FORMAL ORGANISATIONS

& INFORMAL

ORGANISATIONS

PREVIEW

Organisations Formal Organisations Features of formal organizational Advantages formal organization Informal organisation Advantages of informal organization Difference Between Formal And Informal Organisation Which one is better? CONCLUSION

ORGANISATIONS

A social unit of people that is structured and managed to meet a need or to pursue collective goals.

All organizations have a management structure that determines relationships between the different activities and the members, and subdivides and assigns roles, responsibilities, and authority to carry out different tasks. Organizations are open systems--they affect and are affected by their environment.

FORMAL ORGANISATIONS

It refers to the organisation structure deliberately

created by management for achieving the

objectives of enterprise.

It is a network of official authority responsibility

relationships and communication follows.

It is an official and rational structure.

Definition :-

According to Chester Bernard, “Formal

organisation is a system of consciously coordinated

activities of two or more persons towards a

common objectives. The essence of formal

organisation is conscious common purpose and

formal organisation comes into existence when

persons (A) are able to communicate with each

other (B) are willing to act and (C) share a

purpose.”

FEATURES OF FORMAL ORGANIZATIONAL

1.The formal organizational structure is created intentionally by the process of organising.

2.The purpose of formal organizational structure is achievement of organizational goal.

3.Formal organizational structure results in creation of superior subordinate relations.

4.Formal organizational structure creates a scalar chain of communication in the organization.

ADVANTAGES FORMAL ORGANIZATION

1.Systematic working Formal organization structure results results in systematic and smooth functioning of an organization.

2.Achievment of organizational objectivesFormal organizational structure is established to achieve organizational objectives.

3.No overlapping of work Informal organization structure work is systematically divided among various departments and employees. So there is no chance of duplication or overlapping of work.

CONTINUE……

4.co-ordination Formal organizational structure results in coordinating the activities of various departments.

5.Creation of chain of command Formal organizational structure

lays more emphasis on work than interpersonal relations.

DISADVANTAGE OF FORMAL ORGANIZATION

1.Delay in action

While following scalar chain and chain of command actions get delayed in formal structure.

2.Ignores social needs of employees

Formal organizational structure dos not give importance to psychological and social need of employees which may lead to demonization of employees.

3.Emphasis on work only

Formal organizational structure gives importance to work only, it ignores human relations, creativity, talents, etc.

INFORMAL ORGANISATION

It refers to the pattern of activity interactions and

human relationship which emerge spontaneously

due to social and psychological forces operating at

the work place.

It arises naturally on the basis of friendship or

some common interest which may or may not be

related with work.

Definition :-

According to Chester Bernard, “ Informal

organisation is joint personal activity with out

conscious common purpose though

contributing to joint result.”

Informal organisational structure

FEATURES OF INFORMAL ORGANIZATION

1.Informal organizational structure gets created automatically without any intended efforts of managers.

2.Informal organizational structure is formed by the employees to get psychology satisfaction .

3.Informal organizational structure does not follow any fixed path of flow of authority or communication.

4.Source of information cannot be known under informal structure as any person can communicate with anyone in the organization.

5.The existence of informal organizational structure depends on the formal organization.

ADVANTAGES OF INFORMAL ORGANIZATION

1.Fast communication Informal structure does not follow scalar chain

so there can be faster spread of communication. 2.Fulfills social needs Informal communication gives due importance

to psychological and social need of employees which motivate the employees.

3.Correct feedback Through informal structure the top level

managers can know the real feedback of employees on various policies and plans.

DISADVANTAGES OF INFORMAL ORGANIZATION

1.spread rumors

According to a survey 70% of informal spread through informal organizational structure are rumors which may mislead the employees.

2.No systematic working

Informal structure does not form a structure for smooth working of an organization.

3.May bring negative results

If informal organizational opposes the policies and changes of management, then it becomes very difficult to implement them in organization

4.More emphasis to individual interest

Informal structure gives more important to satisfaction of individual interest as compared to organizational interest.

Difference Between Formal And Informal Organisation

Origin

Formal organistion is created delebrately and consoiusly

by management.

Informal organisation emerges spontaneously on account

of socio psychological forces operating at the work place.

Purpose

Formal Organisation is created for achieving the

legitimate objective of the organisation.

Informal Organisation is created by the members of the

organisation for their social and psychological satisfaction.

Size

Formal group may be quite large in size.

Informal groups tent to be small.

Nature of Group

Formal groups are stable and may continue for

a very long period of time.

Informal groups were quite unstable in nature.

Difference Between Formal And Informal Organisation…..

Number of Group

Generally the number of informal group is greater

than the number of the formal group

Authority

Formal organisation is bound together by a

hyrarchiechal structure.

In Informal organisation all members are equal

Difference Between Formal And Informal Organisation…..

Behavior of Members

In formal organisation behavior of the members

were governed by formal rules and regulations

In the informal organisation the behavior of the

members is governed by norms beliefs and value

of the group

Difference Between Formal And Informal Organisation…..

Communication

In formal organisation, communication normally

flows through the prescribed chain of command.

In informal organisation communications pass

through the informal channels.

Abolition

Management can abolish the formal groups at

any time.

Management has no control over informal

groups which are the creation of natural desire

of human beings to interact.

Difference Between Formal And Informal Organisation…..

Leadership

In formal organisation, leadership is vested in

managers.In informal organisation, leadership is not associated with managership.

Status

There are sharp status differentials among the

members of formal organisation, which inhibit free

interaction and socialisation.

In informal organisation there may be social ranking

among people but these do not prevent free interaction

among people.

Difference Between Formal And Informal Organisation…..

WHICH ONE IS BETTER?

Informal Organisation is better than Formal Organisation

According to :LeadershipNumber of GroupBehavior of MembersCommunicationStabilityobjective

CONCLUSION

It is depend upon situation and varies from place to place.Always formal organization are not good or informal organization are not good .

It is also depend upon people.