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Informal Organization

What is an informal organization?

An informal organization is a group of people who share a common identity and are committed to achieving a common purpose. Informal organizations are created by the will and shared identity of their members. The operation of an organization, in reality, is known as an informal organization as opposed to a formal organization, which is based on roles and responsibilities.

Informal organizations emerge from the interaction or communication between employees irrespective of their designations and hierarchies. It runs parallel to a formal organization.

According to Chester Barnard, "an informal organization is an aggregate of interpersonal relationships without any conscious purpose but which may contribute to joint results."

According to Schein, an informal organization exists in the sense that it has no legal existence, no legal boundaries, no membership roster, no tangible assets, no formal structure, and no official leadership. The distinguishing feature of an informal organization is the social fabric that binds its members together with a common identity.

Concept and Types

Informal organizations have no fixed rules or hierarchies defined between people. It is fluid and dynamic in its form. Both formal and informal groups coexist in an organization and are essential for efficient functioning. We can classify informal organizations into three groups that are defined by the similarities and dissimilarities of the work performed by the members of each group.

These are listed below:

Horizontal Group- People who work at the same level in an organization belong to a horizontal group. Such groups promote mutual support and information sharing among the members. It is often found that people share the same problems, concerns, and interests. They solve problems without depending on their bosses or higher or lower hierarchical members. For example, people working for different departments like sales, operations, production, etc. but who are at the same level in the organizational hierarchy form a horizontal group.

Vertical Group- People working at different levels in an organization belong to the vertical group. Such groups are formed through skip-level relationships. For example, a top-level employee may be associated with a first-level employee, or a group of first-level employees may establish a group with their bosses.

Such groups promote better communication and quick access to the issues arising in the organization.

Mixed Group- People from different levels and different departments create a Mixed Group. The groups are created based on common interests like club memberships, common interests or their backgrounds. For example, the president of the sales department may bond with the director of technology.

Example of Informal Organization

Members of the sales team join every day for lunch with the human resource team. Another example of such informal groups is that sales team personnel help tech development employees to figure out the requirements of the product.

Features of Informal Organization

Informal organizations exist in every organization. They are built spontaneously, over time, and not deliberately.

Policies, procedures, or norms are not required to create such groups; they are formed merely based on personal interactions and common interests.

There is no specific direction in the flow of information.

It does not possess any definite structure or hierarchy.

Another feature of informal organizations is that they are found in every business. It is because social interactions are essential.

Employees who do not get along well with one another may not be able to work cooperatively. This affects the organization's financial profitability.

Finally, managers can only regulate rather than prohibit informal organizations. This regulation is significant because it has the potential to influence the productivity and morale of everyone involved.

Difference Between A Formal and Informal Organization

A formal organization is created by the management deliberately, whereas an informal organization is created spontaneously by members.

Formal organizations are stable and run long, but informal groups are unstable.

The purpose of a formal organization is to accomplish its organizational goal, as opposed to an informal organization, which fulfills the psychological and social needs of its members.

In a formal organization, the job of a member is clearly defined by the management and is held accountable to the organization. This is in contrast to an informal organization, which is formed based on interpersonal relationships and has no defined responsibilities or roles.

Formal organizations are bound by hierarchies, but informal group members are equal.

In formal organizations, the focus is on work performance, whereas in informal ones, it's interpersonal relationships.

Rules and regulations are well-defined in a formal organization, while informal organizations have their norms, beliefs, and values.

The size of formal organizations is large when compared to informal organizations, which are small.

Functions of Informal Organization

Informal organizations have several important functions. They are:

It provides a source of friendship and social connections for members of the organization.

Interpersonal relationships and informal groups can help employees better understand what is going on in the company and establish contact with it so that they have a certain sense of control over the work environment.

Informal organizations can provide status and recognition that formal organizations cannot or will not provide employees.

The interpersonal network can help the socialization of new employees by informally communicating rules, responsibilities, basic goals, and job expectations.

Organizational grapevine helps employees better understand what is happening in their workplace by quickly transmitting information and conveying it to places that cannot be reached by the formal system.

Importance of Informal Organization

Information is exchanged between groups and people quickly because the lines of communication are not defined.

Quick feedback is received.

Job satisfaction is attained because the social needs of the members are fulfilled, thus leading to stability in the organization.

People in an organization are diverse, and so are their needs, which cannot be fulfilled by the formal design of the organization.

They provide the members with an opportunity to build status and social interaction and enable them to overcome identity crises. It also provides an audience to listen to and reach out to.

The informal organization has several advantages. They are:

First, they instill a sense of unity and solidarity among members.

It happens because they are obsessed with each other's social interactions. Therefore, this leads to job satisfaction and stability in the organization.

In addition, a strong informal organization can be an effective means of rapid communication. Managers and employees can use this.

The informal organization can compensate for the limitations imposed by formal structure, enabling it to successfully achieve organizational goals.

The managers also benefit from the informal organizations by using them to understand the grievances of employees.

Workers benefit from the emotional security provided by the informal organization. A sense of being present and belonging in a positive atmosphere boosts job satisfaction. A positive influence from an informal organization leads to increased productivity.

Managers know that members of the informal organization will keep an eye on its activities, which is why they plan carefully after going through the benefits and drawbacks.

Disadvantages

Informal grouping gives rise to conflicts because multiple people tend to boss each other.

To achieve social satisfaction sometimes, the members slip away from formal organizational timelines, thereby decreasing productivity.

With communication between different members across departments, there are chances of rumors getting spread quickly.

Spreading of wrong information disrupts the work environment hampering the work balance.

People share common interests in clubs to form groups. However, when a non-conforming member joins this group they may be pressured to conform to the group which can be against the organizational interests. This can be a cause of harassment or physical abuse.

Change Resistance

Informal groups can create resistance to the rules or strategies set by the management and cause difficulty in implementation.

An informal group may restrict modifications in the work environment.

FAQs on Informal Organization

1. Why is an Informal Organization Needed?

Informal organizations serve some basic functions. They help in maintaining the cultural values of people and also provide social contentment to the members.

2. What is the role of management for an Informal Organization?

Informal groups prove helpful to the managers because of the functions they can serve. These functions include:

They restore lively and effective communication.

Informal organizations control the people to work together in practice.

They can maintain values that are necessary for the group members.

3. What impact does an informal organization have on company performance?

Informal organization is a network of contacts and communication channels established based on informal relationships among individuals within the organization. Informal relationships can be between people at the same level, or between people at different levels and different departments. Informal organizations allow employees to better control their work environment by providing a continuous flow of company information throughout the organization, thereby helping employees keep abreast of the situation.

4. What are the functions of an Informal Organization?

The main function of informal organizations is basically to maintain people's cultural values. When people are able to connect with each other socially, they always feel a sense of unity. Therefore, another function of informal organizations is to provide members with social satisfaction. Informal organizations also provide an effective way of communication for their members. They can communicate with each other freely and efficiently. Managers can use it to send messages quickly and directly.

5. Does Vedantu provide study materials?

Yes, Vedantu offers extensive study materials to help students understand concepts better. The study materials include video tutorials, study notes, previous year question papers and much more. With the help of these study materials, students can ace the exams with good marks. Students can also visit the website of Vedantu for various other learning resources like previous years’ question papers, important questions, sample papers, mock tests, etc. These resources help students to practice and prepare well for their examinations and ace them when the time comes. As another alternative and quick solution, students can also download the Vedantu app and enjoy all the benefits for free.

Informal Organization

An organization is nothing but a group of people who aim to achieve common objectives. One can look at it as a single entity as well. Each organization comprises of the human relationships between people who are a part of it. There may be either a formal or an informal organization depending on the nature of these relationships between people.

