Read the following passage and answer the following questions.

Progress Ltd. which deals in stationery has been registered with a share capital of ₹1000 crores in New Delhi. The company has a manufacturing unit in Madhya Pradesh and a marketing department in Nashik. The company divided its activities into different departments. The company assigned duties and powers without creating formal authority-responsibility relationship. The entire business started working on gossip and based on personal relations.

Which of the following organisation is followed by the company?

Informal organisation

The correct answer is option 2- Informal organisation.

The company assigned duties and powers without creating formal authority-responsibility relationship. The entire business started working on gossip and based on personal relations- This line shows the informal organisation.

Interaction among people at work gives rise to a ‘network of social relationships among employees’ called the informal organisation. Informal organisation has no set of behaviour as there is no rigid rules and regulations. It can be better understood with the help of the following features:

(a) An informal organisation originates from within the formal organisation as a result of personal interaction among employees.
(b) The standards of behaviour evolve from group norms rather than officially laid down rules and regulations.
(c) Independent channels of communication without specified direction of flow of information are developed by group members.
(d) It emerges spontaneously and is not deliberately created by the management.
(e) It has no definite structure or form because it is a complex network of social relationships among members.