Major disadvantages suffered by an informal organization are: (a) Works counter to the organizational objectives (b) Conformity (c) Rumours (d) Social costs (e) Resistance to change!
(a) Works counter to the organizational objectives:
Informal organization forces the members to restrict their output; exhibit a disunites in organizational policies and procedures, cause insubordination, and in general, promote unauthorized actions that work counter to the formal organization.
Informal organization exerts strong pressures for Conformity.
Conformity can make group members reluctant to act independently, creatively or imaginatively, for fear of losing group approval and membership. Informal group leaders sometimes manipulate the group toward undesirable needs. They may pose road blocks for the competent people.
The informal leaders may force members to restrict the level of output, to exceed the time limit for coffee to tea break, to indulge in intolerable activities taxing the patience of the management. In this way, informal group can become an instrument of neurotic owners of conflict or non-responsible rattle- rousers using the group for their own selfish ends.
Informal communication system, known as grapevine, is susceptible for use in spreading destructive, distorted, inaccurate and incomplete information cutting across organisational lines with tremendous speed. Where the formal communication system is poor such rumours prosper. When the employees are not kept informed on matters that directly affect them, they may transmit incorrect information that undermines morale or leads people to make poor and mediocre decisions.
(d) Social costs:
Informal organisation is safety value for the frustration and other emotional problems of work group. Research has revealed that social interaction by alleviating monotony on the job my actually contribute to production. But this is true only up to a certain point. Informal organisation may result in higher operating costs because it may encourage gossiping joke telling, general horse play, or idle conversion that satisfy some of the members social needs.
(e) Resistance to change:
Every informal group considers certain cultural values which, it feels, desirable to be maintained by the members of the group. Members in the process of following these values and norms unwillingly maintain status quo and resist chance which may be essential in promoting the development of their personality and the organisational benefits.
Perpetuation of status quo ultimately results in resistance to change which the management finds it very difficult to overcome such resistance. Some members may perceive immediate threat to their position by introducing some changes like introduction of computer in the accounts department) in the organisation. Perceptions of threats are just as real m the formation and solidification of an informal organisation as an actual threat.