The 6 Levels of Organisational Development: The Formalisation Stage

Levels of Organisational Development – Level 2

Formalisation stage

This post follows on from The Levels of Organisational Development. In that post I explored Level 1 or the Formation Stage of the six levels of organisational development. In this post I will look in a bit more detail at level 2 – The formalisation stage of organisational development:


organisational structure

Level 2: Formalisation Stage


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The distinctive features of the formalisation level of organisational development is characterised by: –

a)    ‘Functional’ barriers appearing between departments and employees.

b)    These delineations and barriers force employees and managers to defend their own local goals and indicators which can often conflict with those of the organisation’s common goals

c)    Bureaucratic administrative apparatus becomes larger together with the increased volume of management functions (control, coordination and meetings) and the growing total number of ‘managers




Companies in the formalisation level of organisational development find that they have to formalise the management system elements such as:


  1. the development of normative and regulatory documents
  2. definition of organisational structure in management
  3. the development of an information system to collect, record and analyse data on performance and efficiency of business processes for example.
  4. Additionally they have to start to take steps to reduce variation and the variability of the organisational processes and growing systems and processes


Then there becomes a clearer division of responsibilities and authority among the employees. Higher level of personnel administrative competence starts to become valued as well as operational competence. This then leads to a more formalised development strategy to ensure the continuity of development and operations.


Then what tends to happen is that some form of scorecard or dashboard is developed to connect the financial and non-financial indicators. In other words the organisation now starts to look at what is happening in the organisation and tries to use this to predict financial performance.

In my next post in this series I will look at the third stage of organisational development – Integration.


The Levels of Organisational Development

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David Wilkinson

David Wilkinson is the Editor-in-Chief of the Oxford Review. He is also acknowledged to be one of the world's leading experts in dealing with ambiguity and uncertainty and developing emotional resilience. David teaches and conducts research at a number of universities including the University of Oxford, Medical Sciences Division, Cardiff University, Oxford Brookes University School of Business and many more. He has worked with many organisations as a consultant and executive coach including Schroders, where he coaches and runs their leadership and management programmes, Royal Mail, Aimia, Hyundai, The RAF, The Pentagon, the governments of the UK, US, Saudi, Oman and the Yemen for example. In 2010 he developed the world's first and only model and programme for developing emotional resilience across entire populations and organisations which has since become known as the Fear to Flow model which is the subject of his next book. In 2012 he drove a 1973 VW across six countries in Southern Africa whilst collecting money for charity and conducting on the ground charity work including developing emotional literature in children and orphans in Africa and a number of other activities. He is the author of The Ambiguity Advanatage: What great leaders are great at, published by Palgrave Macmillian. See more: About: About David Wikipedia: David's Wikipedia Page