Formal and Informal Organization


Formal and Informal Organization:

Formal organization means that have well structured and well defined job positions that are accompanied with planed responsibilities and authorities and fully devoted to the organizational goals. Informal organization on the other hand has not definite structure, roles or interpersonal relationship. Both have significant importance in the workplace. Management should study the working of the informal organization so that it can be used for the achievement of organizational goals.

Formal organization:

A system of consciously coordinated activities or forces of two or more persons is called formal organization: Chester I Barnard.

Structure of the formal organization is deliberately designed for accomplishment of particular objectives. It enables the employees to work in close coordination to achieve the defined objectives and goals. It is important for the individual to work in specified manner and follow the rules and regulations of the organization. The formal organization has some important key pillars namely a) division of labor, b) well designed structure, c) defined responsibility and authority d) span of control.

Basic principal of the formal organization is specialization and division of labor. The overall work is divide into small tasks and given to the employees having skills to complete those tasks. The employees are deployed in different departments made according to the tasks related. They are given sufficient authorities and responsibilities for completing the tasks. Also some specific number of employees report to the manager.

Characteristics of the formal organization

The basic characteristics of the formal organizations are as follows:

  • Organizational structure is designed by the top management for accomplishment of well defined objectives
  • Organizational structure is designed on the basis of specialization and division of labor for better efficiency.
  • Organization structure focuses on the job and tasks not on the people doing them.
  • Feelings and emotions of the employees are not taken in the consideration.
  • It is compulsory for all to follow the authority and responsibility relationship.

Informal organization:

Informal organization means the relationship between the employees based on the common attitude, interests and emotions. It means the innate grouping of the people at the workplace.

The informal organization refers to the people in group associations at the work but not specified on the blueprint of the formal organization. – Joseph A. Litterer.

The informal grouping of the people is not planned and it consist complex relations. It is very difficult to predict the behavior and role of the informal organization. These groups are result of common interests, tastes, language and many other common factors

Characteristics of the informal organization:

Various features or characteristics of the informal organization are

  • These are unplanned associations and are spontaneous
  • Informal organizations are formed in natural way.
  • It is based on religion, language, tastes, culture and other things that are common.
  • It gives importance to human relationships and care about emotions and feelings of all the members involved.
  • An individual can be member of more than one informal group at a time.