The informal organization is the interlocking social structure that governs how people work together in practice. It is the aggregate of, norms, personal and professional connections through which work gets done and relationships are built among people who share a common organizational affiliation or cluster of affiliations. It consists of a dynamic set of personal relationships, social networks, communities of common interest, and emotional sources of motivation. The informal organization evolves, and the complex social dynamics of its members.
Tended effectively, the informal organization complements the more ...view middle of the document...
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 like
* flat and fluid
* cohered by trust and reciprocity
* difficult to pin down
* collective decision making
* essential for situations that change quickly or are not yet fully understood
Key characteristics of the formal organization:
* enduring, unless deliberately altered
* excellent at alignment
* plain to see
* equates “person” with “role”
* 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, 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.
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.