Which of the following is a limitation of formal organisation?

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → It may fail to give adequate recognition to creative talent, because of its rigidly laid down policies.

Option (1) It may spread rumours and become a destructive force against the interest of the organisation. — Incorrect. This is a disadvantage of informal organisation. Its channels can spread rumours, which work against the organisation’s interest.

Option (2) It may put pressure on members to conform to group expectations that go against organisational interests. — Incorrect. This is also a disadvantage of informal organisation. The group pressurises members to follow its norms, which harms the firm when those norms go against its interests.

Option (3) It may resist the changes that management wants to make, which may delay or restrict growth. — Incorrect. When the informal organisation opposes changes, management may fail to implement them, and this resistance to change may delay or restrict growth. It is a disadvantage of informal organisation.

Option (4) It may fail to give adequate recognition to creative talent, because of its rigidly laid down policies. — Correct. Formal organisation works by rigidly laid down policies and allows no deviation from them. So poor practices may not give adequate recognition to creative talent.

NCERT (2026-27 Edition): “Formal and Informal Organisation … Limitations: The formal organisation suffers from the following limitations: …
(b) Poor organisation practices may not provide adequate recognition to creative talent, since it does not allow any deviations from rigidly laid down polices.
(c) It is difficult to understand all human relationships in an enterprise as it places more emphasis on structure and work. Hence, the formal organisation does not provide a complete picture of how an organisation works.”

“Informal Organisation … Disadvantages: The informal organisation has certain disadvantages. Some of them are as follows:
(a) When an informal organisation spreads rumours, it becomes a destructive force and goes against the interest of the formal organisation.
(b) The management may not be successful in implementing changes if the informal organisation opposes them. Such resistance to change may delay or restrict growth.
(c) It pressurises members to conform to group expectations. This can be harmful to the organisation if the norms set by the group are against organisational interests. …”