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Managing Human Element at Work

Notes 10.1.2 Problems Associated with Informal Organization

Resistance to Change: There is tendency for the group to become overly protective of its life-
style and to stand like a rock in the face of change. They are strongly bound by conventions,
customs and culture.
Role Conflict: The quest for social satisfaction may lead members away from organizational
objectives. What is good for the employee is not always good for the organization. That
results in a role conflict. Workers want to meet the requirements of both their group and
their employer, but frequently these requirements are in conflict.

Rumour: Communication in formal organizational issues leads to the problem of rumour.
Conformity: Social control of informal groups exerts strong pressures for conformity.
10.1.3 Control of Informal Organization
The benefits of informal organization will accrue only when it is properly controlled and
its potential power properly channelized. The significant aspects of manager’s duty in this
connection are:
• He should recognize and reconcile himself to the existence of informal organization.
• He should influence the informal organization so that its role is positive and the
negative aspect is minimized.
• He should integrate informal organization with formal organization in such a way that
the former also contributes to the accomplishment of enterprise objectives.
• He should make informal organization secondary to formal organization, and not
vice versa.
10.1.4 Growth in Organization
Organizational growth, unlike growth of organisms which is a natural, evolutionary process,
can be planned, expedited, stabilized, controlled and even retarded keeping in view the
strategic plans of action. Given, however, growth as an objective of the organization, it
would be a worthwhile exercise to study the process of growth in organizations.
Larry E. Greiner has provided a sound theoretical framework to analyze the process of
organizational growth. He argues that growing organizations move through five relatively
calm periods of evolution, each of which ends with a period of crisis and revolution.
According to him, each evolutionary period is characterized by the dominant management
style used to achieve growth, while each revolutionary period is characterized by the
dominant management problem that must be solved before growth will continue.
As organization grows from small to large size, initially there is growth through the
creativity of the founders who are usually technically or entrepreneurially-oriented, but
soon management problems occur that cannot be handled through the mere dedication of
the founders and through informal channels of communication. A crisis of leadership develops.
To meet this, a strong manager is appointed. This new manager takes most of the responsibility
for initiating direction, while lower level supervisors get tasks carried out without enjoying
any decision-making authority. As the organization grows further, these lower level officers
demand more autonomy. The crisis of autonomy occurs. To handle this situation, authority
is delegated to lower level managers. But soon these levels internalize sub-unit goals and
it becomes difficult for the top manager to control and integrate their activities. So growth
through delegation leads to a crisis of control. There is need for coordination of their
activities as centralization is now no longer possible. So elaborate rules and regulations are
developed to obtain proper coordination but this itself creates the crisis of red tape. It is
hoped, perhaps, that this crisis can be overcome through collaboration. Hence, there is
growth through collaboration in which people work as teams, and social control and self-
discipline take the place of formal control.

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