Which of the following is not a limitation of formal organisation?

Rigidly laid down policies

The correct answer is option 4- Rigidly laid down policies.

Note: The given answer is as per NTA. However, apparently the given answer is wrong and the correct answer should be Option 1: No clear-cut structure because of the reasons given below.

A formal organisation is created deliberately by management and it always has a clear-cut structure, defined roles, authority, responsibility, and rules. Therefore, “No clear-cut structure” cannot be its limitation because this situation actually describes an informal organisation, not a formal one.

The other options are limitations of a formal organisation:

• Social interaction – Formal organisations focus on rules and procedures, so social needs are often ignored.

• Personal satisfaction – Employees may feel less satisfied because creativity and personal needs are restricted.

• Rigidly laid down policies – Formal organisations follow strict rules and policies, which reduce flexibility.