DISTINCTION BETWEEN FORMAL AND INFORMAL ORGANIZATION

An organization established under certain rules and regulation is called formal organization. In such organization the duty, authority, responsibility and accountability of the person involved are clearly defined. But informal organization is spontaneously established with feeling, sentiment, spirit. whim, desire, concept etc. of similar minded persons. In such organization duty, authority, responsibility etc. are not defined. It functions with the understanding of the persons involved in it. So there are basic difference between formal and informal organization.

1. Formal organization is formed for achievement of clearly defined objective. Such organization are established to produce consumer goods and services and meet their needs. The main objective of the formal organization is to save their organization, make it stable, develop and expand it, earn profit and provide public services etc. But informal organization has no such objectives, it is only an association of similar minded persons. It is inspired by the feeling of the friendship,fame, respect, unity, safety of job etc.
2. Formal organization is established with certain process but informal organization comes to exist spontaneously.
3. All the members of the formal organization are bound together with authority relation. In such organization a hierarchical structure of lower level, middle level and higher level managements work in co-ordination and can be showed in a chart. But informal organization is not so and duty, authority and responsibility of its members are not found in written forms. So they cannot be shown in chart.
4. In a formal organization particular works which are performed for the achievement of organizational goal are identified. The identified works are classified in different groups and sub groups. But it is not so in informal organization.
5. In formal organization duty, authority, responsibility etc of each person is clearly defined by line, rules and regulation. Si it is not done in informal organization.Informal organization works with unwritten rules, regulation and code of conduct.
6. In formal organization efficiency, skills, discipline, control,etc.are given emphasis but in informal organization freedom, homely environment, friendly behaviour etc are emphasized.
7. In formal organization communication system operates in the predetermined model and way, but communication system operates in natural way. even then communication system becomes effective in informal organization.
8. A formal organization follows traditional norms and values. It adopts environmental changes less, but informal organization becomes dynamic and works according to the changing environment.
9. Leadership is already fixed in formal organization but in informal organization leadership is not fixed. It depends on the individual ability, efficiency and charisma informal organization.
10. All the activities of a formal organization are directed towards achievements of the organizational goal. So less importance is given to social and psychological necessity, interest, expectation, feelings etc. of the persons involved in it. But in informal organization priority is to social and psychological necessity, expectation, interest, feelings etc of its members.