Formal & Informal Organisation

1 Mark Questions

1. State any one advantage of formal organisation. (Delhi 2014)

Ans. Formal organisation results in systematic and smooth functioning of an organisation.

2. What is meant by formal organisation? (Compartment 2014)

Ans. Formal organisation refers to the organisational structure which is designed by the management to accomplish a particular task. It specifies the boundaries of authority and responsibility for the achievement of organisational goals.

1. Why is it easy to fix responsibility in formal organisation? (All India 2009; Delhi 2009c)

Ans. Formal organisation is an official set up. It clearly spells out what exactly is the role of each job and position in an organisation. The main feature of formal organisation is well-defined structure of authority, responsibility and structure. Therefore, it is easier to fix responsibility informal organisation.

4 / 5Marks Questions

1. Distinguish between 'formal and informal organisation' on the basis of meaning,

origin, authority and flow of communication. (Delhi 2013)

Ans. Difference between formal and informal organisation

Basis Formal organisation Informal organisation

Meaning Structure of authority relationships created by Network of social relationships arising out of

the management. interaction among employees.

Origin Arises as a result of company rules and policies. Arises as a result of social interaction.

Authority Arises by virtue of position in management. Arises out of personal qualities.

Flow of Communication takes place through the scalar Flow of communication is not through a

communication chain. planned route. It can take place in any

direction.

1. Explain any two advantages and any two disadvantages of informal organisation.

(All India 2011,2010; Delhi 2010)

Ans. Advantages of informal organisation are as follows:

1. Fulfils social needs It gives due importance to psychological and social needs of employees.

1. Correct feedback Through informal structure, the top level managers can know the

real feedback of employees on various policies and plans introduced by them.

Disadvantages of informal organisation are as follows:

1. Spread rumours According to a survey, 70% cff information spread through informal organisational structure are rumours and can mislead the employees.
2. No systematic working It does not form any definite structure for smooth working of an organisation.

6. State any four advantages of formal organisation. (Delhi 2010)

Ans. Four advantages of formal organisation are as follows:

1. Systematic working It is an official hierarchy of relations. So, it results in systematic and smooth functioning of an organisation.
2. No overlapping of work In formal organisational structure, work is systematically divided among various departments and employees. So, there is no possibility of duplication or overlapping of work.
3. Coordination It results in coordinating the activities of various departments.

Coordination proceeds according to a prescribed pattern in the organisation structure.

1. Creation of chain of command It clearly defines superior subordinate relationship,

i.e. who reports to whom. Communication has to follow a pattern of formal channels.

7. State any two advantages and any two disadvantages of formal organisation. (Delhi 2010)

Ans. Advantages of formal organisation

advantages of formal organisation are as follows:

1. Systematic working It is an official hierarchy of relations. So, it results in systematic and smooth functioning of an organisation.
2. No overlapping of work In formal organisational structure, work is systematically divided among various departments and employees. So, there is no possibility of duplication or overlapping of work.
3. Coordination It results in coordinating the activities of various departments.

Coordination proceeds according to a prescribed pattern in the organisation structure.

1. Creation of chain of command It clearly defines superior subordinate relationship,

i.e. who reports to whom. Communication has to follow a pattern of formal channels. Disadvantages of formal organisation are as follows:

1. Delay in action It follows the official chain of command which can't be changed. While following scalar chain and chain of command, actions get delayed in formal structure.
2. Emphasis on work only It gives importance to work only, it ignores human relations, creativity, talents, etc as it reflects technological aspect of the organisation.