An organization is a collection of people who work together to attain specified objectives.

There are two

types of organization structure, that can be formal organization and informal organization.

An organisation is said to be formal organisation when the two or more than two persons come together
to accomplish a common objective, and they follow a formal relationship, rules, and policies are
established for compliance, and there exists a system of authority.

An informal organisation is formed within formal organisation as a network of personal and social
relationship, which comes into existence when people in an organisation, meet, interact and associate
with each other.

2. Formed by Whom?

A formal organisation is formed by the top level management.

An informal organisation is formed by social forces within the formal organisation.

4. Duties and Responsibilities

In a formal organisation, the duties, responsibilities, authority and accountability of each member is
well-defined.

In an informal organisation, there are no fixed duties, responsibilities, authority, accountability, etc. for
the members.

5. Objectives or Goals

In a formal organisation, the objectives or goals are specific and well-defined. The main objectives of a
formal organisation are productivity, growth, and expansion.

In an informal organisation, the objectives are not specific and well-defined. The main objectives of an
informal organisation are friendship, security, common interest, individual and group satisfaction, etc.

6. Stability

A formal organisation is stable.

An informal organisation is not stable.

7. Channels of Communication

A formal organisation uses formal channels of communication.

An informal organisation uses informal channels of communication (i.e. grapevine)

8. Organisation Chart

A formal organisation is shown on the organisation chart.

An informal organisation is not shown on the organisation chart.

9. Superior-Subordinate Relationship

In a formal organisation, there exist a superior-subordinate relationship.

In an informal organisation, there is no such superior-subordinate relationship.