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Difference Between Formal and Informal Organization

Organization refers to a group of people who are working together in a place with cooperation and coordination for the attainment of a common goal. The tasks which have to be done are classified and allocated to the employees. In my previous article, I have discussed the details of the organization.

If you want to know more about the organization then you can follow the link given here. That was all about the organization but further, it is classified into two.

And they are formal organization and informal organization. If you are looking for the difference between formal and informal organization. Then you are on the right website because in today’s article of mine I will tell you about the difference between these two.

Before we proceed to the further part of this article, let us know the meaning of these two terms.

Formal Organization

It represents the classification of activities within the organization or enterprise. It clearly indicates who is to report to whom and connects the chief executive officer to the ordinary worker.

In other words, it is a kind of organization in which the roles, responsibilities, duties, and relationship with the top level management are clearly defined.

In case of the formal organization, the employees are organized into formal groups to achieve certain objectives of the firm. And these groups are dispersed once the objectives are achieved.

Informal Organization

It is an organizational structure which is established on the basis of likes, dislikes and the relationship of the employees without considering any rules and regulations.

The friendship and the mutual understanding between the employees are some of the reasons for the establishment of the informal organization.

Difference Between Formal and Informal Organization

Now we know the meaning of these two terms, let us move further and check out the difference between these two types of organization.

Formal OrganizationInformal Organization
It is created for the purpose of achievement of certain objectivesIt comes into existence automatically and there are no objectives to achieve.
It has well-defined duties and responsibilities.It has no well-defined duties and responsibilities.
It is based on the delegation of authority.It is based on the relationship between the employees.
Here the relationship is impersonal.Here the relationship is personal and social.
It gives importance to discipline and control.It gives importance to freedom and friendliness.
The communication system is predefined.There is no requirement of defining the communication system.
Formal organization is inflexible and rigid.Informal organization is flexible.
The primary goal is to achieve the objectives of the organization.The primary goal is to promote the psychological needs of the employees.
The rules and regulations are more in the formal organization.There are no such rules and regulations in the informal organization.
Unity of command is always maintained.There is no unity of command.
The decision making does not take much time.It takes time in the decision making process.
Formal organization follows centralization.Informal organization is decentralized organization.
The organizational structure is defined.The organizational structure is not defined.
The size of the formal organization is large.The size is small.
This is created by the top level management.This is created by the employees who are working.
The work is stable in this case.The work is not stable.
This focuses on the performance of the work.This focuses on the relationship between the employees.
The responsibility and accountability are fixed.The responsibility and accountability are not fixed.
The delegation of authority is required.There is no requirement of the delegation of authority.
All employees are not treated as equal.Here all the employees are treated as equal.
The work efficiency is more.The work efficiency is less in informal organization.
The formal organizations continue work for longer periods.The informal organizations may not last for long period.
This is not established voluntarilyThis is established voluntarily by the employees.
This does not spread rumors about the functioning of the organization.This spreads unnecessary rumors about the functioning of the organization.
Sentiments and emotions of the employees are not valued.The sentiments and emotions are valued.
The leaders are formal.The leaders here are informal.

You can also refer the image below for further information.

Difference Between Formal and Informal Organization


So this was all about the difference between formal and informal organization. I hope you are clear with the difference now. If you have any kind of doubts in your mind then you can comment down below.

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