FORMALIZATION AND THE ORGANIZATIONAL LIFE CYCLE[1]

The theoretical importance of formalization has often been obscured in empirical investigation. This article discusses two outcomes of formalization: administrative efficiency, and influence. As formalization contributes to administrative efficiency, it also bestows upon the administrator power and influence. While some theoretical attention has been paid to the efficiency theme, influence has been largely ignored. The article suggests that formalization as code, as channel, and as standard can be best understood in the context of the organizational life cycle. Formalization (as efficiency) is likely to contribute to effectiveness early in an organization's history. Later in the life cycle, however, formalization (as influence) may contribute to organizational ineffectiveness and decline.