Organization Norms and Rules

  1. Types of Norms and Rules:
    • - Pre-defined models of acceptable/inacceptable behavior (bypass your boss)
    • - Patterns of behavior and action deemed appropriate (wearing ties at the office)
    • -The laws and customs continuing the external legal system in internal organization (equal pay)
    • - Humanly devised constraints that shape human interaction (Traffic rules)
  2. Basic Functions of R&N
    • - Reduce Negotiation costs by substituting case by case problem solving
    • - Reduce conflict by depersonalization
    • - Reduce uncertainty b predetermining behavior
  3. Reason for Formalization
    • - Transparency: Justice and accountability, governance by rights rather than power, are sustained by formalization
    • - Enforceability: Protection in case of conflict of interest is enhanced by formalization
    • - Complexity: If many matters and agents are to be coordinated formalization sustains memory and information processing capacity
  4. Optimal Degree of Formalization
    • - Large systems (Large firms or large networks of firms) are and should be more formal than smaller ones
    • -High conflict relatons (employment contracts, personnel evaluations, one chance buyer-seller relations)
    • - Size/complexity and conflict lead to more formalization
Card Set
Organization Norms and Rules
Norms and Rules