Features of Informal Organization

Informal organizations depict very peculiar features. Firstly, they emerge and develop spontaneously. Formal policies and procedures do not play a role in their creation as in the case of formal organizations.
Secondly, an informal organization emerges from social interactions between people. Ranks and functions of people have no relevance here. This is why personal prejudices and attitudes are so important in informal organizations.
People generally tend to interact more with those with whom they can relate. Hence, things like social, political , cultural, religious outlook are important in this regard.
Another feature of informal organizations is that they exist in each and every enterprise . This is because social interactions between people are inevitable.
Lastly, managers cannot prohibit informal organizations; they can only regulate them. This regulation is important because it can affect the productivity and morale of the people involved.
If employees do not gel with each other well, they may not work cordially with cooperation. This, in turn, affects the financial profitability of the organization itself.

Functions of Informal Organization

The primary function of informal organizations is basically to maintain cultural values of people. When people can associate themselves with each other socially, they always feel a sense of togetherness. Consequently, another function of informal organizations is to provide social satisfaction to members.
Finally, an informal organization also provides an effective means of communication to its members. They can interact with each other freely and efficiently. Managers can use it to send across messages quickly and directly.

Merits of Informal Organization

Informal organizations have several benefits. Firstly, they inculcate a sense of unity and togetherness among their members.
This happens because of the social interactions they indulge in with each other. This consequently leads to work satisfaction and stability in the organization.
Furthermore, a robust informal organization can be an effective means of swift communication. Both employees and well as managers can use this.
Managers also benefit from informal organizations by using them to understand the grievances of employees. Since employees freely interact with each other, they can unify and address their problems collectively.

Demerits of Informal Organization

The main problem of informal organizations is that they can make members averse to change. Their social interaction with each other creates lifestyles, cultures , and conventions. People do not positively respond to changes to these things easily.
For example, employees of many companies organize gatherings and functions for festivals. If the management suddenly decides to ban such social events, it will definitely face resistance.
Another problem with informal organizations is that members have to conform to a set of togetherness. This, in turn, can lead them away from the larger organizational objectives. A conflict of roles like of this kind can be detrimental to the organization.

Control of Informal Organizations

As we learned above, managers cannot create or prohibit informal organizations but they can regulate them. In order to do this, managers must first accept and acknowledge their existence.

Next, they should also strive to be a part of it in order to assert influence over the employees. Furthermore, managers should try to streamline objectives of the informal organization with those of the business itself.

Solved Examples on Informal Organization

Question: State the missing word in the following sentences.

(1) Informal organizations emerge from __________ interactions between people.

(2) Managers cannot create informal organizations but they can __________ them.

(3) Informal organizations can serve as an effective means of __________ for both employees as well as managers.

Answers: (1) social (2) regulate (3) communication

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10.1 Organizational Structures and Design

What are mechanistic versus organic organizational structures?

First, an organizational structure is a system for accomplishing and connecting the activities that occur within a work organization. People rely on structures to know what work they should do, how their work supports or relies on other employees, and how these work activities fulfill the purpose of the organization itself.

Second, organizational design is the process of setting up organizational structures to address the needs of an organization and account for the complexity involved in accomplishing business objectives.

Next, organizational change refers to the constant shifts that occur within an organizational system—for example, as people enter or leave the organization, market conditions shift, supply sources change, or adaptations are introduced in the processes for accomplishing work. Through managed change , leaders in an organization can intentionally shape how these shifts occur over time.

Finally, organizational development (OD) is the label for a field that specializes in change management. OD specialists draw on social science to guide change processes that simultaneously help a business achieve its objectives while generating well-being for employees and sustainable benefits for society. An understanding of OD practices is essential for leaders who want to maximize the potential of their organizations over a long period of time.

Together, an understanding of these concepts can help managers know how to create and direct organizations that are positioned to successfully accomplish strategic goals and objectives. 1

To understand the role of organizational structure, consider the experience of Justin, a young manager who worked for a logistics and transportation company. Their success at leading change in the United States gave their leaders the confidence that Justin could handle a challenging assignment: organize a new supply chain and distribution system for a company in Northern Europe. Almost overnight, Justin was responsible for hiring competent people, forming them into a coherent organization, training them, and establishing the needed infrastructure for sustained success in this new market.

If you were given this assignment, what would you do? How would you organize your employees? How would you help them understand the challenge of setting up a new organization and system? These are the kinds of questions that require an understanding of organizational structure, organizational design, organizational change, and organizational development.

One of the first issues Justin will need to address deals with how they will organize the system. “The decisions about the structure of an organization are all related to the concept of organizational design. There are two fundamental forms of structure to remember when designing an organization.

To address these questions, we need to be familiar with two fundamental ways of building an organization.

The formal organization is an officially defined set of relationships, responsibilities, and connections that exist across an organization. The traditional organizational chart, as illustrated in Exhibit 10.2 , is perhaps the most common way of depicting the formal organization. The typical organization has a hierarchical form with clearly defined roles and responsibilities.

When Justin sets up the formal organization, they will need to design the administrative responsibilities and communication structures that should function within an organizational system. The formal systems describe how flow of information and resources should occur within an organization. To establish the formal organization, they will identify the essential functions that need to be part of the system, and they will hire people to fill these functions. They will then need to help employees learn their functions and how these functions should relate to one another.

The informal organization is sometimes referred to as the invisible network of interpersonal relationships that shape how people actually connect with one another to carry out their activities. The informal organization is emergent, meaning that it is formed through the common conversations and relationships that often naturally occur as people interact with one another in their day-to-day relationships. It is usually complex, impossible to control, and has the potential to significantly influence an organization’s success.

As depicted in Exhibit 10.3 , the informal organization can also be mapped, but it is usually very different than the formal organization. The chart you see in this example is called a network map, because it depicts the relationships that exist between different members of a system. Some members are more central than others, and the strength of relationships may vary between any two pairs or groups of individuals. These relationships are constantly in flux, as people interact with new individuals, current relationships evolve, and the organization itself changes over time. 2

The informal organization in Justin’s design will form as people begin interacting with one another to accomplish their work. As this occurs, people will begin connecting with one another as they make sense of their new roles and relationships. Usually, the informal organization closely mirrors the formal organization, but often it is different. People quickly learn who the key influencers are within the system, and they will begin to rely on these individuals to accomplish the work of the organization. The informal organization can either help or hinder an organization’s overall success.

In sum, the formal organization explains how an organization should function, while the informal organization is how the organizational actually functions. Formal organization will come as Justin hires and assigns people to different roles. They can influence the shape of the informal organization by giving people opportunities to build relationships as they work together. Both types of structures shape the patterns of influence, administration, and leadership that may occur through an organizational system.

As we continue our discussion of structure and design, we will next examine different ways of understanding formal structure.

Types of Formal Organizational Structures

Now, Justin will need to choose and implement an administrative system for delegating duties, establishing oversight, and reporting on performance. They will do this by designing a formal structure that defines the responsibilities and accountability that correspond to specific duties throughout an organizational system. In this section, we’ll discuss the factors that any manager should consider when designing an organizational structure.

