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Differentiate Between Formal and Informal Organisations on the Basis of Flow of Communication.

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Question

Differentiate between formal and informal organisations on the basis of the flow of communication.

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Solution

Basis Formal organisation Informal organisation
A flow of communication It takes place through the scalar chain. It can take place in any direction
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2017-2018 (March) All India Set 1

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‘Panda Trucks Ltd.’ decided to set-up its new truck manufacturing factory in the backward area of Bihar where very less job opportunities were available. People of that area welcomed this effort of ‘Panda Trucks Ltd.’. To attract people to work in its factory it also decided to provide many other facilities like school, hospital, market etc. in the factory premises.

‘Panda Trucks Ltd.’ started earning huge profits. Another competiting company asked its production manager ‘Sanjay’ to investigate the reasons of earning huge profits by ‘Panda Trucks Ltd’. Sanjay found out that in both the companies there was systematic co-ordination among the various activities to achieve organizational goals. Every employee knew who was responsible and accountable to whom. The only difference was that in his
organization communication took place only through the scalar chain, whereas ‘Panda Trucks Ltd.’ was allowing flow of communication in all the directions as per the requirement which lead to faster spread of information as well as quick feedback.

a. Identify the type of organization which permits ‘Panda Trucks Ltd.’ the flow of communication in all the directions.

b. State an advantage of the type of organization identified in (a) above.

c. State any two values which ‘Panda Trucks Ltd.’ wanted to communicate to the society.


Answer the following question:
Aradhana and Gandharv are heads of two different departments in 'Yumco Ltd.' 'They are efficient managers and are able to motivate the employee of their respective departments to improve performance. However, their drive to excel in their own sphere of activity instead of giving emphasis on objectives of the enterprise has hindered the interaction between the departments that Aradhana and Gandharv are heading. Often there are inter-departmental conflicts and they have become incompatible. This has proved to be harmful in the fulfillment of the organisational objectives. The situation has deteriorated to such an extent that the CEO of 'Yumco Ltd.' has hired a consultant, Rashmi, to resolve the problem. After studying the situation closely, Rashmi found that the problem has arisen due to inflexibility and a narrow perspective on the part of both Aradhana and Gandharv. She is of the view that this situation is a result of the type of organisational structure 'Yumco Ltd.’ has adopted.
From the above information, identify the organisational structure adopted by ‘Yumco Ltd.’ and state any three advantages of the structure so identified.


State any three limitations of divisional structure of an organisation.


State any two disadvantage functional structure of an organisation


Differentiate between formal and informal organization on the basis of the following:

Meaning


Differentiate between formal and informal organization on the basis of the following:

Flow of communication


A differential between 'Functional and 'Divisional' structure of organising on the basis of the following:

Specialisation


A differential between 'Functional and 'Divisional' structure of organising on the basis of the following:

Managerial development


Which structure of organisation is helpful in locating the inefficient employees?


In which organisation structure do we find “group norms”?


Grouping of activities on the basis of functions is a part of ____________.


As the span of management increases in an organisation, the number of levels of management in the organisation:


Grouping of activities on the basis of functions is a part of


______ is suitable for multi-product companies focusing on 'differentiated products'. 


______ ensures that the heads of separate business units in the organisation are responsible for profit or loss of their unit and have authority over it. 


______ ensures that the heads of separate business units in the organisation are responsible for profit or loss of their unit and have authority over it. 


______ is the process of dividing work into manageable activities and then grouping the activities which are similar in nature.


Which of the following is true regarding Organisational Structure :


An organization structure is deliberately designed by the top management to facilitate smooth functioning of the organisation. Which of the following is not a feature of such a structure?


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