utilitarian organizations.

Normative Organizations

The final type of formal organization is a normative organization, which maintains control through shared moral commitment. Membership in normative organizations is purely voluntary. People join because they want to or because of a strong, positive sense of obligation. Members work together to promote an important social cause. Churches, political parties, and fraternities are examples of normative organizations. Members join voluntarily and share a positive sense of unity and purpose.

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