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formal and informal organisation

1. Formal Organisations & Informal Organisations

2. 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

3. 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.

4. 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.

5. 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.”

6. Features of formal organizational 1.The formal organizational structure is created i ntentionally 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.

7. Advantages formal organization 1.Systematic working Formal organization structure results results in systematic and smooth functioning of an organization. 2.Achievment of organizational objectives Formal 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.

8. 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.

9. 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.

10. 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.

11. Definition :- According to Chester Bernard , “ Informal organisation is joint personal activity with out conscious common purpose though contributing to joint result.”

12. Informal organisational structure

13. 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.

14. 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.

15. 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.

16. 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.

17. 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 …..

18. 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 …..

19. 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 …..

20. 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 …..

21. 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 …..

22. Which one is better? Informal Organisation is better than Formal Organisation According to : Leadership Number of Group Behavior of Members Communication Stability objective

23. 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.