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Classification of Organizations
Organizations are basically
Dream Big, Join IIHM clasi�ed on the basis of
relationships. There are two
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types of organizations formed
10,000+ Alumni Placed in 50+ on the basis of relationships in
an organization
Countries
1. Formal Organization - This is
one which refers to a structure of well de�ned jobs each bearing a measure
of authority and responsibility. It is a conscious determination by which
people accomplish goals by adhering to the norms laid down by the
structure. This kind of organization is an arbitrary set up in which each
person is responsible for his performance. Formal organization has a formal
set up to achieve pre- determined goals.
2. Informal Organization - It refers to a network of personal and social
relationships which spontaneously originates within the formal set up.
Informal organizations develop relationships which are built on likes,
dislikes, feelings and emotions. Therefore, the network of social groups
based on friendships can be called as informal organizations. There is no
conscious e�ort made to have informal organization. It emerges from the
formal organization and it is not based on any rules and regulations as in
case of formal organization.

Relationship between Formal and Informal

Organizations
For a concerns working both formal and informal organization are important.
Formal organization originates from the set organizational structure and informal
organization originates from formal organization. For an e�cient organization,
both formal and informal organizations are required. They are the two phase of a
same concern.

Formal organization can work independently. But informal organization depends

totally upon the formal organization.

Formal and informal organization helps in bringing e�cient working organization

and smoothness in a concern. Within the formal organization, the members
undertake the assigned duties in co-operation with each other. They interact and
communicate amongst themselves. Therefore, both formal and informal
organizations are important. When several people work together for achievement
of organizational goals, social tie ups tends to built and therefore informal
organization helps to secure co-operation by which goals can be achieved smooth.
Therefore, we can say that informal organization emerges from formal
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Organizing Function

 Organizing - Introduction (organizing_function.htm)

 Importance of Organizing (organizing_importance.htm)
 Principles of Organizing (organizing_principles.htm)
 Classi�cation of Organizations (organizations_classi�cation.htm)
 Line Organization (line_organization.htm)
 Line and Sta� Organization (line_sta�_organization.htm)
 Functional Organization (functional_organization.htm)
 Delegation of Authority (delegation_of_authority.htm)
 Importance of Delegation (importance_of_delegation.htm)
 Principles of Delegation (principles_of_delegation.htm)
 Centralization and Decentralization (centralization_decentralization.htm)
 Delegation and Decentralization (delegation_decentralization.htm)
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