ABC Corporation is a multinational company that manufactures and sells consumer electronics. To ensure smooth operations, it follows a well-defined organizing process, which includes identifying tasks, grouping similar activities, assigning responsibilities, and establishing reporting relationships.
The company follows a structure where employees are grouped based on their expertise. Departments like Marketing, Finance, Production, and Human Resources operate independently, ensuring specialization and efficiency. However, in its international operations, ABC Corporation adopts a structure where each division operates as a separate entity based on regions such as North America, Europe, and Asia. This helps the company cater to regional market needs effectively.
Within the company, two types of organization exist. One organization is structured with clearly defined roles, responsibilities, and hierarchy. On the other hand, the other organization consists of unofficial relationships among employees, such as friendships and personal networks, which enhance teamwork and communication beyond the official chain of command.
To ensure smooth delegation of tasks, authority and responsibility are transferred to subordinates. It empowers employees, reduces the workload of senior managers, and enhances decision-making efficiency.
Through a combination of well-structured organizational processes and flexible informal interactions, ABC Corporation maintains operational efficiency while fostering a collaborative work environment.
ABC Corporation has__________
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Formal and Informal organization both.
Option (1) Formal and Informal organization both. — Correct. The passage describes two organisations inside ABC. One has clearly defined roles, responsibilities and hierarchy: that is the formal organisation, the official structure created by management. The other is made of friendships and personal networks among employees, beyond the official chain of command: that is the informal organisation, which grows on its own out of social contact. Every organisation of any size has both.
Option (2) Informal organization but not formal organization. — Incorrect. ABC does have a formal structure with defined roles and hierarchy.
Option (3) Formal organization but not informal organisation. — Incorrect. The friendships and personal networks are an informal organisation.
Option (4) Only formal organisation. — Incorrect. For the same reason as Option (3): the informal organisation is also there.
NCERT (2026-27 Edition): “Formal and Informal Organisation In all organisations, employees are guided by rules and procedures. To enable smooth functioning of the enterprise, job description and rules and procedures related to work processes have to be laid down. This is done through the formal organisation. Formal organisation refers to the organisation structure which is designed by the management to accomplish a particular task. …” “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. …” |