Bureaucracy

One of the most common frameworks for thinking about these issues is called the bureaucratic model . It was developed by Max Weber, a 19th-century sociologist. Weber’s central assumption was that organizations will find efficiencies when they divide the duties of labor, allow people to specialize, and create structure for coordinating their differentiated efforts, usually within a hierarchy of responsibility. He proposed five elements of bureaucracy that serve as a foundation for determining an appropriate structure: specialization, command-and-control, span of control, centralization, and formalization. 3

Specialization

The degree to which people are organized into subunits according to their expertise is referred to as specialization —for example, human resources, finance, marketing, or manufacturing. It may also include specialization within those functions. For instance, people who work in a manufacturing facility may be well-versed in every part of a manufacturing process, or they may be organized into specialty units that focus on different parts of the manufacturing process, such as procurement, material preparation, assembly, quality control, and the like.

Command-and-Control

The next element to consider is the reporting and oversight structure of the organization. Command-and-control refers to the way in which people report to one another or connect to coordinate their efforts in accomplishing the work of the organization.

Span of Control

Another question addresses the scope of the work that any one person in the organization will be accountable for, referred to as span of control . For instance, top-level leaders are usually responsible for all of the work of their subordinates, mid-level leaders are responsible for a narrower set of responsibilities, and ground-level employees usually perform very specific tasks. Each manager in a hierarchy works within the span of control of another manager at a level of the organization.

Centralization

The next element to consider is how to manage the flows of resources and information in an organization, or its centralization . A highly centralized organization concentrates resources in only one or very few locations, or only a few individuals are authorized to make decisions about the use of resources. In contrast, a diffuse organization distributes resources more broadly throughout an organizational system along with the authority to make decisions about how to use those resources.

Formalization

The last element of bureaucracy, formalization , refers to the degree of definition in the roles that exist throughout an organization. A highly formalized system (e.g., the military) has a very defined organization, a tightly structured system, in which all of the jobs, responsibilities, and accountability structures are very clearly understood. In contrast, a loosely structured system (e.g., a small, volunteer nonprofit) relies heavily on the emergent relationships of informal organization.

Mechanistic and Organic Structures

Using the principles of bureaucracy outlined above, managers like Justin have experimented with many different structures as way to shape the formal organization and potentially to capture some of the advantages of the informal organization. Generally, the application of these principles leads to some combination of the two kinds of structures that can be seen as anchors on a continuum (see Table 10.1 ).

On one end of the continuum is mechanistic bureaucratic structure . This is a strongly hierarchical form of organizing that is designed to generate a high degree of standardization and control. Mechanistic organizations are often characterized by a highly vertical organizational structure , or a “tall” structure, due to the presence of many levels of management. A mechanistic structure tends to dictate roles and procedure through strong routines and standard operating practices.

In contrast, an organic bureaucratic structure relies on the ability of people to self-organize and make decisions without much direction such that they can adapt quickly to changing circumstances. In an organic organization, it is common to see a horizontal organizational structure , in which many individuals across the whole system are empowered to make organizational decision. An organization with a horizontal structure is also known as a flat organization because it often features only a few levels of organizational hierarchy.

The principles of bureaucracy outlined earlier can be applied in different ways, depending on the context of the organization and the managers’ objectives, to create structures that have features of either mechanistic or organic structures.

For example, the degree of specialization required in an organization depends both on the complexity of the activities the organization needs to account for and on the scale of the organization. A more organic organization may encourage employees to be both specialists and generalists so that they are more aware of opportunities for innovation within a system. A mechanistic organization may emphasize a strong degree of specialization so that essential procedures or practices are carried out with consistency and predictable precision. Thus, an organization’s overall objectives drive how specialization should be viewed. For example, an organization that produces innovation needs to be more organic, while an organization that seeks reliability needs to be more mechanistic.

Similarly, the need for a strong environment of command-and-control varies by the circumstances of each organization. An organization that has a strong command-and-control system usually requires a vertical, tall organizational administrative structure. Organizations that exist in loosely defined or ambiguous environments need to distribute decision-making authority to employees, and thus will often feature a flat organizational structure.

The span of control assigned to any specific manager is commonly used to encourage either mechanistic or organic bureaucracy. Any manager’s ability to attend to responsibilities has limits; indeed, the amount of work anyone can accomplish is finite. A manager in an organic structure usually has a broad span of control, forcing her to rely more on subordinates to make decisions. A manager in a mechanistic structure usually has a narrow span of control so that they can provide more oversight. Thus, increasing span of control for a manager tends to flatten the hierarchy while narrowing span of control tends to reinforce the hierarchy.

Centralization addresses assumptions about how an organization can best achieve efficiencies in its operations. In a mechanistic structure, it is assumed that efficiencies will occur in the system if the resources and decisions flow through in a centralized way. In an organic system, it is assumed that greater efficiencies will be seen by distributing those resources and having the resources sorted by the users of the resources. Either perspective may work, depending on the circumstances.

Finally, managers also have discretion in how tightly they choose to define the formal roles and responsibilities of individuals within an organization. Managers who want to encourage organic bureaucracy will resist the idea of writing out and tightly defining roles and responsibilities. They will encourage and empower employees to self-organize and define for themselves the roles they wish to fill. In contrast, managers who wish to encourage more mechanistic bureaucracy will use tools such as standard operating procedures (SOPs) or written policies to set expectations and exercise clear controls around those expectations for employees.

When a bureaucratic structure works well, an organization achieves an appropriate balance across all of these considerations. Employees specialize in and become highly advanced in their ability to perform specific functions while also attending to broader organizational needs. They receive sufficient guidance from managers to stay aligned with overall organizational goals. The span of control given to any one manager encourages them to provide appropriate oversight while also relying on employees to do their part. The resources and decision-making necessary to accomplish the goals of the organization are efficiently managed. There is an appropriate balance between compliance with formal policy and innovative action.

Business Structures

Aside from the considerations outlined above, organizations will often set structures according to the functional needs of the organization. A functional need refers to a feature of the organization or its environment that is necessary for organizational success. A business structure is designed to address these organizational needs. There are two common examples of functional structures illustrated here.

Product structures exist where the business organizes its employees according to product lines or lines of business. For example, employees in a car company might be organized according to the model of the vehicle that they help to support or produce. Employees in a consulting firm might be organized around a particular kind of practice that they work in or support. Where a functional structure exists, employees become highly attuned to their own line of business or their own product.

Geographic structures exist where organizations are set up to deliver a range of products within a geographic area or region. Here, the business is set up based on a territory or region. Managers of a particular unit oversee all of the operations of the business for that geographical area.

In either functional structure, the manager will oversee all the activities that correspond to that function: marketing, manufacturing, delivery, client support systems, and so forth. In some ways, a functional structure is like a smaller version of the larger organization—a smaller version of the bureaucracy that exists within the larger organization.

One common weakness of a bureaucratic structure is that people can become so focused on their own part of the organization that they fail to understand or connect with broader organizational activities. In the extreme, bureaucracy separates and alienates workers from one another. These problems can occur when different parts of an organization fail to communicate effectively with one another.

Some organizations set up a matrix structure to minimize the potential for these problems. A matrix structure describes an organization that has multiple reporting lines of authority. For example, an employee who specializes in a particular product might have both the functional reporting line and a geographic reporting line. This employee has accountability in both directions. The functional responsibility has to do with her specialty as it correlates with the strategy of the company as a whole. However, her geographic accountability is to the manager who is responsible for the region or part of the organization in which she is currently working. The challenge is that an employee may be accountable to two or more managers, and this can create conflict if those managers are not aligned. The potential benefit, however, is that employees may be more inclined to pay attention to the needs of multiple parts of the business simultaneously.

Concept Check

What is an organizational structure?
What are different types of organizational structures?
What is organizational design?
What concepts should guide decisions about how to design structures?

