Page 97 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Management Practices and Organisational Behaviour

Notes (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.
3. Management's Attitude towards Informal Organisation: Formal organisation, no doubt
is an important part of the organisation but it alone is not capable of accomplishing the
organisational objectives. Informal organisation supplements the formal organisation in
achieving the organisational objectives. If handled properly, informal organisation will
help in performing the activities of the organisation very efficiently and effectively. In the
words of Keith Davis, "An informal organisation is a powerful influence upon productivity
and job satisfaction. Both formal and informal systems are necessary for group activity
just as two blades are essential to make a pair of scissors workable". As both formal and
informal organisations are quite essential for the success of any organisation, a manager
should not ignore the informal organisation. He should study thoroughly the working
pattern of informal relationship in the organisation and use the informal organisation for
achieving the organisational objectives.

Caselet Go Ahead – Meeting Competition through
Successful Organisational Structure

o Ahead is a leading supplier of support services in Britain to the transport
industry including bus, rail and aviation. It employs over 24,000 people and is
Gresponsible for around 800 million journeys annually. Go-ahead's success is
reflected in its increased turnover and increased operating profit.

Go-ahead's growth is closely linked to deregulation and privatisation in UK. Once services
were deregulated, Go-Ahead took over bus services in much of the North-East. In 1994, it
became a public limited company. The company's operations have since spread to many
areas in the South. The privatisation of rail services brought other opportunities and
Go-Ahead is now the largest commuter train operator in London.
Privatisation can bring benefits to customers, such as greater competition leading to more
efficient services. Government also helps to keep transport efficient by setting standards
for transport companies. Companies bid for franchises (the right to run certain services)
and agree to run them in a particular way. Once in operation, poor performance can lead
to fines. Poor performance will also work against franchises being renewed.
To be competitive, companies like Go-Ahead need to find out what customers want and
then provide it. Go-Ahead found that key factors for customers were safety, reliability,
convenience and affordability.
Contd....

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