Formal Organization- Is formed when two or more persons come together, they have a

common goal and are willing to work towards this goal. A formal organization has
its own rules and regulations, the rules must be followed by the members (employees
and managers) It also has a system of coordination and authority - a clear
superior-subordinate relationship.

Members of a formal organization have to follow certain rules and regulations.

These rules are made by a formal authority or the superiors. If the members follow
these rules properly, they will be rewarded. However, if they do not, they may be
penalized.

Members of an informal organization does not have to follow any rules and
regulations.