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Management Concepts & Organisational Behaviour - Formal And Informal Organization

Differences between Formal and Informal Organization

   Posted On :  18.05.2018 01:20 am

The formal and informal organizations differ from each other in the following respects:

Differences between Formal and Informal Organization
 
 
The formal and informal organizations differ from each other in the following respects:
 
Origin: The reason and circumstances of origin of both formal and informal organizations are totally different. Formal organizations are created by conscious managerial decisions. But informal organizations arise naturally within the formal organization because of the tendency of the individual to associate and interact. Management has no hand either in emergence or in abolition of informal groups.
 
Purpose: Formal organizations are created for realizing certain well-defined objectives. But informal groups are created by organizational members for their social and psychological satisfaction. There may be a conflict between the goals of the formal organizations and those of the informal groups.
 
Activities: Activities in case of formal organization are differentiated and integrated around the objectives of the enterprise and are formalized into work units or departments on a horizontal basis. Individuals are fitted into jobs and positions and work groups as a result of managerial decisions. In case of informal organization, there are no specific activities. They arise from time to time as result of interactions and sentiments of the individuals. Informal groups may be based on common taste, language, culture or any other factor.
 
Structure: Formal organization is hierarchical, pyramid shaped and bureaucratic in structure with well defined positions, rigid delineation of roles and superior – subordinate relationships on impersonal basis, enforcement of organizational order through a set of policies, procedures, and rules, conscious emphasis on status, differential based on authority, narrow and downward oriented communication system, etc. On the other hand, informal organization is looks like a complicated and common social network of interpersonal relationships. Informal organization is loosely structure, with only unwritten norms of behavior enforced by consent. Communication is informal and multi directional. There are no rigid status differentials.
 
Membership. In a formal organization, every individual belongs to one work group only and works under one superior. But in case of informal organization, one person can be a member of more than one group, according to his choice. He may be a leader in one group and a follower in another. There is no rigidity about group membership.

Orientation: In case of formal organization, values, goals and tasks are dominantly economic and technical and they are concerned with productivity, profitability, efficiency, survival and growth. But in the case of informal organization, values goals and tasks are dominantly psycho-social, setting around individual and group satisfaction, affiliation, cohesiveness and friendship.
 
Norms of Behavior: In a formal organization, individuals are required to behave in the prescribed manner in their work situations. They are expected to behave in a rational manner. Deviations from the standard norms are dealt with according to the processes of organizational law and order. There is also a system of rewards and punishments. But in case of informal organization, individual behavior and group behavior influence each other. Behavior is more natural and social.
 
Interactions cut across formally established positions and relationships and there is free exchange of feelings and ideas. An informal organization develops its own norms of behavior and a system of rewards and punishments to ensure adherence of group norms.

 

Tags : Management Concepts & Organisational Behaviour - Formal And Informal Organization
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