Exploring the Organizational Dilemma between Formality and Informality: The Paradox of Innovation in the Italian Justice System

The literature on organizational innovation has long debated the role of formality and informality. Many scholars, adopting different theoretical and methodological perspectives, agree that a highly formalized structure can hinder innovation. High levels of formalization can reduce both individual and organizational propensity for developing innovative solutions. Conversely, a lack of formalization can slow or block the full implementation and spread of innovation, particularly in complex organizational systems.

This paper argues that innovation processes bring to light an organizational dilemma between formality and informality, often leading to paradoxical effects. Formality and informality can be compared to two magnetic poles exerting equal yet opposite forces, pushing organizations to find a balance point that is elusive and precarious, constantly shifting over time.

To explore these dynamics, the paper focuses on the case of innovation in the Italian justice system. Over the past twenty years, two distinct phases have alternated, driven by the frequency of formal rules, each producing paradoxical effects.

When the system leaned towards informality, many local courts developed informal agreements with the legal profession and started bottom-up innovation projects, yielding positive outcomes for local communities. However, this also increased disparities in justice service delivery across the country, creating a map of inequalities for citizens.

When the system shifted towards formality, the judicial administration reduced disparities and improved legal certainty, but this discouraged local courts from seeking innovative solutions to local challenges. As a result, local innovations were abandoned or forgotten, even when they had proven effective in serving citizens.

This paper, based on the findings of a multi-year research project combining both quantitative and qualitative methods, aims to contribute to the understanding of the dilemma between formality and informality in public sector innovation processes.