Organisations are technical instruments; designed as means to definite goals... they are expendable. Institutions... may be partly engineered, but they have also a “natural” dimension. They are the products of interaction and adaptation; they become the receptacles of group idealism; they are less readily expendable.

Running an organisation... generates problems, which have no necessary (and often an opposed) relationship to the professed or "original" goals of the organization. The day-to-day behaviour of the group becomes centered around specific problems and proximate goals, which have primarily an internal relevance. Then, since these activities come to consume an increasing proportion of the time and thoughts of participants, they are-from the point of view of actual behaviour – substituted for the professed goal.

Whereas some consequences of our actions occur as planned, others are unanticipated; social actions are not context-free but are constrained, and their outcomes are shaped by the setting in which they occur. Especially significant are the constraints on action that arise from commitments enforced by institutionalization. Because organizations are social systems, goals and procedures tend to achieve an established, value impregnated status. We say that they become institutionalized.

The relations outlined on an organization chart provide a framework within which fuller and more spontaneous human behavior takes place. The formal system may draw upon that behavior for added strength; it will in its turn be subordinated to personal and group egotism.

Institutionalization is a process. It is something that happens to an organization over time, reflecting the organization’s own distinctive history, the people who have been in it, the groups it embodies and the vested interests they have created, and the way it has adapted to its environment.

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An organization is a group of living human beings. The formal or official design for living never completely accounts for what the participants do. It is always supplemented by what is called the “informal structure,” which arises as the individual brings into play his own personality, his special problems and interests. Formal relations co-ordinate roles or specialized activities, not persons.

To institutionalize is to infuse with value beyond the technical requirements of the task at hand. The prizing of social machinery beyond its technical role is largely a reflection of the unique way in which it fulfills personal or group needs. Whenever individuals become attached to an organization or a way of doing things as persons rather than as technicians, the result is a prizing of the device for its own sake. From the standpoint of the committed person, the organization is changed from an expendable tool into a valued source of personal satisfaction.