Difference Between Formal and Informal Organization

With the difference between formal and informal organizations pointed out, it is time to take a look at the interactions between them. There is a widespread consensus in the literature that they coexist and supplement each other.

The formal organization of a business is the part that can be seen and represented in chart form. Each job in the formal organization is according to the organizational hierarchy that is on paper.

But the informal organizations within which people do their jobs in different ways and interact with other people in ways that do not follow formal lines of communication.

Difference between formal and informal organization

While the concepts of the formal organization and the informal organization can stand as negatives of each other, it is not always possible to know the one with the knowledge of the other in specific situations.

The formal organization is normally thought to be controllable, but that relates more to how the formal organization is defined. The formality of structure requires specific design specifications to be enacted. It implies the uncontrollability of the informal organization.

However, this relationship might be better explained through the use of “influence” rather than “control”. Therefore, the formal organization is controllable (by definition) and while the informal organization cannot be controlled (also by definition), it may be influenced. the significance of organizational learning and change, in general, is the mistake that is often made in trying to control the organization rather than trying to influence it.

The informal organization can make the formal organization more effective by provident support to management stability to the environment, and useful communication channels.

Some contrasts between formal and informal organizations are as follows:

Organization

Elements of Difference

Formal organization

Informal organization

Salient goals

Organization’s

Individuals

Structural units

Offices/positions

Individual Roles

Basis for  communications

Offices formally related

Proximity: Physical, professional, task, social, formal.

Basis for power

Legitimate authority

Capacity to satisfy an individual’s needs (often through expert or referent power)

Control mechanisms

Rules Norms

Type of hierarchy

Vertical

Lateral

Belonging of individuals

Specific Ambiguous

Communication

Structured Unstructured

Origin

Planned Spontaneous

Changes over time

Shifts Incremental

Group leadership

Explicit Implicit
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Difference between Formal and Informal Organization

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