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The Theory of Informal Organization

First Online: 27 October 2020

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Kazuhito Isomura 2

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Informal organization is defined as the aggregate of human interactions. Informal organizations are created spontaneously everywhere personal contacts and interactions take place. Informal organization is different from formal organization in that informal organization does not have a common purpose; however, it leads to some common results. For example, the major effect of informal organization is to establish an organization culture by creating customs, mores, languages, and so on. Formal and informal organizations are in inseparable and interdependent relationships. Informal organization is the precondition for formal organization; once a formal organization is established, it creates informal organizations within it. Then, the informal organizations vitalize the formal organization and increase the willingness to cooperate through improving cohesiveness and the loyalty of contributors. It is noted that a formal organization works well with the duality of an informal organization. In fact, an informal organization functions at all levels of a formal organization; an informal executive organization is a good example of this.

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Isomura, K. (2020). The Theory of Informal Organization. In: Organization Theory by Chester Barnard. SpringerBriefs in Business. Springer, Singapore. https://doi.org/10.1007/978-981-15-9206-5_5

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7 Formal and Informal Structure of Organization

Published: June 2018
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In this chapter, my aim is describe the links between the formal and informal structure of organizations, and propose a systematic approach to analyzing these links. I first discuss how the two are related and influence each other. Next, revisiting the theme of organizations as “marvels but not miracles” I argue that formal design can be useful even when it not predicated on high levels of comprehension or intelligence. This is because it can compensate for aspects of the informal organization, as well as shape the emergence of the informal organization. I discuss an instance of a micro-structural approach to such issues in some detail, and conclude by offering a multiplex network formulation that can help us make progress in studying the complex interactions between formal and informal organizational structures.

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Formal and Informal Organisations

Table of Contents

Within the realm of organizations, two distinct yet interconnected social structures exist: formal and informal organizations. In this blog, we’ll explore these structures, their characteristics, and their significance in the workplace.

Formal Organization: The Official Blueprint

1. meaning and purpose:.

A formal organization is the official structure of an organization, often depicted in the organizational chart. It outlines the hierarchy, roles, responsibilities, and reporting relationships within the organization. Formal organizations exist to achieve specific goals and objectives efficiently.

2. Characteristics:

Hierarchy: Formal organizations have a clear hierarchy of authority, with individuals holding specific positions and responsibilities.
Defined Roles: Each position in a formal organization has a defined role and set of responsibilities.
Rules and Procedures: Formal organizations have established rules, policies, and procedures that guide behavior and decision making.
Official Communication: Communication within a formal organization follows established channels and protocols.
Objective-Driven: Formal organizations exist to achieve specific objectives, and their activities are purposeful and goal-oriented.

Informal Organization: The Human Network

An informal organization is the social network that emerges within a formal organization. It consists of relationships, interactions, and connections among employees that are not officially sanctioned but play a crucial role in the workplace.

Social Bonds: Informal organizations are characterized by social bonds, friendships, and informal connections that develop among employees.
Grapevine Communication: Information often spreads through the grapevine, informal channels of communication, which may or may not be accurate.
Cultural Norms: Informal organizations often have their own cultural norms and unwritten rules that govern behavior and interactions.
Support System: They provide a support system for employees, fostering a sense of belonging and camaraderie.
Influence: Informal leaders, individuals who hold influence within the informal organization, can play a significant role in shaping opinions and actions.

Significance of Both:

1. complementary roles:.

Formal and informal organizations are not in opposition; they complement each other:

Efficiency: Formal organizations provide structure and efficiency in achieving organizational goals.
Social Fabric: Informal organizations contribute to employee satisfaction, morale, and the exchange of tacit knowledge.

2. Bridging Gaps:

Informal organizations can bridge gaps that may exist within the formal structure:

Communication: They can facilitate communication across hierarchical levels, improving information flow.
Problem Solving: Employees often turn to their informal networks for help in solving work-related challenges.

3. Employee Engagement:

Informal organizations contribute to employee engagement and well-being:

Social Support: They offer emotional and social support, reducing workplace stress.
Collaboration: Informal networks foster collaboration and knowledge sharing among employees.

Balancing Act:

While both formal and informal organizations have their merits, organizations must strike a balance:

Acknowledge Informal Structures: Recognize the existence and importance of informal organizations within the workplace.
Leverage Informal Networks: Use informal networks to enhance communication, collaboration, and innovation.
Align with Formal Goals: Ensure that informal activities align with the organization’s formal objectives and values.

Conclusion:

Formal and informal organizations coexist in the workplace, each playing a vital role in achieving organizational goals and nurturing the social fabric of work. Acknowledging and leveraging both structures can lead to a harmonious and productive work environment.

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Management Functions and Organisational Processes

1 Management: An Overview

Meaning and Definition of Management
Nature of Management
Characteristics of Management
Administration and Management
The Importance of Management
Functions of Management
Challenges of Management

2 Management and its Evolution

Perspectives of Management

3 Roles of Managers

Management process
Managerial roles
Management skills
Management levels
Characteristics of a good manager
How do managers know whether they are good or not?
Changing role of a manager in the current context
The Changing role of a manager – Perspective from managers
Meaning of Planning
Nature of planning
Steps of the planning function
Why planning is necessary
Types of planning

5 Organising

The concept of organizing and analyzing work
Different approaches to organizing and analyzing work
Work improvement and measurement
Time and motion study
Workspace and architectural ergonomics
Impact of information technology on organising work

6 Staffing and Directing

Characteristics of staffing
Training and Development

7 Controlling

Meaning of Control
Importance of Control
Features of Control
The Control process
Essentials of a good control system
Types of control
Techniques of Control

8 Leading and Motivating

Leadership Styles
Leadership Theories
Modern Theories of Leadership
Successful Vs. Effective Leader
Motivation: Meaning and Definition
Motivating Factors
Importance of Motivation
Motivating Steps
Types of Motivation
Theories of Motivation

9 Decision Making

Three Phases in Decision Making Process
Types of Managerial Decisions
Decision Making under Different States of Nature
Models of Decision Making Process
Techniques Used in Different Steps of Decision Making
Individual Versus Group Decision Making
Overcoming Barriers to Effective Decision Making

10 Organisation Structure and Design

Organisation Structure and Chart
Factors Influencing the Choice of Structure
Degree of Decentralisation
Line and Staff Relationships
Specialisation of Work
Span of Control and Levels of Management
Differentiation of Tasks and Activities within an Organisation
Matrix Structure
Network Structure
Integration of Organisational Tasks and Activities
Designing Structure for a Service Organisation

11 Organisation Communication Processes

Communication: Meaning and Purpose
Importance of Communication
Communication Process
Verbal and Non-verbal Communication
Channels of Communication
Barriers to Communication
Making Communication Effective

12 Organisational Culture

Concept of Organisational Culture
Key Terms Used
Meaning of Organisational Culture
Role of Culture
Developing Organisational Culture
Types of Organisational Culture
Traits of a great Organizational Culture
Towards building a sustainable organizational culture
Culture by choice V/s Culture by chance
Creation of Ethical Culture
Changing Organisational Culture
Spirituality and Organisational Culture

13 Managing Change

The concept of change
The key drivers of change
Nature of change
Process of change
Models of change
Resistance to change
Strategies to overcome resistance
Forms of Organizational Change
Evaluation of Change
Role of Change Agent
Organization Development (OD)
OD Interventions

14 Corporate Social Responsibility and Ethics

Meaning and Evolution of CSR
Evolution of CSR Legislation in India
Benefits and Drivers of CSR
Ethics in the Context of CSR
Ethical Views or Theories
Case Study: Tata Motors Limited and CSR

Key Differences

Know the Differences & Comparisons

Difference Between Formal and Informal Organization

On the other end, there is an informal organisation which is formed under the formal organisation as a system of social relationship, which comes into existence when people in an organisation, meet, interact and associate with each other. In this article excerpt, we are going to discuss the major differences between formal and informal organisation.

