Advantage of informal organization

Answer 1

As a lot of organizational scholars have argued, a formal organizational chart often does not accurately depict how work really gets done within the organization. Rather networks of informal relationships are often crucial to the way work and processes of innovation within organizations take place. Social networks are often a rich source of information, knowledge, and expertise. Cross & Parker (2004) argue that organizations should put more efforts and resources into understanding, analyzing, and subsequently facilitating these informal networks of social relations, because of their crucial role to innovation and work in the contemporary knowledge economy. Rather than blindly trusting formal lines of communication and facilitating these, organizations should analyze the role of informal ties and attempt to create an organizational environment conducive to interpersonal and inter-organizational knowledge sharing, collaboration and learning. This explains why new HR practices such as communities of practice have received so much attention in organizational and management literature. Communities-of-practice are sites where people do not only share knowledge and information, it is a place where people come together because they have mutual interests and goals. As such it is a meaningful site and a source of sensemaking, identity, self-esteem, hence, motivation. Paradoxically, though, by revealing, facilitating, and structuring informal relationships, organizations formalize the informal. Also the temporary and unbureaucratic nature of these communities of practice is restrained by embedding these informal think-tanks into the formal structure of the organization.

In addition to theorizing about informal relationships, research has been conducted to reveal what type of informal relationships are most beneficial for sharing knowledge. Depending on the nature of knowledge, either weak or strong ties will be most effective to the transfer of knowledge between individuals and project teams within the organization. In general, social network analysts appear to assume that weak ties are especially beneficial to the transfer of new ideas and novel information, whereas tacit (non-codified) and sticky knowledge can only be transferred effectively through strong ties (Hansen, 1999). Strong ties are characterized by high levels of trust and often a mutual frame of reference, which makes it easier to transfer tacit knowledge. In the context of an organization, the development of trust and a mutual understanding is necessary for knowledge sharing and collaboration, hence, for effective work and innovation processes. In this context, several organizational scholars have argued for the need for face-to-face, on-site and spontaneous communication for the development of trust and the effective management of potential conflicts. In particular in the face of a globalized economy, where work and innovation increasingly occurs within and between geographically spread project teams, the relevance of face-to-face communication as well as the sharing of knowledge through informal ties is growing.

Answer 2

Advantages of informal organizations: Blend with formal system, Lighten management workload, Fill gaps in management abilities, Encourage improved management, Understanding and dealing with the environmental crisis. Informal organizations are created for satisfying the psychological and social-affiliation needs of the employees.