Question

Distinguish between formal and informal organisation on the basis of emphasis, flow of authority and tenure.

Distinguish between ‘formal organisation’ and ‘informal organisation’ on the basis of

1. formation
2. stability
3. communication
4. flow of authority

Answer 1

Basis of Distinction	Formal Organisation	Informal Organisation
1. Meaning	Structure of authority relationships	Network of social relationships among employees
2. Formation	Deliberately planned and created by management	Emerges spontaneously as a result of social interactions among people
3. Purpose	To achieve planned goals of the organisation	To satisfy social and cultural needs of members and fulfil common interests
4. Structure	Has a well-defined structure of tasks and relationships	No clear-cut structure. A complex network of relations
5. Nature	Rigid, stable and predictable	Flexible, unstable and unpredictable
6. Focus	Jobs, functions and technical aspects	Interests and other human aspects
7. Behaviour of members	Standards of behaviour and performance are prescribed and enforced by management	Standards of behaviour and performance are evolved by mutual consent among members
8. Leadership	Managers act as leaders by virtue of their superior position	Members voluntarily choose their leaders
9. Flow of communication	Formally established or official lines of communication called scalar chain	Members communicate in any direction as per convenience
10. Origin	Originates as a result of company rules and policies	Originates as a result of social interaction
11. Organisation chart	Official structure, can be shown in the form of a chart	Unofficial structure, not shown on the chart of the company
12. Rules and regulations	Written and fixed, violation leads to penalties	Oral norms, violation leads to social disapproval
13. Interdependence	It exists independently of informal organisation	It exists within the framework of formal organisation
14. Authority	Arises by virtue of position in managerial hierarchy	Arises out of personal qualities
15. Stability	More stable and continues despite changes in people	Less stable; depends on personal relationships