The correct answer is Option (1) → Informal organisation.
Interaction among people at work gives rise to a ‘network of social relationships among employees’ called the informal organisation. Informal organisation emerges from within the formal organisation when people interact beyond their officially defined roles.
OTHER OPTIONS
- Formal organisation refers to the organisation structure which is designed by the management to accomplish a particular task. It specifies clearly the boundaries of authority and responsibility and there is a systematic coordination among the various activities to achieve organisational goals. The structure in a formal organisation can be functional or divisional.
- In a divisional structure, the organisation structure comprises of separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit. Divisional structure is suitable for those business enterprises where a large variety of products are manufactured using different productive resources. When an organization grows and needs to add more employees, create more departments and introduce new levels of management, it will decide to adopt a divisional structure.
- Functional structure- Grouping of jobs of similar nature under functional and organising these major functions as separate departments creates a functional structure. All departments report to a coordinating head. For example, in a manufacturing concern division of work into key functions will include production, purchase, marketing, accounts and personnel. These departments may be further divided into sections. Thus, a functional structure is an organisational design that groups similar or related jobs together.
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