This article will help you to learn about the difference between formal organisations and informal organisations.

Differences between Formal Organisations and Informal Organisations

Difference – Formal Organisation

Difference – 1. Structure

Formally structured authority-responsibility relationships.

Difference – 2. Emphasis:

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Official authority-responsibility structure.

Difference – 3. Power:

It is attached to position.

Difference – 4. Chain of command:

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The chain is respected and authority is delegated by the top management.

Difference – 5. Goals:

Organisational goals are considered important.

Difference – 6. Stability:

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They are stable; not affected by incomings and outgoings of organisational members.

Difference – 7. Flexibility:

Not flexible; cannot be easily changed. Members interact with each other on the basis of their job positions.

Difference – 8. Social acceptance:

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They arise out of formal authority- responsibility structure

Difference – 9. Formation:

They are deliberately created by managers.

Difference – 10. Objective (Purpose):

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They are formed to achieve formal organisational goals

Difference – 11: Flow of authority:

Authority vests with managers. It flows from top to bottom.

Difference – 12. Behaviour of Member:

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Behaviour of members is governed by norms and standards framed by managers.

Difference – 13. Leadership:

Managers act as leaders by virtue of the official positions.

Difference – 14. Governance:

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Its working is governed by rules and regulations.

Difference – 15. Control:

They are subject to strict measures of control.

Difference – 16. Communication:

Official communication channel. It is vertical in direction.

Difference – 17. Interactions:

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People interact on the basis of authority, responsibility and accountability.

Difference – 18. Winding Up:

It winds up according to legal procedures.

Difference –  Informal Organisation

Difference – 1. Structure:

Spontaneous reaction to formally structured organisation. No formal structure.

Difference – 2. Emphasis:

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People and their relationships.

Difference – 3. Power:

It is attached to person.

Difference – 4. Chain of Command:

The authority comes from personal knowledge and skills of group leaders and is given by the group itself.

Difference – 5. Goals:

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Individual goals may clash with organisational goals.

Difference – 6. Stability:

Change in members can lead to instability.

Difference – 7. Flexibility:

Highly flexible.

Difference – 8. Social Acceptance:

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They arise out of social norms of acceptance and recognition.

Difference – 9. Formation:

They are created by members to achieve their personal goals.

Difference – 10. Objective (purpose):

Their objective is to achieve social satisfaction.

Difference – 11. Flow of authority:

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Authority vests with the elected leaders. Leaders may be senior or junior to the members. Authority flows from leaders to followers.

Difference – 12. Behaviour of members:

Behaviour of members is governed by norms and standards framed by group members.

Difference – 13. Leadership:

Leaders are voluntarily chosen by members.

Difference – 14. Governance:

There are no fixed rules. Group norms govern their functioning.

Difference – 15. Control:

Group norms and values are the controlling measures.

Difference – 16. Communication:

Unofficial communication channel. It flows in vertical and horizontal directions.

Difference – 17. Interactions:

People interact on the basis of power and social status.

Difference – 18. Winding up:

It winds up at the will of members.