Business Studies

Three Marks Question:
What is meant by 'formal organisation'? List any two limitations of 'formal organisation'. 


SOLUTION
Formal organisation is a well-defined structure of authority and responsibility that defines delegation of authority and relationships amongst the organisational members. It works along pre-defined set of policies, plans, procedures, schedules and programmes. Most of the decisions in formal organisation are based on pre-determined policies.

LIMITATIONS:
1. Loss of initiative:
As too much emphasis is placed upon formal rules and regulations, workers do not use their creative and innovative skills to perform organisational tasks. There is loss of initiative and innovative abilities due to strict adherence to rules.
2. Unsatisfied social needs:
Man is a social being. He needs to interact with people and share his feelings at-work and off-work with others. In a formally designed organisation structure, social needs remain unsatisfied as people are related to each other through a formal chain of command to discuss only official matters with each other. Social interactions are altogether ignored.
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Subjective Medium Published on 18th 09, 2020
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