2. formal and informal organization

This presentation discusses about formal and informal organization in Principles of Management

1. FORMAL AND INFORMAL
ORGANIZATION
R.Arun Kumar, AP/Mech, RIT

2. ORGANIZATION :
Organization is defined as the place where, process of arranging
and structuring work to accomplish a goal happens.
R.Arun Kumar, AP/Mech, RIT

3. FORMAL ORGANIZATION :
The formal organization refers to the structure of jobs and
positions with clearly defined functions and relationships
as prescribed by the top management.
R.Arun Kumar, AP/Mech, RIT

4. FORMAL ORGANIZATION :
It can also be defined as system of well defined jobs with a
prescribed pattern of communication, coordination and delegation
of authority.
According to Louis Allen, Formal organization is a system of
well – defined jobs, each bearing a definite measure of
authority, responsibility and accountability.
R.Arun Kumar, AP/Mech, RIT

5. FORMAL ORGANIZATION :
In formal organization everybody is assigned a certain
responsibility for the performance of the given task and
given the required amount of authority for carrying it out.
R.Arun Kumar, AP/Mech, RIT

6. CHARACTERISTICS OF FORMAL ORGANIZATION :
1. Flexible and properly planned.
2. It is based on principle of division of labour and efficiency in
operation.
3. Concentrates more on the performance of jobs but not on the
individuals performing the jobs.
4. Flow of organization structure is usually framed.
5. Coordination and control among members of organization are
well specified.
6. Responsibility and accountability are clearly defined.
7. Unity of command is normally maintained.
R.Arun Kumar, AP/Mech, RIT

7. ADVANTAGES OF FORMAL ORGANIZATION :
1. Conflicts among workers is eliminated.
2. Overlapping of responsibility is avoided.
3. More stability is ensured in organization.
4. A sense of security arises from classification of the task.
5.Motivates every employee for their personal as well as
organization goal.
R.Arun Kumar, AP/Mech, RIT

8. INFORMAL ORGANIZATION :
An informal organization is an organization which is not
established by any formal authority, but arises from the
personal and social relations of the people.
R.Arun Kumar, AP/Mech, RIT

9. INFORMAL ORGANIZATION :
Informal organization refers to the relationship between
people in the organization based on personal attitudes,
emotions, prejudices, likes, dislikes etc.
R.Arun Kumar, AP/Mech, RIT

10. INFORMAL ORGANIZATION :
It arises naturally on the basis of friendship or some common
interest which may or may not be related with work.
R.Arun Kumar, AP/Mech, RIT

11. INFORMAL ORGANIZATION :
Generally large formal groups give rise to small informal or
social groups. These groups may be based on same taste,
language, culture or some other factor.
E.g. People of common language forming group, association of
people.
R.Arun Kumar, AP/Mech, RIT

12. CHARACTERISTICS OF INFORMAL ORGANIZATION :
1. Arises voluntarily.
2. Created based on the similarity among the members (age,
native, etc.)
3. Has no place in organization structure.
4. A person may become a member of several informal
organizations at same time.
5. Rules and regulations are not written, but are followed.
R.Arun Kumar, AP/Mech, RIT

13. ADVANTAGES OF INFORMAL ORGANIZATION :
1. As it gives satisfaction, motivates the workers and maintains
the stability of the work.
2. Fills up the gap in an organization.
3. Effective channel of communication.
R.Arun Kumar, AP/Mech, RIT

14. DISADVANTAGES OF INFORMAL ORGANIZATION :
1. May be a hurdle in achieving the objective of an organization.
2. Indirectly reduces effort of management to promote greater
productivity.
3. Easily spreads rumor.
R.Arun Kumar, AP/Mech, RIT

15. R.Arun Kumar, AP/Mech, RIT

16. R.Arun Kumar, AP/Mech, RIT