Answer and Explanation:
Formal institutions are very important at the processing stage of systems theory. This is because these institutions are capable of creating the formative elements of the processing stage. This can be seen because non-formal institutions are primarily responsible for creating the rules, ideas, concepts and values of a society. These elements are the main components of the process of limiting a system and creating goals for that system, which are created in the processing stage of systems theory. This theory, in turn, refers to how natural and artificial systems are formed and how they are able to influence the lives of human beings, either through interaction with other systems or by the influence itself.