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Formal and Informal Organisations Management

Introduction This essay is based on Formal and Informal organisations and the details and difference between the two. Recommendations and conclusions are also drawn based on the information presented. Formal and Informal Organisations The fundamental concepts of formal and informal organisations are regarded with the nature and processes in the workplace. A formal organization is the actual framework of the organization including its organizational chart and its chain of command which determines accountability.
However, within the informal organization, otherwise known as the ‘grapevine’ in a business, is the familiar working relationships that are established in the business place and contributes significantly to work culture. (Reingold, 2007) The real purpose of an organizational chart is to effectively outline the structure of the formal organization. It shows who is accountable to whom, from the top management to middle management and front line employees. It also shows the horizontalrelationships of the different functional and operational divisions and department personnel.
This chart consists of the functional framework and is important in the workplace to establish stability, clarity in work relationships and reporting standards between supervisors and subordinates. (Parker, 2002) Although top management in some businesses does not take into account, the actuality of informal organizations when trying to determine culture, it does have an essential influence on work dynamism. Workers interact with each other at different intervals and in different situations such as lunch, in the break room, and even after work.

These encounters can greatly influence the level of the sense of belongingness each employee experiences or feels in the working environment. If it is that these encounters are generally negative, the quality of work ethics and morale will be very poor. (Reingold, 2007) Understanding the direct reporting relationships outlined in the organizational chart is often less important than knowing the ‘go-to people’ in the company. For ambitious employees, this may mean looking beyondimmediate coworkers and managers and finding helpful mentors and internal coaches that want to help them succeed.
Information communication networks are also useful tools in learning how the company works just beyond what is conveyed from top management. It is important to note that when front line employees get prompted into management positions they often forget the significance in striking a balance between the formal structure and informal networks within the business. Disciplined structure and clear reporting relationships are important. However, management also has a lot to gain by remembering that informal networks are real and is of much use.
Managers can maximize insight on how employees feel towards their jobs and how functional terms are operating through familiar conversations. While formal relationships are key to accomplishing organizational and departmental goals and objectives they are sometimes restrictive to open interactions. (Parker M. , 2003) An example of a formal organization would be the Jamaica National Building Society which has clear concise goals written and duly communicated. It is a registered financial institution that provides service to the public in a very organized and structured manner both in physical space and information management.
An example of an informal organization would be a study group where interactions are familiar and there is no legal framework or organizational structure that governs the operations of the group. In businesses, employees are both part of the formal organization as well as the informal. A sales clerk in a marketing company is part of the formal structure of the business and is given a job description and specification but can also be part of an informal organization within the same business such as a partner group.
Recommendation Individuals in an organization normally work according to the structure prescribed by formality. However, at the same time, they develop other relationships in the organization, which may be deeply grounded on personal rather than work related principles. Both formal and informal organisations exist in all businesses and can impact their operations in negative and positive ways. My preference and recommendations with regards to choosing between the two would be the formal organization as it has many advantages.
It constitutes the fundamental structure of the delegation of work and responsibilities. Without a structure it would be very difficult for employees to agree between themselves and their roles and functions and such problems multiply in large amounts with the increase in size of the organization. In addition to this, formal organisations generate clarity of what support and input each employee can expect form others and in turn what is expected of him/her by others. Extreme discipline is promoted in the business and so employees have respect for each other.
In formal organisations it is easier to review and revise the organization with changing requirements. It provides a framework or structure for laying down pay scales and taking other decisions linked to organizational levels. It also helps in other human resources development activities such as recruitment, promotions, career planning and development and manpower planning. Conclusion Formal organisations are characterized by a chain of command and empowered individuals to enforce agreed upon rules. Rotary clubs and boy scouts are examples of formal organisations.
They both have a charter stating their place and function in society. On the other hand, an informal organization is one where the participants have no empowered central leader who has the power to enforce rules on the group. References Parker, A. (2002). Myths about Informal Networks. Sloan Management Review , 345-350. Parker, M. (2003). The Psychological Foundations of Business Administration. The Early Siciology of Management and Organisations , 216-235. Reingold, J. (2007). Hidden Workplace. Comments on organisation , 706-811.

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