Final answer:
The correct statement is that small organizations tend to be informal, while large organizations are more formal. The formality in larger businesses stems from well-defined bureaucratic structures, hierarchies, and impersonal approaches to management and operations.
Step-by-step explanation:
The small organization would be more informal, and the large business would be more formal. This can be understood considering formal organizations, such as larger businesses, are highly bureaucratized and often display a hierarchy of authority, impersonality, and a clear set of rules. They serve an instrumental function, being oriented toward tasks or goals. In contrast, small organizations might have fewer layers of bureaucracy, less formalized roles, and potentially more personal interactions among members.
Large organizations such as hospitals, schools, and governments tend to fall into categories like normative/voluntary, coercive, and utilitarian, each having distinctive structures and typically upholding a bureaucratic format, which is reinforced by the ideals of McDonaldization of society that promote uniformity and predictability.