Page 122 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Principles and Practices of Management

Notes Characteristic of Formal Organisation
(a) Formal organisation structure is laid down by the top management to achieve
organisational goals.

(b) Formal organisation prescribes the relationships amongst the people working in
the organisation.
(c) The organisation structures is consciously designed to enable the people of the
organisation to work together for accomplishing the common objectives of the
enterprise.

(d) Organisation structure concentrates on the jobs to be performed and not the
individuals who are to perform jobs.
(e) In a formal organisation, individuals are fitted into jobs and positions and work as
per the managerial decisions. Thus, the formal relations in the organisation arise
from the pattern of responsibilities that are created by the management.

(f) A formal organisation is bound by rules, regulations and procedures.
(g) In a formal organisation, the position, authority, responsibility and accountability
of each level are clearly defined.

(h) Organisation structure is based on division of labour and specialisation to achieve
efficiency in operations.

(i) A formal organisation is deliberately impersonal. The organisation does not take
into consideration the sentiments of organisational members.
(j) The authority and responsibility relationships created by the organisation structure
are to be honoured by everyone.
(k) In a formal organisation, coordination proceeds according to the prescribed pattern.
Advantages of Formal Organisation

(a) The formal organisation structure concentrates on the jobs to be performed. It,
therefore, makes everybody responsible for a given task.
(b) A formal organisation is bound by rules, regulations and procedures. It thus ensures
law and order in the organisation.
(c) The organisation structure enables the people of the organisation to work together
for accomplishing the common objectives of the enterprise.
Disadvantages or Criticisms of Formal Organisation
(a) The formal organisation does not take into consideration the sentiments of
organisational members.
(b) The formal organisation does not consider the goals of the individuals. It is designed
to achieve the goals of the organisation only.
(c) The formal organisation is bound by rigid rules, regulations and procedures. This
makes the achievement of goals difficult.

2. Informal Organisation: Informal organisation refers to the relationship between people
in the organisation based on personal attitudes, emotions, prejudices, likes, dislikes etc.
an informal organisation is an organisation which is not established by any formal
authority, but arises from the personal and social relations of the people.

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