Content: Formal Organization Vs Informal Organization

Comparison chart, definition of formal organization.

By the term formal organisation, we mean a structure that comes into existence when two or more people come together for a common purpose, and there is a legal & formal relationship between them. The formation of such an organisation is deliberate by the top level management. The organisation has its own set of rules, regulations, and policies expressed in writing.

The basic objective of the establishment of an organisation is the attainment of the organisation’s goal. For this purpose, work is assigned, and authorities are delegated to each member and the concept of division of labour and specialisation of workers are applied and so the work is assigned on the basis of their capabilities. The job of each is fixed, and roles, responsibilities, authority and accountability associated with the job is clearly defined.

In addition to this, there exists a hierarchical structure, which determines a logical authority relationship and follows a chain of command. The communication between two members is only through planned channels.

Types of formal organization structure

Line Organization
Line and Staff Organization
Functional Organization
Project Management Organization
Matrix Organization

Definition of Informal Organization

An informal organisation is formed within the formal organisation; that is a system of interpersonal relationships between individuals working in an enterprise, that forms as a result of people meet, interact and associate with one another. The organisation is created by the members spontaneously, i.e. created out of socio-psychological needs and urge of people to talk. The organisation is featured by mutual aid, cooperation, and companionship among members.

In an informal organisation, there are no defined channels of communication, and so members can interact with other members freely. They work together in their individual capacities and not professional.

There is no defined set of rules and regulations that govern the relationship between members. Instead, it is a set of social norms, connections, and interaction. The organisation is personal i.e. no rules and regulations are imposed on them, their opinions, feelings, and views are given respect. However, it is temporary in nature, and it does not last long.

Key Differences Between Formal and Informal Organization

The difference between formal and informal organisation can be drawn clearly on the following grounds:

Formal Organization is an organisation in which job of each member is clearly defined, whose authority, responsibility and accountability are fixed. Informal Organization is formed within the formal organisation as a network of interpersonal relationship when people interact with each other.
Formal organisation is created deliberately by top management. Conversely, informal organisation is formed spontaneously by members.
Formal organisation is aimed at fulfilling organisation’s objectives. As opposed to an informal organisation is created to satisfy their social and psychological needs.
Formal organisation is permanent in nature; it continues for a long time. On the other hand, informal organisation is temporary in nature.
The formal organisation follows official communication, i.e. the channels of communication are pre-defined. Unlike informal organisation, the communication flows in any direction.
In the formal organisation, the rules and regulations are supposed to be followed by every member. In contrast to informal communication, there are norms, values, and beliefs, that work as a control mechanism.
In the formal organisation, the focus is on the performance of work while in the case of an informal organisation, interpersonal communication is given more emphasis.
The size of a formal organisation keeps on increasing, whereas the size of the informal organisation is small.
In a formal organisation, all the members are bound by the hierarchical structure, but all the members of an informal organisation are equal.

An informal organisation is just opposite of a formal organisation. The principal difference between these two is that all the members of a formal organisation follow a chain of command, which is not in the case of an informal organisation. Moreover, there exists a superior-subordinate relationship (status relationship) in the former, whereas such relationship is absent in the latter because all the members are equal (role relationship).

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Informal Social Networks in Organizations Essay (Critical Writing)

Article summary, learning points, critical analysis, practical implications, works cited.

This article focuses on the informal networks that relate to the functionality of any organization. The article is jointly authored by two management experts and it seeks to identify the various parts of an informal network. According to the authors, the key figures in an informal network include central connectors, boundary spanners, information brokers, and peripheral specialists (Cross and Prusak 104). Each of these individuals plays an important part in an organization’s informal network, and executives must recognize them. Having an idea of the informal social-network maps that influence businesses makes it possible for senior managers to make important decisions. This essay is a critical analysis of the article on informal social networks that drive an organization.

This article forwards several important theories in regards to management and informal social networks. First, the authors reiterate the role of the central connector in an informal network. According to the authors, it is easy to ignore and overlook the role of the central connector but this ‘go-to-person’ makes immense contributions to an organization. The boundary spanner is the person who provides a link between various small informal networks. The boundary spanner is almost similar to an information broker, but his/her role relies more on active connections. On the other hand, an information broker is often strategically placed. The authors also take note of the silent and crucial peripheral specialists who act as experts in an organization.

The authors of this article paint a vivid picture of the informal networks that are important to an organization. It is important to note that these informal networks are punctuated by various personalities. Before reading this article, I was not familiar with the ‘invisible’ networking roles that are present within an organization. For instance, the role of the central connector usually features an individual who ‘can get things’.

Consequently, senior executives and junior employees often rely on central connectors on various occasions. Using the analogy that is outlined by the authors of this article, in a typical office setting a central connector would be the person who is regularly interrupted. The interruptions would be characterized by senior executives seeking the connector’s assistance in resolving scenarios and junior employees seeking important contacts from the connector.

The authors of this article do not dwell on the complications that accompany the institution of the central connector. The role of the central connector is complicated by the fact that these individuals can appear to be less productive than the other employees. It is hard to measure the efforts of a connector using the standard performance indicators. Consequently, some central connectors can appear as non-performers when they are compared to their fellow employees.

Another pertinent issue that is raised by the authors concerns the role of the peripheral specialists. According to the article, a peripheral specialist is a virtual outsider whose input to the organization can threaten the institution of the executive. The article notes that peripheral specialists lack interest in the informal networks that dominate an organization. Consequently, executives who lack the understanding of the peripheral specialists often collide with these individuals. This revelation is quite important especially in an age where individual expertise and exceptional talents are in high demand.

Nowadays organizations are making strenuous efforts to attract and retain exceptional talent in their organizations. Therefore, peripheral specialists who were traditionally considered to be ‘unemployable’ are vital components of modern organizations. It is up to organizations to identify their peripheral specialists and utilize them accordingly.

The authors of this article overstated the role of logical social network analysis. In my view, a social network is mostly an arbitrary by-product of any good management. Even though it is important to note the vital components of an informal network, dwelling too much on its specifics can be counter-productive. For example, it would be a great mistake to identify and single out the central connector in any organization. When other employees realize the overstated role of a central connector, they might neglect their networking efforts and thereby rely on the identified personality. On the other hand, a central connector might feel the pressure of being the pillar of an informal network and thereby take to pre-emptying personal connections. Overall, informal networks are supposed to happen naturally and they should not be implementable points of action.

The assertions that have been made in this article can be implemented in various managerial roles. For instance, a manager’s post can be defined using the analogy of a boundary spanner. A boundary spanner is important to an organization because he/she has expansive insights into various informal networks. On the other hand, an organization can enrich the role of a boundary spanner by constantly transferring such an individual from one post to another. Every organization should have a manager who can traverse all the organization’s boundaries (Robbins and Judge 67). Consequently, a boundary spanner can have a harmonizing effect on an organization because ideas can travel through him/her. The authors of this article also do a great job of explaining their assertions using basic language and examples.

Cross, Rob, and Laurence Prusak. “The people who make organizations go-or stop.” Harvard Business Review 80.6 (2002): 104-112. Print.

Robbins, Stephen P., and Timothy Judge. Organisational behavior , Sydney, Australia: Pearson Higher Education, 2013. Print.

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1. IvyPanda . "Informal Social Networks in Organizations." March 30, 2021. https://ivypanda.com/essays/informal-social-networks-in-organizations/.

