Informal organization
Encyclopedia
The informal organization is the interlocking social structure
that governs how people work together in practice. It is the aggregate of behaviors, interactions, norms, personal and professional connections through which work gets done and relationships are built among people who share a common organization
al affiliation or cluster of affiliations. It consists of a dynamic set of personal relationships, social network
s, communities of common interest, and emotional sources of motivation. The informal organization evolves organically and spontaneously in response to changes in the work environment, the flux of people through its porous boundaries, and the complex social dynamics
of its members.
Tended effectively, the informal organization complements the more explicit structures, plans, and processes of the formal organization
: 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 formal organization
.
Key characteristics of the informal organization:
Key characteristics of the formal organization:
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.” However, the contemporary approach—one suggested as early as 1925 by Mary Parker Follett
, 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
and state authority. The power of integrating the formal organization and the informal organization can also be seen in many successful businesses.
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.
1984, argued, that Central media
and government type hierarchical organization
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 Group
s which were essentially a description of social networking services prior to the internet.
Social structure
Social structure is a term used in the social sciences to refer to patterned social arrangements in society that are both emergent from and determinant of the actions of the individuals. The usage of the term "social structure" has changed over time and may reflect the various levels of analysis...
that governs how people work together in practice. It is the aggregate of behaviors, interactions, norms, personal and professional connections through which work gets done and relationships are built among people who share a common organization
Organization
An organization is a social group which distributes tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job.There are a variety of legal types of...
al affiliation or cluster of affiliations. It consists of a dynamic set of personal relationships, social network
Social network
A social network is a social structure made up of individuals called "nodes", which are tied by one or more specific types of interdependency, such as friendship, kinship, common interest, financial exchange, dislike, sexual relationships, or relationships of beliefs, knowledge or prestige.Social...
s, communities of common interest, and emotional sources of motivation. The informal organization evolves organically and spontaneously in response to changes in the work environment, the flux of people through its porous boundaries, and the complex social dynamics
Social dynamics
Social dynamics can refer to the behavior of groups that results from the interactions of individual group members as well to the study of the relationship between individual interactions and group level behaviors...
of its members.
Tended effectively, the informal organization complements the more explicit structures, plans, and processes of the formal organization
Formal organization
Formal organization is 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...
: 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 organizationFormal organizationFormal organization is 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...
The nature of the informal organization becomes more distinct when its key characteristics are juxtaposed with those of the formal organizationFormal organization
Formal organization is 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...
.
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
- 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.” However, the contemporary approach—one suggested as early as 1925 by Mary Parker Follett
Mary Parker Follett
Mary Parker Follett was an American social worker, management consultant and pioneer in the fields of organizational theory and organizational behavior. She also authored a number of books and numerous essays, articles and speeches on democracy, human relations, political philosophy, psychology,...
, 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
Civil society is composed of the totality of many voluntary social relationships, civic and social organizations, and institutions that form the basis of a functioning society, as distinct from the force-backed structures of a state , the commercial institutions of the market, and private criminal...
and state authority. The power of integrating the formal organization and the informal organization can also be seen in many successful businesses.
Functions of informal organizations
Keith Davis suggests that informal groups serve at least four major functions within the formal organizational structure.Perpetuate the cultural and social values
They perpetuate the cultural and social values that the group holds dear. Certain values are usually already held in common among informal group members. Day-to-day interaction reinforces these values that perpetuate a particular lifestyle and preserve group unity and integrity. For example, a college management class of 50 students may contain several informal groups that constitute the informal organization within the formal structure of the class. These groups may develop out of fraternity or sorority relationships, dorm residency, project work teams, or seating arrangements. Dress codes, hairstyles, and political party involvement are reinforced among the group members.Provide social status and satisfaction
They provide social status and satisfaction that may not be obtained from the formal organization. In a large organization (or classroom), a worker (or student) may feel like an anonymous number rather than a unique individual. Members of informal groups, however, share jokes and gripes, eat together, play and work together, and are friends-which contributes to personal esteem, satisfaction, and a feeling of worth.Promote communication among members
The informal group develops a communication channel or system (i.e., grapevine) to keep its members informed about what management actions will affect them in various ways. Many astute managers use the grape- vine to "informally" convey certain information about company actions and rumors.Provide social control
They provide social control by influencing and regulating behavior inside and outside the group. Internal control persuades members of the group to conform to its lifestyle. For example, if a student starts to wear a coat and tie to class, informal group members may razz and convince the student that such attire is not acceptable and therefore to return to sandals, jeans, and T-shirts. External control is directed to such groups as management, union leadership, and other informal groups.Disadvantages of informal groups
Informal organizations also possess the following potential disadvantages and problems that require astute and careful management attention.Resistance to change.
Perpetuation of values and lifestyle causes informal groups to become overly protective of their "culture" and therefore resist change. For example, if restriction of output was the norm in an autocratic management group, it must continue to be so, even though management changes have brought about a more participative administration.Role conflict.
