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Formal and informal organization

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1. Explain the interrelationship between formal & informal organization. This question requires the discussion interrelationship between formal organization and informal organization. First we want to know about what the formal organization is and what the informal organization is. Formal organization is a fixed set of rules of intra-organization procedures and structures. As such, it is usually set out in writing; with a language of rules that ostensibly leave little discretion for interpretation also the informal organization is the interlocking social structure that governs how people work together in practice. It is the aggregate of, norms, personal and professional connections through which work gets done and relationships are built among people who share a common organizational affiliation or cluster of affiliations. The formal and informal organizations are inter-related. They are not mutually exclusive.

There exist many informal organizations simultaneously with the formal organizations. A single formal organization like the state, the university, the industry, the church, may consist of several informal organizations in the form of gangs, friendship groups’ etc. The line separating formal and informal organization is not always clear. Any formal organization functions best when the informal organization supports it. The most orderly and efficient structure does not automatically produce a successful organizational administration if the members have no goodwill towards one another and have only personal hostilities. On the contrary, the best goodwill in the world will be insufficient for the successful pursuit of an organizational activity if the formal organization is deficient.

The most efficient and satisfactory organization is the one in which formal organization is supported the informal organization. The relationship between the formal and informal organizations is always subtle always complicated and always interesting. According to the document of “formal and informal need each other “, the continuous interaction and association among the members of formal organization result in the emergence of informal structure of roles and relationships. We call such informal structure consisting of primary group relations, friendships and cliques, ties of mutual obligations of aid and assistance.

2. What are the conditions a manager should ensure to handle the informal structures in the organization? There are many conditions a manager should ensure to handle the informal structures in the organization, few of them are explained below. Managers should identify the people in the informal structures in the organization (who are key to the information flow) and feed them information that they can spread to others. Thus, the managers may be able to prevent or at least minimize the wastage of important time and put this time to better use, for instance, in a way which it could benefit the organization. Also, managers should make sure that the social needs of the people associated in the informal structures in the organization are met and support them in order to prevent conflicts or disputes occurring in the organization.

Due to this, the informal organization may cooperate with the managers and support them in working towards achieving the overall objectives and goals of the organization. Furthermore, managers should ensure that the people involved in the informal structures of the organization are focused on the overall objectives and goals of the organization because it is believed that the informal structures never contribute directly to organizational goals and objectives, unnecessary interaction among workers may also result in delayed operations. Managers may be done this by being a part of the informal structures of the organization so that he or she could remind the other members of the group regarding the overall goals and objectives of the organization. Overall, by ensuring these particular conditions explained above, managers may be able to contribute to their organization by increasing the overall efficiency of their business and also enabling the organization to achieve its goals and objectives in the long-run more easily than before.

3. “Such informal conversations and the unofficial groups that grow out of them are actually the secret to organizational success.” Elaborate your idea specific to the particular organizations given in the document.

“Everybody knows there’s an informal organization out there”, says Katzenbach, senior vice precident of Booz and Company. “We get differences, though, in terms of whether that’s good or bad. The informal organization is more emotional. It’s what goes on in the hallways and behind closed doors, including relationships that connect people in ways that aren’t possible in the formal organization. The informal organization encompasses elements such as worker’s personal values, informal networks they develop, communities of common interest, pride building connections and peer to peer interaction. The tension between formal and informal organizations is becoming more critical as the workplace shifts toward collaboration, relationship building and cross functional or global communication behaviors that rely heavily on informality. Associations which focus on connecting people and sharing knowledge can especially benefit from balancing the formal and informal because of the tremendous motivational force of the informal organization.

Companies that grow fast know well the struggles of balancing the informal and the formal. There are perhaps, no better examples of rapid growth than Starbucks. The company exploded from 100 employees to over 100,000. Howard Schultz, the company’s CEO and current chairman, has done an excellent job of building and fostering the informal organization. We can understand, we can’t grow if we’ve got to achive a fragile balance between the two sides of the corporate brain. Starbucks’ employees are famously loyal. It is also a sound business decision. EBay is another example where the balance has been notoriously successful. EBay maintains a light touch in monitoring and enforcing ethical behaviours in its customers the entire enterprise relies on transparency and collective trust in good intentions. Company doesn’t need to be growing as fast as Starbucks or have as large a community of customers as eBay does to strike the right balance. Companies of all sizes and shapes need to know when to take advantage of the informal and formal. They need to be flexible enough to know when to prioritize one over the other.

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