The informal organization is the interlocking

social structure In the social sciences, social structure is the aggregate of patterned social arrangements in society that are both emergent from and determinant of the actions of individuals. Likewise, society is believed to be grouped into structurally rel ...

that governs how people work together in practice. It is the aggregate of norms, personal and professional connections through which work gets done and relationships are built among people who share a common

organization An organization or organisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, -ize (-isation, -ization), see spelling differences) is an legal entity, entity—such as ...

al affiliation or cluster of affiliations. It consists of a dynamic set of personal relationships,

social network A social network is a social structure consisting of a set of social actors (such as individuals or organizations), networks of Dyad (sociology), dyadic ties, and other Social relation, social interactions between actors. The social network per ...

s, communities of common interest, and emotional sources of motivation. The informal organization evolves, and the complex

social dynamics Social dynamics (or sociodynamics) is the study of the behavior of groups and of the interactions of individual group members, aiming to understand the emergence of complex social behaviors among microorganisms, plants and animals, including h ...

of its members also. Tended effectively, the informal organization complements the more explicit structures, plans, and processes of the

formal organization A formal organization is an organization with a fixed set of rules of intra-organization procedures and structures. As such, it is usually set out in writing, with a language of rules that ostensibly leave little discretion for interpretation. So ...

: it can accelerate and enhance responses to unanticipated events, foster innovation, enable people to solve problems that require collaboration across boundaries, and create footpaths showing where the formal organization may someday need to pave a way.

The informal organization and the formal organization

The nature of the informal organization becomes more distinct when its key characteristics are juxtaposed with those of the

. Key characteristics of the informal organization: *evolving constantly *grass roots *dynamic and responsive *excellent at motivation *requires insider knowledge to be seen *treats people as individuals * flat and fluid *cohered by trust and reciprocity *difficult to pin down *collective decision making *essential for situations that change quickly or are not yet fully understood Key characteristics of the formal organization: *enduring, unless deliberately altered *top-down *missionary *static *excellent at alignment *plain to see *equates "person" with "role" *hierarchical *bound together by codified rules and order *easily understood and explained *critical for dealing with situations that are known and consistent Historically, some have regarded the informal organization as the byproduct of insufficient formal organization—arguing, for example, that "it can hardly be questioned that the ideal situation in the business organization would be one where no informal organization existed."Mescon, Michael H., "Comments on Organization." ''The Journal of Educational Sociology'', Vol. 33, No. 1 (September, 1959), pp. 34-36 However, the contemporary approach—one suggested as early as 1925 by

Mary Parker Follett Mary Parker Follett (3 September 1868 – 18 December 1933) was an American management consultant, social worker, philosopher and pioneer in the fields of organizational theory and organizational behavior. Along with Lillian Gilbreth, she was o ...

, the pioneer of community centers and author of influential works on management philosophy—is to integrate the informal organization and the formal organization, recognizing the strengths and limitations of each. Integration, as Follett defined it, means breaking down apparent sources of conflict into their basic elements and then building new solutions that neither allow domination nor require compromise. In other words, integrating the informal organization with the formal organization replaces competition with coherence. At a societal level, the importance of the relationship between formal and informal structures can be seen in the relationship between

civil society Civil society can be understood as the "third sector" of society, distinct from government and business, and including the family and the private sphere.

conformity Conformity or conformism is the act of matching attitudes, beliefs, and behaviors to social group, group norms, politics or being like-minded. Social norm, Norms are implicit, specific rules, guidance shared by a group of individuals, that guide t ...

among informal group members, thereby making them reluctant to act too aggressively or perform at too high a level. This can harm the formal organization by stifling initiative, creativity, and diversity of performance. In some British factories, if a group member gets "out of line", tools may be hidden, air may be let out of tires, and other group members may refuse to talk to the deviant for days or weeks. These types of actions can force a good worker to leave the organization.

Benefits

Although informal organizations create unique challenges and potential problems for management, they also provide a number of benefits for the formal organization.

Blend with formal system

Formal plans. Policies, procedures, and standards cannot solve every problem in a dynamic organization; therefore, informal systems must blend with formal ones to get work done. As early as 1951, Robert Dubin recognized that "informal relations in the organization serve to preserve the organization from the self-destruction that would result from literal obedience to the formal policies, rules, regulations, and procedures". No college or university could function merely by everyone following the "letter of the law" with respect to written policies and procedures. Faculty, staff, and student informal groups must cooperate in fulfilling the "spirit of the law" to effectuate an organized, sensibly run enterprise.

Lighten management workload

Managers are less inclined to check up on workers when they know the informal organization is cooperating with them. This encourages delegation, decentralization, and greater worker support of the manager, which suggests a probable improvement in performance and overall productivity. When a professor perceives that students are conscientiously working on their term papers and group projects, there are likely to be fewer "pop tests" or important progress reports. This eases the professors load and that of the students and promotes a better relation- ship between both parties.

Fill gaps in management abilities

For instance, if a manager is weak in financial planning and analysis, a subordinate may informally assist in preparing reports through either suggestions or direct involvement.

Act as a safety valve

Employees experience frustration, tension, and emotional problems with management and other employees. The informal group provides a means for relieving these emotional and psychological pressures by allowing a person to discuss them among friends openly and candidly. In faculty lounge conversations, frustrations with the dean, department head, or students are "blown off" among empathetic colleagues.

