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
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
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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