Page 96 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Unit 4: Organising

(c) The organisation structure enables the people of the organisation to work together Notes
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.

These relations are not developed according to procedures and regulations laid down in
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.

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