Organisation
In a growing technology firm, the CEO decided to reorganize operations to improve efficiency. The company adopted a formal organization structure by clearly defining roles and responsibilities for each employee, creating specialized departments such as R&D, Marketing, and Customer Support. Job descriptions, reporting relationships, and workflows were documented in an organizational chart.
However, alongside this structure, the company recognized the importance of informal organization—social networks and personal relationships among employees. For example, employees from different departments formed a cross-functional team to brainstorm innovative ideas over coffee breaks, fostering collaboration beyond formal channels.
To ensure smooth operations, the CEO implemented delegation of authority by empowering department heads to make decisions within their domains, such as approving budgets and setting project timelines. This delegation freed the CEO to focus on strategic planning. However, the CEO made it clear that accountability remained with the department heads—they were responsible for ensuring tasks were completed and goals met.
This combination of structured formal processes, informal collaboration, and clear delegation of authority improved decision-making, enhanced employee morale, and boosted the firm’s overall productivity.
The primary characteristic of an informal organization is:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Informal communication
Option (1) Responsibility fixation — Incorrect. Fixing responsibility for each job is a feature of the formal organisation, where duties are laid down by management.
Option (2) Unity of Command — Incorrect. One boss for each employee is a principle of the formal structure. The informal organisation has no set chain of command.
Option (3) Informal communication — Correct. The informal organisation is the network of social relationships that grows when people interact beyond their official roles. It has no fixed lines of communication. Information does not follow the scalar chain and can flow in any direction, as with the coffee-break team in the case.
Option (4) Adequate recognition of tasks to be performed — Incorrect. Clear description of tasks comes from the formal organisation, through job descriptions and the organisation chart.
NCERT (2026-27 Edition): “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. When people have frequent contacts they cannot be forced into a rigid formal structure. Rather, based on their interaction and friendship they tend to form groups which show conformity in terms of interest. Examples of such groups formed with common interest may be those who take part in cricket matches on Sundays, meet in the cafeteria for coffee, are interested in dramatics, etc. Informal organisation has no written rules, is fluid in form and scope and does not have fixed lines of communication. …” |