Difference Between Formalization and Specialization (With Table)

There are many words in the English dictionary that might appear to explain the same action but are very different from each other in every sense. Such is the case with Formalization and Specialization, which are often confused with being similar but are not. 

Formalization vs Specialization

The main difference between Formalization and Specialization is that Formalization refers to the structures of a job as well as their standardization. On the other hand, Specialization is a term used to indicate the levels to which a company or organization divides and subdivides its activities and events.

Formalization is a word that has been in use for a very long time. It is usually a common term in organizations, companies, etc. It mostly deals with structuralizing a job post and creating related rules, policies, regulations, routines, etc. Under formalization, one of the advantages is that the employees’ behavior becomes very predictable and therefore easy to manage.

Specialization is not a very ancient word but has become an important term for the youth. In a company, specialization is the method of dividing certain events and posts according to levels. This method of specialization is not always good and might make the job very monotonous and boring.

Comparison Table Between Formalization and Specialization

Parameters of ComparisonFormalizationSpecialization
AboutIt is the standardization and structure formation of a job.It is the division of levels and events within an organization.
OriginIt first came to use in the late 1500s.It first came to use in the late 1800s.
Focus onThe job-related rules, procedures, and policies.It focuses on the division of labor on different levels.
Advantages A very predictable behavior of employees.Job security and a very high level of productivity.
DisadvantagesA very long decision-making process.A very limited skillset of employees can lead to boredom.

What is Formalization?

When everything happens systematically, then it is easy to handle and manage things, especially in large firms or organizations where there are many different kinds of works and levels of procedure. It is important to have a set of rules and formal procedure protocol that is about the workflow and makes the complete task easier to manage. Formalization does exactly this task. In an organization, the process of making guidelines to manage work, providing rules and regulations, and structuring down the procedure and protocol for all the employees individually is what comes under formalization.

This task is mainly in the hands of the company’s manager or a team. The creation of many provisions happens under formalization. This includes organization relationships, mission, and goals, ranges of power and responsibilities, basic posts regarding task and process patterns. The whole process of formulation happens in three stages: the creation of legal documents for the organization, a description of units in a detailed manner, and lastly, the organization continues to improve the documents while adapting the change from internal as well external sources.

Sometimes the process of formalization becomes too long and results in a delay in the decision-making process which is seen as a drawback to this method of the organization, but at the same time, one of the advantages of formalization is that it makes it easier to predict the behavior of employees.

What is Specialization?

Specialization is a very vague term, and most often, people confuse it with mastering. It plays a very important role in the work process of an organization, no matter if it is a small-scale industry or a big industry. The process of specialization includes the division of labor. This is all the simple definition, and a description states that specialization is a method of dividing the roles of the employees in a company according to their skillset and need by the project. It places the employees on different levels in the organization according to the efficiency of their work. This makes it very helpful in determining the output from a particular sector of the company. 

One of the advantages of specialization is that there is extreme job security, and employees can expect a quality level of productivity from the employees. The reason for good productivity due to specialization is that the employees are getting the exact work that matches their skill set and working efficiency. However, over time the employees might also face some drawbacks due to specialization. The employees have experience in only one area, which restricts their field of work. This leaves them with a limited skill set and boredom of performing the same work for a long period.

Main Differences Between Formalization and Specialization

  1. The word ‘Formalization’ first came into use in the late 16th century. On the other hand, the word ‘Specialization’ in terms of an organizational method first came into use in the late 19th century.
  2. Formalization is a term that explains the formation and standardization of a post or job whereas, Specialisation is a term that best defines the distribution of posts to different levels in an organization.
  3. The process of Formalisation focuses on making policies, rules, and regulations. On the other hand, Specialization has its main focus on dividing the labor into different levels and standards.
  4. One of the advantages of Formalization is that it becomes easy for the employer to predict the behavior of the employee, while one benefit of specialization is that the work becomes easy and quick to cover.
  5. A drawback of Formalization is that there are lengthy procedures of deciding, whereas that of Specialisation is boredom due to monotony and restricted skillset.


Formalization and specialization are two very important methods in the structuring and working of an organization. A great combination of these two helps in developing a strong structure of rules for the firm. In addition to this, it also helps in determining the meaning of the output to plan future actions. Just as formalization is important to run the industry in an organized manner similarly, specialization is necessary to maintain the quality of the output.


  1. https://journals.sagepub.com/doi/abs/10.1177/003803857400800104
  2. https://www.jstor.org/stable/2392199

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