Final answer:
The statement is false as formal organizations typically become more bureaucratically structured as they grow in size and complexity, leading to greater formalization and impersonality.
Step-by-step explanation:
The statement that organizations tend to become less formalized as they age and grow in the number of employees is generally false. As formal organizations such as schools, businesses, hospitals, and governments grow in size and complexity, they often become more bureaucratized.
Bureaucracies are characterized by a hierarchy of authority, clear division of labor, explicit rules, and impersonality, as noted by sociologist Max Weber. The trend towards bureaucratization, as some scholars argue, can be seen in the McDonaldization of society, where local institutions increasingly resemble one another, adopting standardized processes.
However, there is a noteworthy modern trend where organizations are adopting flatter organizational structures for greater nimbleness and to foster teamwork. In such cases, directors may seek feedback from entry-level employees and encourage collegial relationships. Although this suggests a move towards less formalization, it does not necessarily apply to the entire organization's structure but may often be contained in certain processes or departments.