Business Studies

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


SOLUTION
The informal organisation may be defined as “a network of personal and social relationships that arise spontaneously as people associate with one another in a work environment. It is composed of all the informal groupings of people within a formal organisation.”

Limitations of Informal Organisation:
  • Attitude of leaders:
If leaders have negative attitude, that is, want their personal interests to be satisfied at the cost of group interests, informal organisation will work against the formal organisational goals. This is harmful for the organisation.

  • Role conflict:
As members of formal and informal organisation, people face role conflict. If group goals are different from formal goals, members conform to group goals. If the organisation allows lunch break of 30 minutes but group extends it to 45 minutes to socialize, members face conflict in their formal and informal roles.
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Subjective Medium Published on 18th 09, 2020
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