Formal and Informal views of the same organization

In the last blog, we looked at the open system's view of an organization. In today's blog we look at organization in a bit more details and attempt to understand its visible and not so visible aspects.

When we look at an organization, there is the visible part of the organization which includes the goals and objectives, policies, procedures, job descriptions, organizational structures, products and services etc; but when we dive in a bit deeper we find that there exists some underlying beliefs and assumptions, values, perceptions, feelings, norms, informal leadership etc which is not documented nor is easily visible for an outsider is not too acquainted with the business. The first is called the Formal organization and the second is called the informal organization.

Formal Organization indicates the official, legitimate, and most visible part of the organization system. Informal Organization indicates the unofficial and less visible part of the organizational system. We could represent these in the following manner:

The diagram has been adapted from the Fig 1.2 of the reference book used for the discussion

Note: The informal organization began gaining emphasis only after the Hawthorne Studies conducted in the 1920s and 1930s.