The employees of Taty Software Ltd. have formed an informal organization. An informal organization does not exist purposefully but arises from shared interests, tastes, and religious and communal ties. Interaction among coworkers creates a 'network of social interactions among employees' known as the informal organization. The primary goal of this organization and structure is to provide psychological fulfilment to employees who have common interests. For example, employees with comparable interests in sports, entertainment, religion, and so on may organize their own informal organizations.
The following are the advantages of informal organisation:
i. Faster Communication: Because there is no prescribed official route, informal organizations use an independent communication channel. It results in more immediate information dissemination and faster feedback. Management may also employ such communication to convey information that the formal system cannot convey.
ii. Fulfil social needs: Informal organizations meet the members' social requirements, which formal organizations do not meet. This increases their job satisfaction by giving them a sense of belonging.
iii. Help in achieving organisational objectives: It contributes to fulfilling organizational goals by compensating for deficiencies in the formal organization. Informal organizations provide feedback on their work experiences by discussing their perspectives and suggestions with superiors.
The following are the disadvantages of informal organisation:
i. Resistance to change: Because informal organizations are tied by custom and culture, they resist change. Such opposition may cause the organization's expansion to be slowed or halted.
ii. Spread of rumours: When an informal organization spreads rumours, it becomes an opposing force that works against the official organization's interests.
iii. The pressure of group norms: People in informal organizations are pressured to follow group norms, even if such standards are detrimental to the formal organization's interests.
