What is a Formal Organization?
A formal organization is the structure of the organization that is officially formed by the management to achieve the defined goals. In other words, a formal organization refers to an organization that is formed under official rules and regulations to achieve defined objectives.
A formal organization is a structure of well-defined jobs with a prescribed system of communication, coordination, and delegation of authority. This structure is deliberately designed to enable people to work together for the achievement of common objectives.
Under this organization, there is a well-designed job for each individual. Besides, there is definite authority and responsibility for each individual to make the effectiveness of their efforts. There is a clearly defined official relationship between superior and subordinate in the organization to achieve defined objectives.
Examples of formal organizations are Schools, Business Firms, Hospitals, Government Organizations, and other organizations that are officially formed.
By, Scott – A formal organization is a system of coordinated activities of a group working towards a common goal under authority and leadership.
Koontz and Weihrich – Formal organization means the intentional structure of roles in a formally organized enterprise.
The formal organization emphasizes working under established rules and regulations of the enterprise. There is an official line of communication among all the employees and the chain of official relations between superior and subordinate.
Top-level management plays a key role to maintain coordination and mutual relation among all the formal structures to achieve common goals. However, the achievement of organizational objectives depends upon the ability of subordinates and management.
The important features of formal organizations are as follows:
- It is officially formed by management to carry out a specific job.
- It is based on the division of works on the basis of specialization.
- The procedural rules and regulations are written.
- It clearly defines the authority and responsibility of every individual.
- It specifies the official line of communication.
- It focuses on a job to be performed and not on the individual doing the work.
- It has official leadership from top to subordinate level.
Difference Between Formal and Informal Organization
|Basis of |
|Formal Organization||Informal Organization|
|Meaning||Formal organization refers to |
an organization that is established to
achieve defined objectives through
|Informal organization refers to the |
an organization that is formed without
having predefined rules and
regulations to interact with people.
|Objectives||It is created for the achievement |
of predetermined objectives.
|It has no predetermined objectives.|
|Hierarchy||It has an official hierarchy of relations|
between various levels of management.
|It has no specific hierarchy. It’s|
the structure is completely based on
human emotions and sentiments.
|Planning||Under this, formal relationships|
are well planned.
|Under this, informal relations are|
unplanned, and they are created
|Stable||It is usually stable.||It is usually unstable and does not|
last so long.
|Communication||Communication is made|
through proper channel.
|There is no fixed and established|
channel for communication.
|If follows the official chain|
of command and is generally
|It does not have any fixed chain|
of command. It is sentimentally
based on members.
|Disclosure||It reflects technological|
|It reflects human aspects.|
|There is a well-defined authority|
|Under this, personal relationships are|
automatically developed when
people work together.
|Size and |
|Usually formal organization size|
is larger and have a larger scope that
|It is usually small in size and limited|
to a location or place.