Encourage improved management practice

Perhaps a subtle benefit of informal groups is that they encourage managers to prepare, plan, organize, and control in a more professional fashion. Managers who comprehend the power of the informal organization recognize that it is a "check and balance" on their use of authority. Changes and projects are introduced with more careful thought and consideration, knowing that the informal organization can easily kill a poorly planned project.

Understanding and dealing with the environmental crisis

The IRG Solution: hierarchical incompetence and how to overcome it (1984) argued that central media and government-type

hierarchical organization A hierarchical organization or hierarchical organisation (see spelling differences) is an organizational structure where every entity in the organization, except one, is subordinate to a single other entity. This arrangement is a form of hierarchy ...

s could not adequately understand the environmental crisis we were manufacturing, or how to initiate adequate solutions. It argued that what was required, was the widespread introduction of informal networks or Information Routing Groups which were essentially a description of social networking services prior to the internet.

Business approaches

#Rapid growth.

Starbucks Starbucks Corporation is an American multinational List of coffeehouse chains, chain of coffeehouses and Starbucks Reserve, roastery reserves headquartered in Seattle, Washington. It was founded in 1971 by Jerry Baldwin, Zev Siegl, and Gor ...

, which grew from 100 employees to over 100,000 in just over a decade, provides structures to support improvisation. In a July 1998 Fast Company article on rapid growth, Starbucks chairman

Howard Schultz Howard D. Schultz (born July 19, 1953) is an American businessman and author who was the chairman and chief executive officer of Starbucks from 1986 to 2000, from 2008 to 2017, and interim CEO from 2022 to 2023. Schultz owned the Seattle SuperS ...

said, "You can't grow if you're driven only by process, or only by the creative spirit. You've got to achieve a fragile balance between the two sides of the corporate brain." #Learning organization. Following a four-year study of the

Toyota is a Japanese Multinational corporation, multinational Automotive industry, automotive manufacturer headquartered in Toyota City, Aichi, Japan. It was founded by Kiichiro Toyoda and incorporated on August 28, 1937. Toyota is the List of manuf ...

Production System, Steven J. Spear and H. Kent Bowen concluded in Harvard Business Review that the legendary flexibility of Toyota's operations is due to the way the scientific method is ingrained in its workers – not through formal training or manuals (the production system has never been written down) but through unwritten principles that govern how workers work, interact, construct, and learn.Spear, Steven J. and H. Kent Bowen, "Decoding the DNA of the Toyota Production System." ''Harvard Business Review'', September 1999 #Idea generation.

Texas Instruments Texas Instruments Incorporated (TI) is an American multinational semiconductor company headquartered in Dallas, Texas. It is one of the top 10 semiconductor companies worldwide based on sales volume. The company's focus is on developing analog ...

credits its "Lunatic Fringe"—"an informal and amorphous group of TI engineers (and their peers and contacts outside the company)," according to Fortune Magazine—for its recent successes. "There's this continuum between total chaos and total order," Gene Frantz, the hub of this informal network, explained to Fortune. "About 95% of the people in TI are total order, and I thank God for them every day, because they create the products that allow me to spend money. I'm down here in total chaos, that total chaos of innovation. As a company we recognize the difference between those two and encourage both to occur.

Related concepts

Organizational behavior Organizational behavior or organisational behaviour (see American and British English spelling differences, spelling differences) is the "study of human behavior in organizational settings, the interface between human behavior and the organiza ...

;

organizational structure An organizational structure defines how activities such as task allocation, coordination, and supervision are directed toward the achievement of organizational aims. Organizational structure affects organizational action and provides the found ...

;

organizational communication Within the realm of communication studies, organizational communication is a field of study surrounding all areas of communication and information flow that contribute to the functioning of an organization . Organizational communication is constant ...

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;

community of practice A community of practice (CoP) is a group of people who "share a concern or a passion for something they do and learn how to do it better as they interact regularly". The concept was first proposed by cognitive anthropologist Jean Lave and edu ...

;

knowledge management Knowledge management (KM) is the set of procedures for producing, disseminating, utilizing, and overseeing an organization's knowledge and data. It alludes to a multidisciplinary strategy that maximizes knowledge utilization to accomplish organ ...

;

value network There is no agreed upon definition of value network. A general definition that subsumes the other definitions is that a value network is a network of roles linked by interactions in which '' economic entities'' engage in both tangible and intan ...

;

social Web The social web is a set of social relations that link people through the World Wide Web. The social web encompasses how websites and software are designed and developed in order to support and foster social interaction. These online social int ...

social network analysis Social network analysis (SNA) is the process of investigating social structures through the use of networks and graph theory. It characterizes networked structures in terms of ''nodes'' (individual actors, people, or things within the network) ...

;

The informal organization and the formal organization

Benefits

Blend with formal system

Lighten management workload

Fill gaps in management abilities

Act as a safety valve

Encourage improved management practice

Understanding and dealing with the environmental crisis

Business approaches

Related concepts

References

Further reading

The informal organization and the formal organization

Disadvantages

Resistance to change

Role conflict

Rumor

Conformity

Benefits

Blend with formal system

Lighten management workload

Fill gaps in management abilities

Act as a safety valve

Encourage improved management practice

Understanding and dealing with the environmental crisis

Business approaches

Related concepts

References

Further reading