Formal & Informal organisation

FORMAL ORGANISATION

Deliberately Planned By the Top Management to Achieve the Specified Objectives Through the Network of Authority Responsibility Relationship

Features

• Created deliberately by management.
• Results in the creation of a scalar chain.
• Extra emphasis on work than on interpersonal relationships among employees.
• Assigned a specific job to each individual and a fixed authority.
• Motives to organizational goals.

Advantages:

1. Avoid duplication of effort as each member knows their duties.
2. Responsibility can be fixed due to well established authority responsibility relationship
3. Establish unity of command through a chain of command.
4. Accomplishment of goals by providing a structure where each employee knows their role
5. Stability to the organization by well-defined job and ensure growth and survival

Limitations:

1. Talent and creativity of worker is reduced  due to rigid policies
2. Rigid structures do not allow deviation due to fixed roles assigned to employees
3. Inter-personal relationship gaps between persons issuing orders and subordinates following orders
4. Procedural delays increase the time taken for urgent decision-making.

INFORMAL ORGANISATION

Informal Organization: -Complex network of social relationships which appear unexpectedly to fulfill social and human needs. Features

• Created automatically without any purposeful efforts by the management.
• Originates from within the formal organization as a result of personal interactions among employees.
• Does not follow any fixed path of authority.
• Employee's behavior is based on convenience  with no definite structure.

Advantages:

1. Fast:-Information travels very fast as  there is no procedural and language barrier
2. Add flexibility: - Serves the purpose not fulfilled by the formal organization.
3. Social needs of the members are fulfilled and give them a sense of belongingness in the organization.
4. Timely feedback Prescribed lines of communication are not followed and quick feedback gets from informal channels.

Disadvantages:

1. Opposition The management may not be successful in implementing changes if the informal organization opposes them.
2. Promotes groups: - Compels members to agree with the group expectations. This can be harmful  if the rule set by the group are against organizational interests.
3. Spread rumors: - Due to the fast flow of information it can spread rumors which may work against the goodwill of the formal organization