Difference Between Formal And Informal Organization

Difference Between Formal Organization And Informal Organization

The major dissimilarities or difference between formal and informal organization can be described as follows:

1. Introduction

Formal Organization: Organizational structure with properly defined and classified jobs, authority and responsibility among the members.

Informal Organization: It is unplanned social or human relationship among the members of formal organization where there is no defined jobs and responsibility.

2. Formation

Formal Organization: It is formed by the top level management

Informal Organization: It is formed spontaneously by the social contact of members.

3. Basis Of Function

Formal Organization: Delegation of authority

Informal Organization: Friendship, sharing of feelings and interests

4. Nature

Formal Organization: It is stable and long lasting in nature

Informal Organization: It is unstable in nature

5. Rules

Formal Organization: Rules and regulations should be strictly followed by every member

Informal Organization: No definite rules and regulations to be followed

6. Violation Of Rules Results In

Formal Organization: Penalty and punishment

Informal Organization: Isolation

7. Official Leadership

Formal Organization: Yes, it has

Informal Organization: No, it has not

8. Objectives

Formal Organization: To meet organizational goals effectively

Informal Organization: To make friendship, and get social and psychological satisfaction

9. Organizational Chart

Formal Organization: Yes, it can be shown in chart

Informal Organization: No, it cannot be shown in chart 

10. Communication Style

Formal Organization: It follows scalar chain system of communication

Informal Organization: It uses grapevine or informal channel of communication

11. Type Of Process

Formal Organization: Mechanistic Process

Informal Organization: Humanistic Process

12. Scope

Formal Organization: It has wider scope than informal organization

Information: It has a limited scope

13. Size

Formal Organization: Larger in size than informal organization

Informal Organization: Smaller in size than formal organization

14. Supervision

Formal Organization: Proper supervision is possible

Informal Organization: Supervision is a difficult task for this kind of organization.

Formal Vs Informal Organization (Comparison Chart)

Basis Of Difference	Formal Organization	Informal Organization
Introduction	Organization with well defined tasks, authority and responsibilities	Social or human relationship among the members of formal organization
Formed By	Higher level management	Social contact of members
Basis Of Function	Delegation of authority	Friendship and sharing
Nature	Stable	Unstable
Rules	Defined	Not properly defined
Violation Of Rules	Penalty	Isolation
Official Leadership	Yes	No
Objective/Purpose	To achieve goals	To make friendship and psychological satisfaction
Organizational Chart	Yes, can be drawn	No
Communication	Scalar chain	Grapevine/Informal
Process	Mechanistic	Humanistic
Scope	Wider	Limited
Size	Large	Small
Proper Supervision	Possible	Not Possible

I hope this post is helpful to understand the difference between formal organization and informal organization and to make comparison between them.