Formal & Informal Organisation structure with example

OB

1. An

ASSIGNMENT

ON

“Briefly describe the elements of formal and informal
organization in your own organisation. If you are not
comfortable in describing your own organisation, then select
any other organisation. Suggest some possible improvements
in the organization”


Submitted To Submitted By
Sh. D. V. Deshpande Dr. Rajiv Kumar
Faculty-Vamnicom Roll No. – 5418
54
th Batch-PGDCBM

.
VAINKUTH MEHTA NATIONAL INSTITUTE OF COOPERATIVE
MANAGEMENT, PUNE (MAHARASHTRA)
MINISTRY OF AGRICULTURE AND FARMERS WELFARE, GOVT. OF INDIA

2. Rajasthan State Dairy Development Corporation (RSDDC)
Dairy development was initiated by the state government in the early seventies
under the auspices of Rajasthan State Dairy Development Corporation (RSDDC)
registered in 1975. Two years later RCDF assumed responsibility for many of the
functions of RSDDC. It became the nodal agency for implementation of operation
flood in the state. Rajasthan Cooperative Dairy Federation (RCDF) set up in 1977 as
the implementing agency for dairy development programmes in Rajasthan is
registered as a society under the Rajasthan cooperative societies act 1965.
Objectives:
 To carry out activities for promoting production, procurement, processing
and marketing of milk & milk products for the economic
development of animal husbandry/ farming community.
 Development & expansion of such other allied activities as may be conducive
for the promotion of the dairy industry, improvement
protection of milch animals and economic betterment of those engaged in
milk production.
 Organise and provide technical inputs.
 Erection of Dairy, chilling plant, cattle feed plants for unions.
 Study of problems of mutual interest of the Federation and milk unions.
 Impart training and orientation to dairy co-operative members.
 Advise, assist and guide milk unions
 Undertake audit and accounts supervision
 Encourage fodder production etc.
Services:
 The marketing activities of the Federation include providing support to the
Milk Unions in milk and milk products marketing, within and outside the
State. RCDF is presently marketing milk & milk products under Saras brand.
 Fresh milk of different compositions and long shelf life tetra pak milk is being
marketed in rural and urban areas. The Federation is a major supplier of
tetra pak milk (UHT) to the armed forces.
 RCDF is also marketing various fresh milk products in Saras brand, which
are, Chhach, Lassi, Shrikhand, Flavoured Milk, Paneer and Dahi. Long life
products such as Cow ghee, Ghee, Table Butter, Skim Milk Powder and Tetra
Pak Milk (Taza Milk and Fit and Fine) are also being marketed.

3.  Saras Milk Parlours serving a complete range of milk products are operational
at 416 points and there are 3,018 booths and 18,787 shop agencies in
Rajasthan.
Three Tier Structure:
 The dairy co-operative movement operates on three tier system wherein
farmer members own dairy co -operative societies (DCS) which own district
milk producer's union. The unions collectively own the RCDF.
 It is a vertically integrated structure that establishes a direct linkage between
those who produce the milk and those who consume it.
 Federation - Provides service & support to unions. Marketing within &
outside state, Liaison with government and NGO agencies, mobilisation of
resources & coordinating & planning programmes / projects.
 Union - Develops village milk cooperative network, procures milk from DCS,
processes & markets. Sale of cattle feed
and related inputs, promotion of cross
breeding through AI and NS, promotion of
fodder development and general support
& supervision to DCS.
 DCS - Provides input services (AH, AI) to
its members and procurement of milk.
The dairy co-operatives depict the following
institutional properties:
 Democratically elected board of DCS, milk
unions & Federation from among their members.
 Adoption of such bye laws which ensure democratic process on the principles
of cooperation.
 Management & ownership of assets by the cooperatives.
 Autonomy in pricing, marketing & appointment of personnel.
 Employment of professional.
 Total control of the organization is in the hands of its members.
Training & Extension
Seven milk unions viz Ajmer, Bhilwara, Bikaner, Jaipur, Jodhpur, Kota and Udaipur
are operating centres where training is provided for several area related to DCS
operations viz DCS secretary, Management Committ ee member, AI workers, milk
tester, first aid worker, chairman orientation, dairy animal management and
various refresher courses etc.
To enhance active participation of the producer members in the DCS, to create
awareness about improved animal husbandry p ractices viz feeding, crossbreeding,
animal management and stimulate fodder production, extension activities are

4. carried out at DCS and at milk unions. Under farmer's induction & orientation
programme, visits to the dairy plants are arranged to demonstrate the process &
disposal of the milk collected from the producers. Producers also taken to visit the
model Indian dairy cooperative-Anand Milk Cooperative Union (AMUL ) in Gujarat
and they in turn educate other milch animal owners in their area about the
practices and benefits of cooperatives. Audio-visual aids, field demonstrations,
extension camps are used to explain feeding, breeding, fodder development and
clean milk production practices.
Organization:
 The Federation is a State level apex co-operative organization owned by its
member unions each of which, in turn, is owned the dairy co -operative
societies in its area of operation which are themselves owned by farmer
members.

