Formal organisation It is a system of well-defined jobs, each bearing a definite measure of authority, accountability and responsibility.
Informal organisation It is a network of social and personal relationships, which originates spontaneously as a result of interaction amongst people at work
Advantages and disadvantages of informal organisation :
Informal organisation has the following advantages :
(i) Prescribed lines of communication are not followed. Thus, it facilitates quick feedback and spreads information faster.
(ii) It provides a sense of belongingness and gives due respect to social and psychological needs.
(iii) It provides the necessary environment for individual creativity and innovation.
(iv) It contributes to fulfilment of goals, promoting the feeling of cooperation among employees.
Informal organisation has the following disadvantages :
(i) Informal organisation structure spreads rumours.
(ii) It opposes the policies and changes of management.
(iii) It generally prefers status quo and existing work routine.
(iv) It gives importance to individual interest as compared to organisational interest.
(v) It pressurises members to conform to group expectations.