Formal vs informal organization

CEBUTECHNOLOGICALUNIVERSITY
HUMANRELATIONS
PREPAREDBY:
JULIEMAYMARIBOJO
JOHNCARLOSGESTA

 The Formal Organization is a system of well-defined
jobs, each bearing a definite measure of
authority, responsibility and accountability.
Louis Allen
 Formal Organization is a system of consciously
coordinated activities of two or more persons
toward a common objective.
Chester Barnard

 The formal organization is a goal-oriented
entity that exist to accurate
the efforts of individuals and it refers
to the structure of jobs and positions
with clearly defined functions,
responsibilities and
authorities

 To facilitate the accomplishment of the goals of the
organization
 To facilitate the co-ordination
of various activities
 To aid the establishment of
logical authority relationship
 To aid the establishment of
division of labor
 Create group cohesiveness

1. Well defined rules and
regulation

3. Determined objectives and
policies

4. Limitation on the activities of the
individual

5. Strict observance of the principle
of coordination

6. Messages are communicated
through vertical chain

 Set specific Goals for organization
 Establishing working relationship
 Create group cohesiveness
 Organizational Development
 Discipline
 Human Resource Development

b) Social Aspects of benefits: a) Financial Aspects of benefits:
 Security
 Slow but steady promotion
 Commissioned ranks open to men and
women graduates
 Can't be fired
 Good retirement benefits
 Many different branches appeal to
different interests
 Social Status
 See interesting places and people

 Limited Flexibility
 Slowness of processing
 Communication Barrier
 Quality of decision
 Slowness in Problem
detection & processing

 An Informal organization is an aggregate of
interpersonal relationships without any conscious
purpose but which may contribute to joint results.
Chester Barnard
 Informal organization is a network of interpersonal
relationship that arise when people associate with
one another .
Keith Davis

 The informal organization is the
interlocking social structure that governs
how people work together in practice. It is
the aggregate of behaviors, interactions,
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.

Chess group
Bowling Team
Morning coffeee regulars
Cricket lovers

Informal Leader-
The leader of an informal
organization is elected by the
members of the groups for different
reasons such as age, seniority,
technical, competence, work
location, and responsive
personality, etc. depending upon
the work situation.
Role of Informal Leader:
a) To help the group reach its goals, and
b) To maintain and enhance group life.

 Evolving constantly
 Grass roots
 Dynamic and responsive
 Excellent at motivation
 Requires insider knowledge to be seen
 Treats people as individuals
 Flat and fluid
 Trust and reciprocity
 Difficult to pin down
 Essential for situations that change quickly or
are not yet fully understood

 Perpetuate the cultural and social values

 Provide social status and satisfaction

 Promote communication among members

 Better Total System
 Lighter workload for management
 Work group satisfaction
 A safety valve for emotions
 Cohesiveness
 Fill up gaps
 Channel of employee communication
 To plan and act more carefully
 Encourage Cooperation
 Understanding and Dealing with the Environmental
Crisis
 Encourage improved management practice

1) Resistance to change
2) Role conflict
3) Rumor
4) Conformity
5) Undermine discipline
6) Power politics
7) Interpersonal and
intergroup conflicts

INFormal Formal
 has its own rules and regulation that must be
followed by the members (employees and
managers)
 has a system of co-ordination and authority.
 has a clear superior-subordinate relationship
 the objectives are specific and well-defined
 all the members are given specific duties and
responsibilities.
 does not have its own rules and regulation
 has no system of co-ordination and authority
 doesn't have any superior-subordinate
relationship or any specific and well-defined
objectives
 communication is done through the grapevine

INFormal Formal
 formed by the top level management
 formed by social forces within the
formal organization

 The members have to follow certain rules and
regulations. These rules are available in
writing (documented). They are made by a
formal authority (superiors). If the members
follow these rules properly, then they will be
rewarded. However, if they do not follow
these rules, they will be punished.
 The members of an informal organization do
not have to follow any rules and regulations
INFormal Formal

 the duties, responsibilities, authority
and accountability of each member is
well-defined
 there are no fixed duties,
responsibilities, authority,
accountability, etc. for the members
INFormal Formal

 the objectives or goals are specific and
well-defined
 The main objectives are productivity,
growth, and expansion
 the objectives are not specific and well-defined
 The main objectives are friendship,
security, common interest, individual
and group satisfaction, etc
inFormal Formal

 The members get financial benefits
and perks like wages or salaries,
bonus, travelling allowances, health
insurance, etc.
 The members get social and personal
benefits like friend circle, community,
groups, etc.
inFormal Formal

 stable
 uses formal channels of
communication.
 shown on the organization chart
 not stable
 uses informal channels of
communication (i.e. grapevine)
 not shown on the organization chart
inFormal Formal

Formal vs informal organization

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