Distinguish between formal and informal organisations

Key Differences Between Formal and Informal Organization

The difference between formal and informal organisation can be drawn clearly on the following grounds:

1. Formal Organization is an organisation in which job of each member is clearly defined, whose authority, responsibility and accountability are fixed. Informal Organization is formed within the formal organisation as a network of interpersonal relationship when people interact with each other.
2. Formal organisation is created deliberately by top management. Conversely, informal organisation is formed spontaneously by members.
3. Formal organisation is aimed at fulfilling organisation’s objectives. As opposed to an informal organisation is created to satisfy their social and psychological needs.
4. Formal organisation is permanent in nature; it continues for a long time. On the other hand, informal organisation is temporary in nature.
5. The formal organisation follows official communication, i.e. the channels of communication are pre-defined. Unlike informal organisation, the communication flows in any direction.
6. In the formal organisation, the rules and regulations are supposed to be followed by every member. In contrast to informal communication, there are norms, values, and beliefs, that work as a control mechanism.
7. In the formal organisation, the focus is on the performance of work while in the case of an informal organisation, interpersonal communication is given more emphasis.
8. The size of a formal organisation keeps on increasing, whereas the size of the informal organisation is small.
9. In a formal organisation, all the members are bound by the hierarchical structure, but all the members of an informal organisation are equal.