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Formal and informal organization of work: Formal Structure

Relevance: sociology: works and economic life: formal and informal organization of work..

Formal structure of an organization or group includes a fixed set of rules for intra-organization procedures and structures.

What are Formal Organizations?

The formal structure of a group or organization includes a fixed set of rules of procedures and structures, usually set out in writing, with a language of rules that ostensibly leave little discretion for interpretation. In some societies and organizations, such rules may be strictly followed; in others, they may be little more than an empty formalism.

Characteristics of Formal Organization

A formal organization has its own set of distinct characteristics. These include well-defined rules and regulation, an organizational structure, and determined objectives and policies, among other characteristics.

Moving from informal to formal sector: Sociological Perspective | TriumphIAS

Distinction from Informal Organization

Formal rules are often adapted to subjective interests giving the practical everyday life of an organization more informality. Practical experience shows no organization is ever completely rule-bound: all real organizations represent some mix of formal and informal characteristics. When attempting to create a formal structure for an organization, it is necessary to recognize informal organization in order to create workable structures. Tended effectively, the informal organization complements the more explicit structures, plans, and processes of the formal organization. Informal organization can accelerate and enhance responses to unanticipated events, foster innovation, enable people to solve problems that require collaboration across boundaries, and create paths where the formal organization may someday need to pave a way.

Formal and informal organizational structure

Informal Structure

The informal organization is the aggregate of behaviors, interactions, norms, and personal/professional connections.

What is Informal Organization?

The informal organization is the interlocking social structure that governs how people work together in practice. It is the aggregate of behaviors, interactions, norms, and personal/professional connections through which work gets done and relationships are built among people. It consists of a dynamic set of personal relationships, social networks, communities of common interest, and emotional sources of motivation. The informal organization evolves organically in response to changes in the work environment, the flux of people through its porous boundaries, and the complex social dynamics of its members.

O RGANIZATION F UNCTION. C ONCEPTS OR INTRODUCTION The term organization used in many ways…. “ In English speaking countries, a particularly in the USA, - ppt download

Key Characteristics of Informal Organizations

The nature of the informal organization becomes more distinct when its key characteristics are juxtaposed with those of the formal organization. The informal organization is characterized by constant evolution; grass roots; being dynamic and responsive; requiring insider knowledge to be seen; treating people as individuals; being flat and fluid; being cohered by trust and reciprocity; and being difficult to pin down.

Functions of Informal Organizations

Keith Davis suggests that informal groups serve at least four major functions within the formal organizational structure.

First, they perpetuate the cultural and social values that the group holds dear. Certain values are usually already commonly held among informal group members. Day-to-day interaction reinforces these values that perpetuate a particular lifestyle and preserve group unity and integrity. For example, a college management class of 50 students may contain several informal groups that constitute the informal organization within the formal structure of the class.

Second, they provide social status and satisfaction that may not be obtained from the formal organization. In a large organization, a worker may feel like an anonymous number rather than a unique individual. Members of informal groups share jokes and gripes, eat together, play and work together, and are friends—contributing to personal esteem, satisfaction, and a feeling of worth.

Third, the informal group develops a communication channel to keep its members informed about what management actions will affect them in various ways. Many astute managers use the grapevine to “informally” convey certain information about company actions and rumors.

Finally, they provide social control by influencing and regulating behavior inside and outside the group. Internal control persuades members of the group to conform to its lifestyle. For example, if a student starts to wear a coat and tie to class, informal group members may convince the student that such attire is not acceptable and therefore to return to sandals, jeans, and T-shirts.

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Formal and Informal Organization Structures, Research Paper Example

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A formal organization consists of a fixed set of rules that govern the procedures and the structure of an organization. The rules put in writing, and strictly followed. The design work is through a formal planning an organization chart and job description. There exist a strict organizational structure, in the chain of command and authority. Conveyance of message done through a set scale of the chain, where one passes a message to the immediate supervisor. The organization sets goals, objectives, and policies to achieve after a specified period (Gächter & Falk 2000). All members of the formal organ interrelate in terms of reference, and these types of organizations establish and remain unchanged for a long period.

An informal organization structure, on the other hand, is one without formal planning. The relationship between members is natural. There is daily contact, emotional blend, fun, and close contact between members. While the two types of organization structures may appear parallel, they intersect and co-exist in a unit or an organization. Occasions arise in an organization, where the informal organization needs employment for success and gain of some unexpected benefit (Lazzarini et al, 2001, p.75).

Informal organization helps in meeting the psychological needs of members, enhances the morale of members, and creates exceptional interpersonal environment that promotes the stability of the formal organization. However, if too much employed, the informal organization would adversely affect the organization’s activities.

In conclusion, it is right to say that formal and the informal organization can coexist within the same organizational structure. This is because the two types of structures complement each other in an organization. The Informal structure helps workers relate and work together to reach and attain the set goals and objectives of the formal structure (Lazzarini et al, 2001, p.120).

Gächter, S., & Falk, A. (2000). Work motivation, institutions, and performance, Working paper , Institute for Empirical Research in Economics, University of Zurich.

Lazzarini, S. G., Miller, G. J., & Zenger, T. R. (2001). Order with a little bit of law: complementarity vs. substitution between formal and informal arrangements, Working paper, Olin School of Business, Washington University.

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Public Administration: Formal and Informal Organizations

McGregor’s Theory X and Theory Y had been the cornerstone of organizational theories at one time. Theory X believes that the workforce is innately lazy and unwilling to do work. Therefore, management needs to goad, persuade, discipline and even, coerce them to work – the carrot and stick policy needs to be very much in vogue that could reward hardworking and sincere workmen and punish unwilling, or insincere workers.

On the other hand, Theory Y believes that all members of the workforce are willing and cooperative workers. They wish to earn an honest living through their efforts and dedicated service but need to be trained and motivated by management to work according to the needs of the organization. Theory Y believes that there is nothing fundamentally wrong with the workforce, their perceptions need to be brought in line with that of management and they need to be explained about the importance of their work and how it impacts the total work environment.

Thus, in early organizational theories, the aspect of human nature and behavior was preponderant since the workforce was more militant and aggressive and would not obey orders directly. Thus, the need for coercion and threats became necessary, which exasperated tense situations, resulting in drifts in management-employee relations. However, it would not be judicious to present organizational theories only in terms of McGregor’s Theories of X and Y.

Frederick Winslow Taylor enunciated Taylor’s principle, which principally aimed at standardizing and simplifying jobs so that each worker was responsible for a certain segment of work, which he needed to perform to the best of his abilities. Thus, Taylorism was meant to increase efficiencies while reducing costs and efforts. The aspect of “time and motion study” was also an adjunct of scientific management propounded by Taylor and has been the edifice of modern management throughout the industrial world. (Crowther & Green, 2004, p.10).

The fact that we have learned from research on human behavior is that the motivation angle that is so strongly encased in these theories – monetary and non-monetary benefits, etc. have gone a sea change. Maslow’s 5 need pyramid delineates the physiological, safety, social, esteem, and self-actualization needs. He believes that once one stage has been crossed, the people go for the next, and so on. However, in recent times, this pyramid has been under challenge because, in certain cultures, certain values take precedence over others. “Additionally, little evidence suggests that people satisfy exclusively one motivating need at a time, other than situations where needs conflict.” (Maslow’s theory of motivation- Hierarchy of needs, 2009, Limitations and Criticism, para.1).

Thus, over some time, organizational hierarchies and importance may change. While at one time, productivity had been a key factor, nowadays it is an information technology and its usage that has gained center stage. The entire organizational skyline seems to have changed, and greater emphasis is now on managing systems rather than personnel. Thus, organizations need to take stock of their needs and reinvent themselves to play a major role in achieving efficiencies, both within and outside the organization.

