The formal and informal organization represents the organizational environment in which all the members interact with each other for a common goal. The formal organization represents the systematic way of going the work which includes: jobs of the employees and their relationship with superior/manager. In a formal organization, every member of the organization has some fixed authorities and responsibilities. On the other hand, the informal organization mainly focuses on the interpersonal relationships of the people of the organization. This network of friendly groups makes the informal structure.
Meaning of Formal organization:
Formal organization refers to the functional structure of the organization. In this organization, every person in the organization is bound in some responsibilities and powers to do the work. A manager assigns the duties according to the specialization of the job. It includes rules, instructions, procedures, and structures.
Importance of Formal organization:
- Systematic operations: In the formal organization all the operations are running smoothly because every task is completed with proper procedure.
- Coordination: All the departments are connected with each other and perform the operations in accordance with each other.
- No overlapping: all the operations are systematically divided into various departments so all well known about their work then we can say that there will be no duplication of work.
- Focus: Informal organization all the members of the organization mainly focus on work instead of interpersonal relations.
- Chain of command: Formal organization clearly shows the formal relationship between superior and subordinate. Employees follow the command of their superior in a proper manner .i.e.who reports to whom.
Meaning of Informal organization:
The informal organization represents the network of friendly groups formed automatically among the members of the organization who are interacting with each other. The main objective of the creation of an informal group is getting psychological satisfaction of the people at work.
Importance of informal organization:
- Fast communication: Informal organization does not follow the scaler chain so the flow of information spread fastly instead of following the long hierarchy.
- Fulfill social needs: Informal organization gives importance to the psychological needs which motivate the employees.
- Feedback: Top-level management can know the real picture of the employees on various plans and policies.
The Chart of difference between Formal organization and Informal organization
| Points of differences | Formal organization | Informal organization |
| Formation | The formal organization structure is formed in a planned and systematic manner. | The informal structure is formed or created on the spot without any planning. |
| Purpose | The purpose of formal organization is to complete the task systematically. | Psychological satisfaction is the main purpose of the informal organization. |
| Structure | There is a well-defined structure of the organization which clears the scaler chain and defines the superior-subordinate relationship. | It is not fixed that all people follow a specific kind of structure and scalar chain for communication or information. |
| Communication | Communication is pass through the scalar chain. | There is no fixed path for passing the information. |
| Suitability | The formal structure is more stable and lasts for a long time. | It is suitable on a temporary basis because people of the organization can change their social groups whenever they desire. |
| Example | Top-level management, middle-level management, lower or operation level management. | It comprises the social interaction between the people of the organization. |
| Rules | In a formal organization, people must obey the rules made by the management, in case employees are not following the rules then there will be a penalty on them. | There is no rule for the employees to make the social or friendly groups. |
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Conclusion:
Thus, The formal organization represents the systematic way of going the work which includes: jobs of the employees and their relationship with superior/manager. It includes rules, instructions, procedures, and structures. On the other hand, the informal organization represents the network of friendly groups formed automatically among the members of the organization who are interacting with each other. People of the organization can change their social groups whenever they desire.
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