Social norms, relationships, and interactions between people in a company are examples of informal organisation, while the rules, regulations, and guides that govern standard operating procedures in a company are examples of formal organisation. Formal organisations usually have rules written down in official documents like contracts and rulebooks. Informal organisations, on the other hand, include the social interactions that happen between people who work at the same company.
The way businesses work and run is affected by both formal and informal organisation, but in different ways. Formal organisations have rules and regulations that people must follow or face consequences like being reprimanded or even being fired. Formal organisation is more scientific and can be compared to the framework that houses and buildings are built on. Formal organisation doesn’t have any life or feelings, but it does help organisations stay together. Formal organisation helps to define and define the roles and tasks that people are expected to do in a company. Formal organisation can be used to divide work tasks among people with different skill levels (such as labourers from upper-level managers and CEOs). On the other hand, informal organisation is more dynamic. This organisational structure takes into account social norms, such as how people should dress and how they should interact with other people and groups within the organisation. Like formal organisation, informal organisation can make companies stronger and more effective when people work together, but it can also make people feel like they are on different teams.
