Meaning and Importance of Organizing
Structure and Designs of Organizations
Principles of Organizing
Process of Organizing
Centralization and Decentralization
Informal organization refers to the relationships between people in an organization based not on procedures and regulations but on personal attitudes, prejudices, likes and dislikes, etc. Informal organization is a natural or spontaneous network of relationships based upon individual needs, moods, and emotions.
Distinction between Formal and Informal Organization
It is based on delegation of authority and may grow to immense size
It arises on account of social interaction of people and tends to remain small.
It is shown on the organization chart.
It has no place in the formal chart.
Formal authority attaches to a position
Informal authority attaches to a person.
Rules, duties and responsibilities are written and clearly defined.
It has unwritten rules and traditions.
It is created deliberately and is consciously planned
It is natural and arises spontaneously
Formal authority flows downwards.
Informal authority flows upwards or horizontally.
It provides for division of labor and has a definite structure.
It is structure less and develops out of social contacts.
It is permanent and stable.
It is relatively fickle and unstable.
Formal organization is created to meet organizational goals.
Informal organization arises from mans quest for social satisfaction.
Merits and Demerits of Informal Organization
Enables work to be done quickly and effectively
Opposes change of any kind
Reduces managerial work-load
Generates inter-personal and group rivalries
Leads to effective communication.
Promotes undesirable rumor mongering
Provides an outlet for employee emotions
Promotes dissatisfaction among employees
Promotes job-satisfaction on the part of employees