Formal and Informal Organization

The classical theory describes the formal organization while the human relations theory highlights the informal organization. A formal organization is that which is depicted in organizational charts; diagrams, manuals, service books etc. By formal organization we mean the organization as deliberately planned, designed, and duly sanctioned by competent authority. It is organization as it appears to the observer from outside. But an informal organization is not written and is depicted by social relationships in the organization. In an organization there continually occur interactions, contacts and relationships which are not part of or governed by formal organization. These contacts may be incidental or accidental to organized activities or may arise from some personal desire or even gregarious instincts. Contacts may be friendly or hostile. These contacts make an informal organization which in the words of Chester Barnard, prefers to the aggregate of the personal contacts and interactions and the associated groupings of people.

An important attribute of an informal organization is that it is indefinite, structure less and has no definite sub-division. Informal organization could be seen as the pattern of the actual behaviours of the personnel in it. This actual behaviour often differs from the behaviour as expected in the formal organization.

A discussion of organizations commonly includes some examination of their “formal” and “informal” attribute. The “overlays” or informal attributes (collectively called by the name informal organization), it should be noted, are based on and could not exist without the formal. Five will be described here - (I) Socio-metric overlay, (2) functional over1ay, (3) decision overlay, (4) power overlay and (5) Communication overlay. The Socio-metric overlay describes the pattern growing out of the feelings of social attraction or rejection that people have for each other. Person - to person contacts between any levels of the...