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Informal Organization

As the formal organization grows in size, parallel existence of informal relationships along with formal relationships becomes unavoidable, Informal organizations have always existed with formal organization. They arise because of inevitable social and personal needs of individuals which cannot be satisfied by the principles of formal organization. They represent non-planned, unofficial, social interactions amongst people working in formal structures. They arise out of common interests of people, these organizations are not governed by formal set of principles but nevertheless, are and important and integral part of formal organization.  E Wight Bake calls the creation of informal organizations along with formal organizations a fusion process. According to him, “ When an individual and an organization come to gather in such a way that the individual is a participant in, and a member of, the organization and the two are mutually dependent on each other, both are reconstructed in the process. The organization to some degree remakes the individual and the individual to some degree remakes the organizations.” Importance of informal organization was first recognized by Chester Barnard. He viewed informal organization as “any joint personal activity without conscious joint purpose, even though contributing to joint results.” Keith Davis defines informal organization as “a network of personal and social reactions not established or required by formal organization but arising spontaneously as people associate with one another.”

While working in a formal organization, people of different departments at different levels interact with each other. Discuss their common interests (cultural, social etc) and from groups to promote their goals. These goals are known as group goals and informal organization is and important means to satisfy these goals.

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