Question

Differentiate between formal and informal organisation on the basis of the following:

i. Meaning

ii. Origin

iii. Authority

iv. Behaviour

v. Flow of communication

vi. Nature

Answer 1

Basis of Difference	Formal Organisation	Informal Organisation
1. Meaning	An organisation created by the management in the form of structure of authority is called formal organisation.	An organisation born out of mutual relations is called informal organisation and it emerges automatically.
2. Origin	It is established because of the rules and policies of the organisation.	It is established because of social relationship.
3. Authority	Authority is born out of the posts established in the organisation and moves downwards.	Authority comes into existence because of individual virtues. Authority moves downwards or it can be horizontal.
4. Behaviour	Behaviour is predetermined. It means that it is known beforehand who will do what and how will he do it; who will be the boss and who will be the subordinate.	Behaviour depends on individual attachment which means it is not predetermined.
5. Flow of Communication	Communication is defined. It moves according to the scalar chain of authority.	Communication is not defined. It can move in any direction.
6. Nature	It is more stable. Forecasting is possible in it.	It is temporary and less stable. Forecasting is not possible in it.