 The Federation has a board of directors which has overall responsibility for
the planning policies, financial resource mobilisation and management,
member and public relations as well as liaison with agencies of the state and
central government, financing institutions etc. The Federation has a chief
executive designated as Managing Director.
Formal Organization:
The structure of a formal organisation can be functional or divisional. The features
of a formal organization are as follows.
 It specifies the relationship between various job positions.
 Efforts of various departments are coordinated, inter-linked and integrated
through the formal organisation.
 It is designed by the top management for a smooth functioning of the
business.
 It puts more emphasis on work than interpersonal relationships.
Advantages of Formal Orgnaisation:
 It is easier to fix relationships as relationships are well defined.
 Each member plays its own role. There is no ambiguity in it.
 There is an established chain of command.
 There is effective accomplishment of the goals and also gives stability to the
organisation.
Disadvantages of Formal Orgnaisation :
 A formal communication takes a lot of time to communicate. This could lead
to procedural delays.
 Poor organisation practices may not provide adequate recognition to creative
talent.

5.  Formal organisation does not provide a complete picture of how an
organisation works.

RCDF Organization structure which is headed by the Administrator or Board of
Directors through Managing Director. Each department is headed by the General M
Manger with sanctioned subordinate staff. The formal organization as it has
documents citing the procedure, roles, and responsibilities, functions, rules, and
regulations are all mapped out clearly with a hierarchy respected and must be
followed properly. Each person in the organization knows their functions and work
according to the set of rules and handbooks therefore if any mistake is made then
the person responsible is easier to reprimand. The goals are mapped out and the
organization strives to achieve them all.




Administrator/Board of
Directors
Managing Director
RCDF
General Managers of
1. Department Finance & Accounts
2. Department of Marketing
3. Personnal & Admin
4. Purchase
5. Quality Control
6. Projects & DPM
7. Supervision and Planning
8. District Milk Fedrations
General manager
Institutional
Development Officer
(Add. Registrar
Deputy Registrar
Asstt. Registrar
Ministrial &
Subordinate Staff

6. Structure of Marketing Department (Formal)

Informal Organization:
The informal organization is the interlocking social structure that governs how
people work together in practice. It is the aggregate of, norms, personal and
professional connections through which work gets done and relationships are built
among people who share a common organizational affiliation or cluster of
affiliations. It consists of a dynamic set of personal relationships, social networks,
communities of common interest, and emotional sources of motivation. The
informal organization evolves, and the complex social dynamics of its members
also.
Informal Organization











General Manager (Marketing) (01)
Manager (01)
Deputy Manager (02)
Asstt. Manager (06)
Ministrial & Subordinate Staff (09)
Administrator/Board of
Directors

Managing Director RCDF

Institutional Development
Officer (Add. Registrar)

GM GM GM GM GM
• Deputy Registrar
• Asstt. Registrar
• Ministerial &
Subordinate Staff

7. An Informal organization is less structured and more fluid as it is born out of mutual
relations and It arises spontaneously as people interact with each other. It usually
does not have strict rules and regulations to be followed. Thus It depends on the
social relationships of the individuals in the organization and the workings depend
on the interactions between them.
 Informal organizations encourage interactions between members and value
social relationships. Therefore The unity and workings of the informal
organization are built through the trust and mutuality of the members. The
employees are not bound by any rules and hierarchy is usually not
implemented therefore relations form on all levels.
 The communication chann el can go in any direction without any set of
orders. Therefore the communication in this organization is swift with
everyone trusting and speaking openly about their thoughts in meetings and
it is known to have smooth or fast communications between member s. It
emphasis freedom, openness, and choice where members express
themselves. There might arise problems of accountability if members do not
work unlike in a formal organization.
 The decisions made are generally come upon collectively as an opposite to
the formal organization. The Collective decision really matters in an informal
organization as relationships and freedom are held high. The leader in an
informal organization is chosen from the interactions, relations and personal
qualities of the members therefore a huge amount of stress is on emotional
connections and social networks.
 Informal organizations are continuously evolving and dynamic therefore it
usually does not have well-defined goals instead it is more flexible in that
area as goals can change with members’ interactions and attitudes. They are
also known to be flexible and adaptable to change and their environment as
they are sensitive to it.
 Additional this type of organization exists in each and every enterprise. Since
social interactions between people are unavoidable therefore informal
organizations come up when people can associate themselves with each
other socially which results in a feeling of togetherness that brings out social
satisfaction to the members of the group or organization.

8. Advantages of Informal Organization:
 It results in a faster flow of information. This is because it does not follow
any procedures for flow of information.
 This fulfills the social needs of the employees. This could increase job
satisfaction.
 It helps in fulfilling organizational objectives.
Disadvantages of Informal Organization:
 Spreading of rumors could work against the interest of the company.
 It will be difficult for the management to implement changes if the informal
organization opposes it.
Conclusion
An informal organisation is just opposite of a formal organisation. The principal
difference between these two is that all the members of a formal organisation
follow a chain of command, which is not in the case of an informal organisation.
Moreover, there exists a superior-subordinate relationship (status relationship) in
the former, whereas such relationship is absent in the latter because all the
members are equal (role relationship).

Dr. Rajiv Kumar
Faculty Member
ICM -Jaipur