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Reasons for the Emergence of Informal Organizations

Basically the informal organization emerges because the formal structure does not satisfy all employee and organizational needs. Formal organizations fail to describe the dynamic relationships between members in the organization. Informal relationship developed within any formal structure and managers do not have a choice. It is important for the managers to understand the informal organization and channel its energies toward organizational goals. The informal organization presents many opportunities for motivating employees, resolving conflicts and creating worker satisfaction.


1.         Psychological fatigue of routine tasks: Simple and routine tasks in the office and in the factory can have an undesirable influence on the workers. Under such conditions personnel can become bored by their tasks and indifferent to their work an may experience psychological fatigue. Unable to relate their jobs to final output, workers suffer from feelings of meaninglessness, workers also feel powerless to control factors within the environmental. Under such distasteful conditions informal relations in the organization server to preserve the organization from the self destruction that would result from literal obedience to formal polices, rules, regulations and procedures. Informal organizations fill the psychological void I vacuum created by dull, boring and monotonous jobs. It has the capacity to overcome deficiencies built into the formal structure.


2.         Desire to socialize with others: Most people like to socialize in order to satisfy

more of their social and ego needs on the jobs. “Formal organizations are systems of medieval torture which suppress and subjugate their victim – the individual. He lives in helpless conformity, stripped of his self-esteem in a phony and artificial environment. There is no challenge and chance for psychological fulfillment. Informal organizations provide social satisfaction. Affiliation with the informal groups is more than just friendship; it is a sense of belonging. It gives a man recognition, status and future opportunity to relate too others. Informal organization acts like a ‘safety valve’ to release daily tensions and frustrations on their troubles and will give an opportunity to ventilate their grievances.


3.         Source of Protection: Informal organization offers a powerful protection against threatening and oppressive forces. Informal organization increases the feeling of security; it restores some internal and external human values lost because of efforts of achieve efficiency by oversimplifying work. Informal organization serves as a balancing function by giving satisfaction to individual members that the formal structure cannot give. It also assures members a reasonable degree of stability in their interpersonal relationships. In an informal organization the rules for behavior are set by the members not by the management.


30.8.1 Characteristics


1. Goals. The formal organization has its own goals, objectives and authority patterns and these factors may or may not coincide with those of formal structures.


2. Membership. Individuals in an informal organization join on the basis of commonality of interest and willingness to be co-operative and to conform. Quite often groups pressurize the members to conform to the group norms. These norms are established to achieve the goals of the group and to be accepted forces members to conform group norms. It is reported that the Bank wiring room study of the famous Hawthorne Studies, one of the inspectors failed to observe the group norms and in an attempt to punish him, the workers adjusted his testing equipment so as to render it ineffective. There is substantial evidence to support a statement, that when an individual takes a stand publicly he is more likely to be influenced by group norms when he arrives at a conclusion in private. Individuals may than have overlapping memberships in multifarious informal groups.


3. Leadership. Informal leader will arise from the situation. That person with the greatest expertise relative to the situation at hand will emerge as a leader. As a result a group may select numerous individuals to serve in specific leadership capacities depending on the situation. Informal leaders are selected normally, on the basis of respect, admiration, and the capacity to sit through the tasks successfully for the benefit of the groups. Informal leadership is a conditional offer. If the informal leader does something that is not approved by the group, the group will strip him off his position.


4. Communication. Informal organization develops its own communication network, popularly known as grapevine. The grapevine has got a tremendous capacity to carry information with helpful and harmful effects to the organization in an unpredictable way. According to Davis, the cluster approach adequately sums up the process of grapevine. In the cluster approach a message is communicated by an originator to two or three individuals, who in tum, each pass the message along to two or three others, who do the same thing. The grapevine is flexible and personal. It spreads the information faster than the formal communication channel. Unfortunately, what the grapevine possesses in speed, it usually lacks in accuracy. It can spread rumors and false information as rapidly as it can spread facts.


5. Status system. Status is important in organization because it satisfies the basic human need for personal identification. It plays a very useful role in the interaction between the members of the group. Knowledge about another’s status helps us to behave in a proper way; we are in a better position to structure, understand and predict the social interactions that are important to us. Status is determined by other external factors (education, age, personality, skills) and internal factors (location of office, secretaries, parking space etc).


Members in an informal organization can improve their communication depending on the status of the individual with whom they are communication. For example students will be very careful about their mannerisms and words while talking to the principle (higher status). The same is not true when they converse with their friend (equal status).



30.8.2 Advantages and Disadvantages of Informal Organization


The values of the informal organization which can make a great contribution to organizational effectiveness are outlined below:


1. Benefits to work groups: The informal organization protects the individual against arbitrary treatment by management against harsh work environments. As pointed out by Herbert, “the informal organization allows human relationships and satisfactions to be super imposed over the Spartan structure created by technology and organization, adding a human dimension to the formal organization”. The informal structure counteracts the cold and inhuman qualities of the formal structure by providing a means for developing friendships and being accepted by fellow workers. It provides satisfaction and stability to work groups.


2. Supports formal structure: The formal structure is viewed as one side of the “organization coin” while the informal structure is viewed as the other. The informal organization helps the formal structure would be like a “house built on sand”. Informal systems “blend with formal systems to make a workable system for getting the work done”.


Formal plans and policies cannot meet every problem in a dynamic situation because they are pre-established a partly flexible. Some requirements can be met better by informal relations, which can be flexible and spontaneous.


3. Useful Communication device: The informal organization provides the management with an additional channel of communication in the form of grapevine. By utilizing the grapevine within the formal structure, management can transmit employee accurate and useful information quickly.


4. Compensates for Managerial Limitations: The informal organization can fill in the managerial gaps by educating people how to really perform the task.


30.8.3 Limitations


Each of the above advantages has a negative aspect as well. The losses accruing from the informal organization are listed below.


1. Works counter to organization objectives: Informal relationships can be employed to pressurize employees to restrict their output, exhibit a disinterest in organizational policies and procedures, cause in subordination, and in general promote unauthorized actions that work counter to the formal organization.


2. Conformity: Informal organization exerts strong pressure for conformity. Conformity can make group members reluctant to act independently, creatively or assertively, for fear of losing group approval and membership. Sometimes, informal group leaders manipulate the group toward undesirable needs. They may block positive contributions from capable people. They may force members to restrict output, to exceed the time limit for coffee break, to indulge in intolerable activities taxing the patience of the management. In this fashion the informal groups become “an instrument of neurotic showers of conflict or non-responsible rattle – rousers using the group for their own selfish ends”.


3. Social costs: Informal organization, undoubtedly, is a safety valve for the frustrations and other emotional problems of work group. Studies have also noted the view that social interaction by alleviating monotony on the job may actually contribute to production. But this is true up to a certain point. Allowing informal groups to engage in gossiping, joke telling and general horse play or idle conversation that satisfy some of the member’s social needs results in higher operating costs.


4. Rumors: Quite often, grapevine is susceptible for use in spreading destructive, distorted, inaccurate and incomplete information cutting across organization, lines with tremendous speed. When employees are not kept informed on matters that directly affect them, they may transmit incorrect information that undermines morale or leads people to make poor and mediocre decisions.


5. Resistance to change: Every group promotes certain cultural values, norms which is considers desirable. In course of time members zealously guard these values resulting in a perpetuation of the status quo. Any intended change by the management forcing alternation of shared values, real or perceived, is vehemently resisted. If the member perceive that a lay off is imminent consequent to the introduction of such policies like rationalization, automation computers etc., they try to stand like a rock resisting such changes with all their might “Perception of threats are just as real in the formation and solidification of an informal organization as an actual threat”.