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Unit 10: Informal Organization

10.11 Summary Notes
10.12 Keywords
10.13 Review Questions
10.14 Further Reading

Objectives

After studying this unit, you will be able to:
• Discuss informal organization

• Explain the importance of informal organization
• Discuss informal group formation
• Explain the types of informal groups
• Explain the stages of group development
• Define the distinction between formal and informal organization

• Discuss the benefits of informal organization
• Discuss the disadvantages of informal organization
• Explain harmonizing informal and formal organization
• Understand group dynamics

Introduction

To understand the operation of groups in organizations, it is necessary to define exactly what
a group is and the types of formal and informal groups that exist.

Imagine waiting in a line at the bank one day along with five other people. Now compare
this collection of individuals to your company’s board of directors. Although in our everyday
language we may refer to the people waiting in line as a group, they certainly are not a
group in the same sense as the members of the board. Obviously, a group is more than
simply a collection of people. But, what exactly is it that makes a group?
Social scientists have formally defined a group as a collection of two or more interacting
individuals with a stable pattern of relationships between them who share common goals
and who perceive themselves as being a group. Let us consider the various elements of this
definition separately.

Characteristics of Groups
First, groups are composed of two or more people in social interaction. In other words, the
members of a group must have some influence on each other. Whether the interaction
between the parties is immediate and occurs face-to-face, such as in committee meetings, or
is delayed, such as might occur when a written draft of a document is circulated for
comments.
Second, groups must possess a stable structure. Although groups can change, and often do,
there must be some stable relationships that keep group members together and functioning
as a unit. A collection of individuals that constantly changes (e.g. those waiting in the bank
line with you) would not be considered a group.

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