Page 123 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Unit 7: Organising

These relations are not developed according to procedures and regulations laid down in Notes
the formal organisation structure; generally large formal groups give rise to small informal
or social groups. These groups may be based on same taste, language, culture or some
other factor. These groups are not pre-planned, but they develop automatically within the
organisation according to its environment.
Characteristics of Informal Organisation
(a) Informal organisation is not established by any formal authority. It is unplanned
and arises spontaneously.
(b) Informal organisations reflect human relationships. It arises from the personal and
social relations amongst the people working in the organisation.
(c) Formation of informal organisations is a natural process. It is not based on rules,
regulations and procedures.

(d) The inter-relations amongst the people in an informal organisation cannot be shown
in an organisation chart.

(e) In the case of informal organisation, the people cut across formal channels of
communications and communicate amongst themselves.
(f) The membership of informal organisations is voluntary. It arises spontaneously
and not by deliberate or conscious efforts.
(g) Membership of informal groups can be overlapping as a person may be member of
a number of informal groups.

(h) Informal organisations are based on common taste, problem, language, religion,
culture, etc. It is influenced by the personal attitudes, emotions, whims, likes and
dislikes etc. of the people in the organisation.
Benefits of Informal Organisation
(a) It blends with the formal organisation to make it more effective.
(b) Many things which cannot be achieved through formal organisation can be achieved
through informal organisation.
(c) The presence of informal organisation in an enterprise makes the managers plan
and act more carefully.
(d) Informal organisation acts as a means by which the workers achieve a sense of
security and belonging. It provides social satisfaction to group members.
(e) An informal organisation has a powerful influence on productivity and job
satisfaction.

(f) The informal leader lightens the burden of the formal manager and tries to fill in the
gaps in the manager's ability.
(g) Informal organisation helps the group members to attain specific personal objectives.

(h) Informal organisation is the best means of employee communication. It is very fast.
(i) Informal organisation gives psychological satisfaction to the members. It acts as a
safety valve for the emotional problems and frustrations of the workers of the
organisation because they get a platform to express their feelings.
(j) It serves as an agency for social control of human behaviour.

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