Formal organizations are hierarchy-bound rigid structures powered by a regulatory mechanism that exists in organizations. However, informal organizations are sub-groups that are created informally through interaction among personnel and activities and do not have any regulatory boundaries or predefined parameters, as such. Though not formally recognized, they could at times be powerful mouthpieces for the staff, or workforce that needs to be heeded by management. Racial or gender cliques, for instance, are examples of informal organizations within the formal organization as may be formed by management, labor, certain segments of the workforce, etc. The main functions of formal organizations are to pursue management policies and work towards achieving the aims and objectives of the firm. They are officially recognized and enforceable levels of accountability and responsibility flowing downwards from the highest echelon – the board of directors. Adherence and membership informal organizations are mandatory and they continue, albeit with changes through the lifetime of the organization, in one form or the other. Informal organizations thrive on formal ones, and to a large extent are nourished by them. Since membership in informal organizations is not compulsory, it normally has more temporary memberships arising out of needs. The life span of informal organizations depends upon the work to be completed and shall cease to exist once the work is over. Informal organizations strive to serve group interests and /or individual interests of their members. “These personal statuses, relationships, network, and organizational ties may also be a disadvantage in the informal organization as it may mean that an individual is excluded from the informal organization due to differing beliefs than the rest of the informal organization members.” (Formal and informal organizations, 2009, para.2).

The main idea of formal organizations is to increase the profitability of the business while that of informal ones is to protect the interests and welfare of their members. Formal organizations are permanent while informal ones cease to operate once their objectives have been served. There are possibilities that informal organizations could develop norms or values that conflict with formal values. This could be when there are conflicts of interests or erosion of understanding between formal and informal structures. The fundamental values of the organization’s formal system or structure are to increase shareholder value and meet the goals and objectives of the business, even by using informal methods whenever needed. But sometimes, the informal means may not concur with the formal. For instance, trade unions may refuse to accept lesser salary revision or may insist upon reinstatement of a suspended workman. In all such cases, there are instances when the hierarchical and bureaucratic formal system may not see Eye-to-eye with informal groups and there are chances of misunderstandings and areas of conflict. However, these issues could be resolved through mediation, or dialogues, among the feuding parties to their mutual satisfaction. It is often seen that “The formal systems alone are not able to satisfy the enormous information needs necessary to coordinate such a complex configuration.“ (Managing people in organizations, 2009, para.5).

Under such circumstances, the roles of management also change conspicuously and management would be wrong not to differentiate between the existence of various cultures and sub-cultures. “Often the shared understanding of the role of management becomes an instrument of integration that is more powerful than formal structures and systems.” (Managing people in organizations, 2009, para.5).

The two stages of the policymaking process that are being taken up are first, regarding the identification of the issue, and, secondly, implementation of the policies. The identification of the issues needs to be in terms of what the problem is and what its impacts are in material terms.

Policies need to be distinguished from laws in the sense that they are not mandatory and enforceable and guide action towards those that provide the maximum response to goals. In more senses than one, policies could guide serve as tools that show the right way for public policies. Moreover, it is also seen that policies are normally initiated and approved to avoid negative or detrimental action and enforce positive ones. This could also be in terms of initiating right action to correct wrong or to channelize action in its proper path. The implementation of the policy is done after a lot of deliberations and debates with all concerned officials and authorities, including the public also, who have a major say in the carrying out of policies in a democratic framework of the country. During the implementation part, it is necessary to work out a plausible and realistic model by which the policies could be implemented. It is, however, necessary to follow a planned procedure for the implementation of the policy, including the purpose statement, which delineates the need for the policy issuances and its prime objectives.

The next statement would be in terms of applicability and scope statement that takes into account the inclusion or exclusion of people from the requirements. Next, it would need to cover the date on which it should come into effect. The next aspect would be the body or individuals who would be responsible for the implementation of the policies. Next, it is also necessary that clear-cut directions need to be given regarding how these are to be implemented.

The administrative agency which would be responsible for the identification of commercial policies would be the United States Department of Commerce. This is a federal agency that is responsible for developing standards, benchmarks, validation programs to publish standards and general laws and to increase IT planning, implementation, and management operations. The Department of Commerce may be a viable agency for the identification of various issues that need to be communicated to the government.

Next, coming to the implementation of policies, the Director of National Intelligence acts as the head of the Intelligence services. The aspects of national security of which the President, NSC, and Homeland Security Council are principal incumbents, are advised by the DNI. It also undertakes the responsibility of overseeing and enforcing of National Intelligence Program. “The DNI coordinates intelligence matters related to the Department of Defense (DoD) with the Under Secretary of Defense for Intelligence – the USD (I). This individual serves as the Principal Staff Assistant and advisor to the Secretary of Defense and the Deputy Secretary of Defense on all intelligence, counterintelligence and security, and other intelligence-related matters. The USD (I) provides oversight and policy guidance for all DOD intelligence activities. “ (Members of the intelligence community (IC), n.d., para.3).

The budget process is called a political process since the influence of political powers is found in these exercises. In the USA, there are primarily two parties, Republicans and Democrats and they try to win over the largest number of voters and try to nominate their candidates to fight and win Presidential elections in the country. Besides, there are also other kinds of pressure groups that try to influence budget processes for protecting, or furthering their vested interests. For instance, owners of business corporations would try to lobby for the lower incidence of corporate taxes or restrictions on the right of workmen to resort to strikes. Similarly, trade union leaders would advocate enforcement of minimum wages or working hours aimed at strengthening the collective bargaining system. The efforts of various political pressure groups within the country and outside it would seek to protect and promote their vested interests, especially in matters of subsidies, taxation rates, tax exemptions, and other financial benefits and concessions that are announced during the budget process. These are the reasons why the budget process is called the political process.

The Program Planning Budgeting System (PPBS) and performance budgeting help in rationalizing the budget process in a limited way. The PPBS is a kind of planning-centered and specific kind of budget preparation that takes into account the programs that are chalked out and the funds that would be necessary to meet them. In a sense, PPBS is a cross between the traditional kinds of subjective budgets based on proposals on the one hand and performance budgets on the other. The main aspect of PPBS and performance budgeting is that of the planning process, the drawing up of specific proposals to meet budget requirements and precise budgets, and explicit multi-year plans. The main objective behind PPBS, initiated in 1965, was to ensure a better affiliation between objectives and goals, programs, and activities. Various kinds of activities were merged into multi-year programs, appraised, and compared over the years. During the budgetary stage, the programs are transferred to annual budgets for implementation. These rational approaches to budgeting have been so difficult to implement effectively in the American government because of the bureaucratic nature of American financial systems. Demarcation of accountability and responsibility is yet another area in which the budgetary exercises could not be strictly enforced, and this led to many internal conflicts and squabbles. Besides, given the kind of budget deficits that are in vogue in Government accounting, it would be perhaps illusionary to produce and implement a perfectly well-balanced list of objectives and pursue it in right earnest. The lacunae in the present systems did not perhaps allow sound accounting systems and budgets to be enforced, which have led to the failures of much innovative and development-oriented budget planning. Besides, the degree of consistency and enforceability that are key elements of any budget exercise has been conspicuous in its absence in the case of both PPBS and only to a limited extent in the case of performance budgeting. These could be some of the reasons why these rational budgetary planning failed to take off.