The quest for informal group satisfaction may lead members away from formal organizational objectives. What is good for and desired by informal group members is not always good for the organization. Doubling the number of coffee breaks and the length of the lunch period may be desirable for group members but costly and unprofitable for the firm. Employees' desire to fulfill the requirements and services of both the informal group and management results in role conflict. Role conflict can be reduced by carefully attempting to integrate interests, goals, methods, and evaluation systems of both the informal and formal organizations, resulting in greater productivity and satisfaction on everyone's behalf.Rumor
The grapevine dispenses truth and rumor with equal vengeance. Ill-informed employees communicate unverified and untrue information that can create a devastating effect on employees. This can undermine morale, establish bad attitudes, and often result in deviant or, even violent behavior. For example, a student who flunks an exam can start a rumor that a professor is making sexually harassing advances toward one of the students in class. This can create all sorts of ill feelings toward the professor and even result in vengeful acts like "egging" the residence or knocking over the mail box.Conformity
Social control promotes and encourages conformity 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. Obviously, these types of actions can force a good worker to leave the organization.Benefits of the informal organization
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 "pap tests" or impromptu 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 The IRG Solution - hierarchical incompetence and how to overcome itThe IRG Solution - hierarchical incompetence and how to overcome it
The IRG Solution is a book written by David Andrews and published in 1984.-Synopsis:The book, written in 1984, developed from a number of research papers at the Open University Energy Research Group, and an article appearing in the Guardian Newspaper which attempted an information- and...
1984, argued, that Central media
Central media
Central media were defined in the book The IRG Solution - hierarchical incompetence and how to overcome it and were those media which repeatedly broadcast a single identical message to many recipients such as mass media magazines and specialist technical and scientific journals...
and government type hierarchical organization
Hierarchical organization
A hierarchical organization 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 a hierarchy. In an organization, the hierarchy usually consists of a singular/group of power at the top with...
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 Group
Information Routing Group
An Information Routing Group is a component of social networks consisting of a semi-infinite set of similar interlocking and overlapping groups...
s which were essentially a description of social networking services prior to the internet.
Business Approaches
- Rapid growth. StarbucksStarbucksStarbucks Corporation is an international coffee and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 17,009 stores in 55 countries, including over 11,000 in the United States, over 1,000 in Canada, over 700 in the United Kingdom, and...
, 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 SchultzHoward SchultzHoward Schultz is an American business magnate. He is the best known as the chairman and CEO of Starbucks and a former owner of the Seattle SuperSonics...
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 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.
- Idea generation. Texas InstrumentsTexas InstrumentsTexas Instruments Inc. , widely known as TI, is an American company based in Dallas, Texas, United States, which develops and commercializes semiconductor and computer technology...
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 structureOrganizational structureAn organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its...
; organizational communicationOrganizational communicationOrganizational communication is a subfield of the larger discipline of communication studies. Organizational communication, as a field, is the consideration, analysis, and criticism of the role of communication in organizational contexts.... - CommunityCommunityThe term community has two distinct meanings:*a group of interacting people, possibly living in close proximity, and often refers to a group that shares some common values, and is attributed with social cohesion within a shared geographical location, generally in social units larger than a household...
; community of practiceCommunity of practiceA community of practice is, according to cognitive anthropologists Jean Lave and Etienne Wenger, a group of people who share an interest, a craft, and/or a profession. The group can evolve naturally because of the members' common interest in a particular domain or area, or it can be created...
; knowledge managementKnowledge managementKnowledge management comprises a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of insights and experiences... - Formal network; social networkSocial networkA social network is a social structure made up of individuals called "nodes", which are tied by one or more specific types of interdependency, such as friendship, kinship, common interest, financial exchange, dislike, sexual relationships, or relationships of beliefs, knowledge or prestige.Social...
; value networkValue networkA value network is a business analysis perspective that describes social and technical resources within and between businesses. The nodes in a value network represent people . The nodes are connected by interactions that represent tangible and intangible deliverables. These deliverables take the...
; social WebSocial WebThe 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 interactions form the basis of much online activity... - Network analysisNetwork analysisNetwork analysis can refer to:* Analysis of general networks: see Network theory.* Electrical network analysis see Network analysis .* Social network analysis.You may also be interested in Network planning and design...
; social network analysis; social networkSocial networkA social network is a social structure made up of individuals called "nodes", which are tied by one or more specific types of interdependency, such as friendship, kinship, common interest, financial exchange, dislike, sexual relationships, or relationships of beliefs, knowledge or prestige.Social...
Further reading
- Reingold, Jennifer and Yang, Jia Lynn. "Hidden Workplace" Fortune, July 23, 2007
- Creating an Informal Learning Organization.” Harvard Management Update, (July 1, 2000).
- Cross, Rob, Nitin NohriaNitin NohriaNitin Nohria is the 10th and the current dean of Harvard Business School. He is also the George F. Baker Professor of Business Administration, co-chair of the HBS Leadership Initiative and sits on the executive committee of the University's interfaculty initiative on advanced leadership.Over the...
and Andrew Parker, “Myths About Informal Networks—and How to Overcome Them.” SMR (MIT Sloan Management Review), April 1, 2002 - Cross, Rob and Laurence Prusak, “The People Who Make Organizations Go—or Stop.” Harvard Business Review, June 1, 2002.
- Goldsmith, Marshall and Jon Katzenbach, “Navigating the ‘Informal’ Organization.” BusinessWeek, February 14, 2007
- Krackhardt, David and Jeffry R. Hanson, “Informal Networks: The Company Behind the Chart.” Harvard Business Review, July 1, 1993.
- Follett, Mary Parker, “The Psychological Foundations of Business Administration.” Paper presented before a Bureau of Personnel Administration conference group, January 1925. Reprinted in Dynamic Administration: The Collected Papers of Mary Parker Follett, edited by Henry C. Metcalf and L. Urwick, in The Early Sociology of Management and Organizations, Volume III. Kenneth Thompson, series editor. Routledge, 2003.
- “The Office Chart That Really Counts.” BusinessWeek, February 27, 2006
- Murray, Sarah, “Putting the House In Order.” The Financial Times, November 8, 2006]
- Shaw, Helen, “Not So Small, Still Beautiful.” CFO.com, March 3, 2006