What is the difference between an informal organization and formal organization?

Answer 1

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Answer 2

Within any company there are two types of organization - the formal structure and the informal structure. Both effect the organization and relationships between staff. The formal organization refers to the formal relationships of authority and subordination within a company. The primary focus of the formal organization is the position the employee/manager holds. Power is delegated from the top levels of the management down the organization. Each position has rules governing what can and cannot be done. There are rewards and penalties for complying with these rules and performing duties well. The informal organization refers to the network of personal and social relations that develop spontaneously between people associated with each other. The primary focus of the informal organization is the employee as an individual person. Power is derived from membership of informal groups within the organization. The conduct of individuals within these groups is governed by norms - that is, social rules of behavior. When individuals break these norms, other members of the group impose sanctions on them. Clearly, the informal structure can be either beneficial or detrimental to the functioning of the company or both. People who work in an organization are only human and their effectiveness may depend on their personal relations with those around them. An obvious illustration is that if a manager is aware of a personality clash between employees he must respond.