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FREE online courses on Group Dynamics - Comparative Study of Formal and Informal Organization


Formal Organization vs. Informal Organization






Formal Organization


Informal organization


It is consciously created to achieve pre- determined objectives.

It has no predetermined objectives. It is created because of integration among people in the formal organization.


It is an official hierarchy of relations. It refers to the structure of well-defined authority and responsibility relationships.

Its structure is based on human emotions and sentiments. It refers to the personal relationships, which develop automatically when people work together.


Formal relations are well planned and are created deliberately.

Informal relations are unplanned and they originate automatically.

Chain of Command

Formal organization follows the official chain of command, which can't be changed. Communication has to follow formal channels.

Informal organization does not have a fixed chain of command. It is based on command. It is based on the sentiments of the members. There are no fixed patterns of communication.


Formal organization is usually stable. It continues to exist even if some members leave it.

Informal organization does not last so long. The life of informal groups is generally short. They can disintegrate if some members leave the organization or even get transferred to some other department.


Formal authority is institutional, i.e., it attaches to a position and a person exercises it by virtue of his position. Formal authority flows downward as it is delegated.

Informal authority is personal i.e., it attaches to a person. It flows downward, upward and horizontally. Formal authority is replaced by informal influence.


The managers who have formal authority provide leadership to the workers.

Informal leaders are not appointed, but chosen by the group members.

Human Relations

Formal organization reflects technological aspect of the organization. It does not take care of human sentiments.

Informal organization reflects human

aspect. It is based on the attitudes, likes and dislikes, tastes, languages, etc., of people.


It allows a rigid structure of relationships. The lines of communication and flow of authority are predecided.

It is loosely structured and is highly flexible in nature. Communication is quite free as there are no barriers to downward, upward or horizontal communication.

Pattern of Behavior

It has a prescribed pattern of behavior for its members. There is a system of reward and punishment to regulate the behavior of members.

It develops social norms of behavior through mutual consent. Rewards include satisfaction, social esteem, recognition, etc. and punishments includes censure, isolation, boycott, etc.



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