The main difference between formalization and specialization is that formalization is how jobs are structured and standardized within an organization, whereas specialization is the degree to which activities are divided and then subdivided into individual jobs.
Every successful company has an excellent organizational structure behind it. An organizational structure is a structure designed to match a company’s goals and describe how job tasks are formally divided, grouped, and coordinated. Organizational structures have six components: chain of command, the span of control, specialization, departmentalization, centralization/decentralization, and formalization.
Key Areas Covered
1. What is Formalization
– Definition, Features
2. What is Specialization
– Definition, Features
3. Difference Between Formalization and Specialization
– Comparison of Key Differences
Formalization, Specialization, Organizational Structure
What is Formalization
Formalization refers to how jobs are structured and standardized within an organization. It describes the extent to which policies, rules, and procedures within an organization are articulated. In formalized structures, there are many written rules and regulations. These structures control the behavior of employees so that they have little autonomy to make decisions. Moreover, formal structures can make employee behavior more predictable. This is because whenever a problem arises at work, employees will refer to procedures and rules to handle it. Using this method, employees throughout the organization will respond to problems in a similar way, thereby creating consistency of behavior.
Employees with highly formalized jobs do not have much input about their job – what to do, how to do it or when to do it. For example, workers on the assembly line have highly formalized jobs as they don’t have much autonomy. Sales associates calling on customers, on the other hand, have little formalization in their jobs.
What is Specialization
Specialization refers to the degree to which an organization divides and then subdivides its activities into individual jobs. We also call this division of labor. In simple words, specialization refers to focusing on a specific job. If you put one worker on the task of creating a dress, he/she may take a long time to make it. But if you use workers specializing in different tasks (for example, one worker for designing, one worker for cutting, one worker for adding buttons, etc.), then the tasks become standardized, and workers learn to do their work quickly with practice.
By the 1940s, most manufacturers were applying the concept of work specialization. Using this method, unskilled workers can do easy tasks, whereas workers with special skills will perform the tasks that need specific skills. Therefore, workers with skills will not have to waste their time on simple tasks that do not need special skills. From a productivity point of view, specialization is an ideal method that can increase production and overall input. Specialization can also reduce the production cost, thereby decreasing the overall product price.
Difference Between Formalization and Specialization
Formalization refers to how jobs are structured and standardized within an organization, whereas specialization refers to the degree to which activities in an organization are divided and then subdivided into individual jobs.
Formalization focuses on policies, rules, and procedures related to jobs and tasks, while specialization focuses on the division of labor.
In brief, formalization and specialization are two main components of an organizational structure. The main difference between formalization and specialization is that formalization focuses on policies, rules, and procedures related to jobs and tasks, while specialization focuses on the division of labor.
1. Devaney, Erik. “The 6 Building Blocks of Organizational Structure [Diagrams].” HubSpot Blog, 3 June 2020.
2. “Division of Labor and Specialization.” Lumen – Introduction to Business.
3. “Organizational Structure.” Lumen – Principles of Management.