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activities or forces of two or more person. A formal organization is deliberately designed to achieve some particular objectives. It refers to the structure of welldefined jobs, each bearing a definite measure of authority, responsibility and accountability.
goals.
Organization structure is based on division of labour & specialization to achieve
members.
The Authority and responsibility relationship created by organization structure are to be
honoured by everyone. The position in the organization hierarchy determines the relative status of the incumbent.
such a structure it will be very difficult for employees to agree between themselves on duties and responsibilities of each, and such difficulties multiply in geometric proportions with increasing size of the organization.
It generates clarity on what support and input each employee can expect from
It provides a structure for laying down pay scales and taking other decisions linked
to organizational levels.
It helps in other human resources development activities such as recruitment,
Informal organization
Informal organization refers to the relationship between people in the
organization based on personal attitudes, likes, dislikes, etc. these relations are not developed according to procedures and regulations laid down in the formal organization structure. These groups may be based on common taste, language, culture or some other factor. They are not preplanned, but automatically through continuous interaction between people.
culture, etc.
the membership of informal organization is voluntary. At the same time a person
may be a number of informal groups. Thus, there can be overlapping in these groups.
(iv) Innovation and originality: By enabling members to modify the job situation more
to their liking, the informal organization creates the necessary environment for individual innovation and originality. The individual can experiment with his ideas.
(v) Important channel of communication: News travels quickly via informal groups. They are the clandestine transmitters and receivers of information before it is
officially released.
(vi) Social control: Informal groups provide all its members a set of norms or guides to correct behaviour. Members are expected to conform to those norms. (vii) Check on authority: Informal group forces the manager to plan and act more carefully than he would otherwise. Informal organization is a check and balance on unlimited use of authority by a manager.
2. To management
(i) Less supervision: Informal group is self-policing. This relieves the management of much of the burden of supervision. (ii) An aid to management: The information gives the manager much feedback about employees and their work experiences thereby increasing his understanding of what he needs to do.
and culture.
o Role conflict and sub-optimization: in an informal organization, everyone works
towards the same objectives. Members put their own group objectives ahead of organization's objectives. Hence, the organization suffers.
o Rumour: An informal organization sometimes functions as a carrier of rumour. o Group think philosophy: Workers become loyal to their groups.
2. Formed by Whom?
A formal organisation is formed by the top level management.
An informal organisation is formed by social forces within the formal organisation.
The members of a formal organisation have to follow certain rules and regulations. These rules are available in writing (documented). They are made by a formal authority (superiors). If the members follow these rules properly, then they will be
rewarded. However, if they do not follow these rules, they will be punished.
The members of an informal organisation do not have to follow any rules and regulations.
In a formal organisation, the duties, responsibilities, authority and accountability of each member is well-defined. In an informal organisation, there are no fixed duties, responsibilities, authority, accountability, etc. for the members.
5. Objectives or Goals
In a formal organisation, the objectives or goals are specific and well-defined. The
A formal organisation uses formal channels of communication. An informal organisation uses informal channels of communication (i.e. grapevine)
8. Organisation Chart
A formal organisation is shown on the organisation chart. An informal organisation is not shown on the organisation chart.
9. Superior-Subordinate Relationship
The members of the formal organisation get financial benefits and perks like wages