Groups can be categorized as follows:

I. Formal and informal groups,

II. Primary and secondary groups and

III. Small and large group.

Type # 1. Formal and Informal Groups:


Formal Groups:

Formal groups are deliberately created to carry out specific tasks for attainment of organisational goals. These groups have clearly defined authority-responsibility relationships, communication channels, rules and regulations to govern the behaviour of members.

Committees, task forces and work teams are different forms of formal groups. Formal groups can be:

(a) Permanent formal groups [Command groups and permanent committees]


(b) Temporary formal groups [Task forces and project groups]

(a) Permanent formal groups are formally represented on the organisation chart. They are also known as command groups and consist of managers and their subordinates. A functional or a product department are the forms of command groups.

(b) Temporary formal groups are formed to deal with specific problems. They dissolve once the problem is solved. Task groups, project groups or ad hoc committees are the forms of temporary formal groups. These groups are frequently created by organisations to respond to the changing environment and include people from different command groups.

Types of Committees:


Different types of committees that represent formal groups are discussed below:

(a) Line and Staff Committees:

The basis of line and staff committees is authority. A committee which has authority to make decisions to be implemented by the subordinates is a line committee and a committee which does not make decisions but only assists superiors and advices and counsels them is a staff committee. It enables line managers to effectively perform the managerial functions. The authority of staff committee to its superiors is advisory in nature.

(b) Ad hoc and Standing Committee:


The basis for forming ad hoc and standing committees is time frame. Committees which are formed for a specific purpose and dissolve after the purpose is achieved are ad hoc or temporary committees. For example, company wants to launch a new product and conduct a market survey.

A committee can be formed for this purpose which shall function till the survey is completed. Once done and the product launched, the committee stands dissolved. A committee which lasts for long duration of time is standing or permanent committee. These committees provide advisory functions to the chief executives.

(c) Formal and Informal Committees:

The basis of formal and informal committees is their position on the organisation chart. Committees formed according to formal procedures with assigned duties, power and authority are known as formal committees. They are formally depicted on the organisation charts and are permanent committees.


(d) Plural Executive Committee and Advisory Committee:

A committee which is empowered to carry out the managerial functions of planning through controlling, to make decisions and order for implementation is a plural executive committee. The most common example of this committee is the board of directors which takes important managerial decisions and orders for their implementation. The advisory committee does not make decisions but only performs the advisory or recommendatory functions.

Informal Groups:



These groups are not created by managers but spontaneously grow out of interaction amongst members of the formal groups. They are created by choice for promoting the group goals. The members even subordinate their individual goals to the group goals.

These groups may oppose or support the formal organisational objectives. These are the informal committees which are not shown on the organisation chart and form out of common thinking of a group of people. They are temporary in nature and assist the top executives on specific official matters.

Types of Informal Groups:

Informal groups, also called ‘overlays’ are classified into five categories by Pfiffner and Sherwood. These are:


(a) Social overlays:

These informal groups are formed because of social needs of workers, that is, need to interact with each other.

(b) Functional overlays:

People of one department seek assistance and advise of supervisors of other departments. Workers of production department can go to supervisors of sales department to get their problems (related to production) solved. The groups formed through inter-departmental interactions are called functional overlays.

(c) Decision overlays:

Some people excel in decision-making because of their ability to judge, analyse and scan the information. People often approach them from different departments for consultation. This forms decision overlays.


(d) Power overlays:

Power is different from authority. While authority is authority of the position, power is the authority of the individual. Managers can acquire power through experience, education and factors like religion, politics, nationality etc. Interaction amongst people based on such factors forms power overlays.

(e) Communication overlays:

People using common equipment’s and machines, recreational halls, canteens, club facilities etc. communicate informally and communication overlays are, thus, formed.

Functions of Informal Groups:

Following are the functions of informal groups:


(i) Maintain group values and life-style:

Within the formal structure of organisation, informal groups arise on the basis of common social values and life-styles of individuals. However, as these groups get strengthened, they develop the tendency to resist change.

(ii) Social satisfaction:

Interaction with each other at the work place, sharing common thoughts, sitting and eating together satisfy social needs of the group members.

(iii) Communication systems:

The informal system of communication operates along the formal channel of communication and some times, works even faster than the formal communication channel. It enables the messages to be transmitted at a much faster speed though rumours may also spread along with formal messages.


(iv) Maintain social control:

Informal groups influence the behaviour of people inside and outside the group. Influencing the behaviour of people inside the group is called internal control and of those outside the groups is called external control. A particular kind of behaviour or a dress not acceptable to the group and accordingly condemned, serves as internal control. For example, organisation will not accept western dress where all women wear sarees and, thus, a particular dress code becomes a means of internal control. The external control is exercised outside this group such as, trade unions.

Type # 2. Primary and Secondary Groups:

Primary groups are formed to promote common interests and goals. Members share common values and observe behaviour that will promote these values. These groups are small groups and largely affect each other’s behaviours. Friendship and social needs are the basis for forming these groups.

Secondary groups are those whose members do not actively interact with each other. They have loose inter-personal relationships and no common goals to share. Professional bodies, business organisations etc. are the common forms of secondary groups.

Type # 3. Small and Large Groups:

Small groups are formed with few members. Their members have close interaction with each other. Large groups have large number of members. Members have weak inter-personal interactions and do not actively communicate or interact with each other.


Management of Informal Groups:

Informal groups (or informal organisations) are an important outgrowth of formal organisation structure that managers cannot avoid. Rather than viewing informal groups as hindrance to formal organisational goals, managers should give formal acceptance to these groups. They should view informal groups as supportive to formal organisation structures.

Many organisational problems that cannot be solved officially can be smoothly solved by informal groups if they are formally accepted by managers. They speed up transmission of useful information throughout the organisation. They provide feedback to managers on how people respond to policies and procedures.

They provide useful tips on matters which they cannot officially deal with. They also promote team spirit and cooperation amongst group members so that managers need not maintain close control and supervision over employees. Informal groups are a strong support and supplement to formal organisation structures. Managers should, therefore, manage these groups to merge group goals with organisational goals.

Following measures help to achieve this objective:

1. Managers should view informal groups as pillars of support to formal organisation structures.


2. They should accept informal groups as forces that can solve their official problems.

3. They can use these groups to obtain quick feedback on how people are responding to organisational plans, policies and procedures.

4. They should inform employees that they are not against informal groups. Rather, they view them as important supplement to formal groups.

5. They should involve group members in making official decisions through group decision-making processes.

6. They should integrate group goals with organisational goals and avoid inter-group conflicts.

7. They should provide an environment where members of informal groups can achieve the informal goals and also develop positive attitude towards the formal organisation structure.

8. They should increase group loyalty and cohesiveness by promoting inter-group competition, increase inter-personal attraction of group members, develop consensus amongst group members on group goals etc..