The salient differences between social regulation and economic regulation lie very much in the objectives they seek to fulfill. The former is aimed at restricting conduct that could pose a threat to public health and safety, welfare, and well-being of citizens. It could be in terms of alleviating the risks of pollution to the environment, unsafe or unhygienic working, or living conditions, and social segregation. Economic segregation, on the other hand, is meant to ensure competitiveness in the marketing of goods, services, and utilities and the avoidance of harm to consumers through aggressive and profit-oriented marketing efforts on the part of unscrupulous manufacturers and traders. How externalities could be used to support the argument for regulation could be that externalities may be capable of causing benefits or detriments to society in general, or individuals in particular. A manufacturer that produces industrial products also pollutes the neighboring areas through effluents, smoke, etc. This is a case of detrimental externality. Since the economic value gained through manufacturing is higher than the losses caused by pollution, regulatory measures cannot stop such manufacture. When a house owner uses coatings of fireproof materials in his house, he is, in a way, protecting the neighborhood also in terms of externality, since chances of a fire emanating from his home are considerably reduced. The occurrences of fire, pollution, chances of an industrial accident or mishaps are also externalities that need to be predetermined and guarded against. However, there is another factor that needs to be kept in mind. External benefits may accrue, without the knowledge of people. For instance, if a person cleans and beautifies his garden properly, it may increase the value of property in the neighborhood, but this fact may not be known by all. Similarly, the fact that one business is stocking dangerous chemicals in its godown in an open and unprotected manner, gives rise to risks of accidents, which is an external danger that may not be known by others. Thus, regulatory measures are needed to be enforced for known, as well as unknown sources of risks and dangers. Coming to the next part of the question, it is believed that too much regulation in terms of direct interference by the Government in economic and individual matters could spell discouragement and disincentive to invest. Similarly, too little interference could be seen in terms of the lowered degree of controls that could cause disaster for the economy. Therefore, a balanced approach needs to be taken, wherein both the detriment of high or low regulatory measures and the benefits of the same could be gained. In critical areas of public administration and governance, like education, finance, defense, health care, and consumer protection, an overdose of regulation would not do any harm, whereas not so critical items could even do well with a lesser degree of controls and regulatory measures.

Reference List

Crowther, D., & Green, M. (2004). Organizational theory . CIPD Publishing.

Formal and informal organizations . (2009). Mega Essays.com. 2009. Web.

Managing people in organizations . (2009). Lots of Essays.com. 2009. Web.

Maslow’s theory of motivation- Hierarchy of needs: Maslow’s theory-Limitations and criticism . (2009). Envision Software, Incorporated. 2009. Web.

Members of the intelligence community (IC) . (n.d.). Information, Intelligence. 2009. Web.

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Formal and Informal Communication in Organization

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Formal and Informal Communication in Organization Essay

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Biden Administration Advances $1 Billion Arms Sale to Israel

The notification of the deal to Congress even as the president holds up the delivery of other weapons shows the fine line the administration is trying to walk with its longtime ally.

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A tank moving over open ground, with a city skyline in the background.

By Robert Jimison

The Biden administration has told Congress that it intends to move forward with a plan for the United States to sell more than $1 billion in new weapons to Israel, according to three congressional aides familiar with the deal.

The notification of the sale, which would include new tactical vehicles and ammunition, comes as President Biden has withheld a shipment of bombs to Israel, hoping to prevent U.S.-made weapons from being used in a potential invasion of the southern Gaza city of Rafah. Last week, Mr. Biden said he would block the delivery of weapons such as bombs and missiles that could be fired into the densely populated area where more than a million Palestinians are sheltering.

The potential arms transfer illustrated the narrow path the Biden administration is walking with Israel, trying to prevent an assault on Rafah and limit civilian casualties in Gaza but continuing to supply a longtime ally that the president has said has a right to defend itself. One congressional aide said Congress had been aware of the arms deal for months, and suggested that the administration had simply waited for a foreign aid package with more aid for Israel to pass before moving forward with the required congressional notification process.

When asked about the package, which was reported earlier by The Wall Street Journal , the State Department referred to recent comments from Jake Sullivan, the White House national security adviser, citing a continued commitment to supply Israel with military assistance to defend itself from threats in the region.

“The president was clear he would not supply certain offensive weapons for such an operation, were it to occur,” Mr. Sullivan said. “It has not yet occurred. And we are still working with Israel on a better way to ensure the defeat of Hamas everywhere in Gaza, including in Rafah.”

The administration has been pushing for a cease-fire deal in which Hamas would release at least some of the hostages it took on Oct. 7, when it attacked Israel and began the war. But the prime minister of Qatar, a key player in the talks, said on Tuesday that they were at “almost a stalemate.”

Mr. Biden initially embraced Israel after the Oct. 7 attack, which killed an estimated 1,200 people, but has increasingly found himself at odds with its conduct of the war, which has killed more than 34,000 people in Gaza, according to the health authorities there.

Still, even as he issued his threat to withhold additional weapons last week, he made clear that the United States would supply arms to ensure its ally’s security, including for its Iron Dome missile defense system and for its “ability to respond to attacks” like the one Iran launched in April .

The State Department’s informal notification of the arms transfer to the required congressional committees begins a multistep process for top foreign affairs lawmakers to informally consider the terms of the weapons transfer and deliberate with the department in private. Congress as a whole will then consider the package.

Edward Wong contributed reporting.

Our Coverage of the Israel-Hamas War

News and Analysis

The United Nations’ top court is scheduled to hear arguments from South Africa after the country recently requested that the court issue further constraints on Israel, saying “the very survival” of Palestinians in Gaza was under threat.

Secretary of State Antony Blinken warned that recent gains in getting desperately needed humanitarian aid to people in the Gaza Strip risked being undone by the fighting in southern Gaza.

The Biden administration has told Congress that it intends to move forward with a plan for the United States to sell more than $1 billion in new weapons to Israel .

PEN America’s Boiling Point: As it cancels events amid criticism of its response to the Israel-Hamas war, PEN America faces questions about when an organization devoted to free speech for all should take sides.

A Key Weapon: When President Biden threatened to pause some weapons shipments to Israel if it invaded Rafah, the devastating effects of the 2,000-pound Mark 84 bomb were of particular concern to him.

A Presidential Move: Ronald Reagan also used the power of American arms to influence Israeli war policy. The comparison underscores how much the politics of Israel have changed in the United States since the 1980s.

Netanyahu’s Concerns: Prime Minister Benjamin Netanyahu of Israel, under pressure from all sides, is trying to reassure his many domestic, military and diplomatic critics. Here’s a look at what he is confronting .

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Informal organization
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What is an informal organization?

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Example of Informal Organization

Features of Informal Organization

Difference Between A Formal and Informal Organization

Functions of Informal Organization

Importance of Informal Organization

Disadvantages

FAQs on Informal Organization

Informal Organization

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Features of Informal Organization

Functions of Informal Organization

Merits of Informal Organization

Demerits of Informal Organization

Control of Informal Organizations

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10.1 Organizational Structures and Design

Types of Formal Organizational Structures

Bureaucracy

Specialization

Command-and-Control

Span of Control

Centralization

Formalization

Mechanistic and Organic Structures

Business Structures

Concept Check

The Theory of Informal Organization

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7 Formal and Informal Structure of Organization

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Formal Organization: The Official Blueprint

2. Characteristics:

Informal Organization: The Human Network

Significance of Both:

2. Bridging Gaps:

3. Employee Engagement:

Balancing Act:

Conclusion:

Management Functions and Organisational Processes

Difference Between Formal and Informal Organization

Content: Formal Organization Vs Informal Organization

Definition of Informal Organization

Key Differences Between Formal and Informal Organization

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