Identify the type of organisation which is not deliberately created but emerges spontaneously.

Informal organisation

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 has no set of behaviour as there is no rigid rules and regulations. An informal organisation originates from within the formal organisation as a result of personal interaction among employees. It emerges spontaneously and is not deliberately created by the management.

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.  It is deliberately designed by the top management to facilitate the smooth functioning of the organisation. In formal organisation managers are leaders whereas in informal organisation Leaders may or may not be managers. They are chosen by the group.

Functional structure leads to occupational specialisation since emphasis is placed on specific functions. This promotes efficiency in utilisation of manpower as employees perform similar tasks within a department and are able to improve performance.

Divisional structure-  Divisional structure groups activities on the basis of products. The advantages are integration, product specialisation, greater accountability, flexibility, better coordination and more initiative. The disadvantages are departmental conflicts, costly process, ignoring of organizational interests, increase in requirements of general managers. The divisional head gains experience in all functions related to a particular product. Product specialisation helps in the development of varied skills and prepares the employee for a higher position.