Written Versus Unwritten Rules: The Role of Rule Formalization in Green Tape

ABSTRACT

Contemporary conceptions of written organizational rules evoke images of inefficiency, constraint, and rigidity. While formal rules can generate negative outcomes, this article argues that their written nature is not the culprit. Rather, theory suggests that the formalization process increases a rule's likelihood of becoming effective “green tape.” From a rule design perspective, rule formalization is expected to trigger more organizational learning and greater scrutiny than unwritten rules, which undergo no such process. From a compliance perspective, written rules are expected to focus organizational attention and convey legitimacy better than unwritten rules, thereby increasing the likelihood of compliance. Combining these expectations, the article hypothesizes that written rules will exhibit more logical designs, higher compliance, and ultimately greater effectiveness than unwritten rules. Statistical modeling of two data sources supports these expectations and suggests the need to rethink reflexively negative attitudes toward written organizational rules.