Informal Organization - The Informal Organization and The Formal Organization

The Informal Organization and The Formal Organization

The nature of the informal organization becomes more distinct when its key characteristics are juxtaposed with those of the formal organization.

Key characteristics of the informal organization:

• evolving constantly
• grass roots
• dynamic and responsive
• excellent at motivation
• requires insider knowledge to be seen
• treats people as individuals
• flat and fluid
• cohered by trust and reciprocity
• difficult to pin down
• collective decision making
• essential for situations that change quickly or are not yet fully understood

Key characteristics of the formal organization:

• enduring, unless deliberately altered
• top-down
• missionary
• static
• excellent at alignment
• plain to see
• equates “person” with “role”
• hierarchical
• bound together by codified rules and order
• easily understood and explained
• critical for dealing with situations that are known and consistent

Historically, some have regarded the informal organization as the byproduct of insufficient formal organization—arguing, for example, that “it can hardly be questioned that the ideal situation in the business organization would be one where no informal organization existed.” However, the contemporary approach—one suggested as early as 1925 by Mary Parker Follett, the pioneer of community centers and author of influential works on management philosophy—is to integrate the informal organization and the formal organization, recognizing the strengths and limitations of each. Integration, as Follett defined it, means breaking down apparent sources of conflict into their basic elements and then building new solutions that neither allow domination nor require compromise. In other words, integrating the informal organization with the formal organization replaces competition with coherence.

At a societal level, the importance of the relationship between formal and informal structures can be seen in the relationship between civil society and state authority. The power of integrating the formal organization and the informal organization can also be seen in many successful businesses.