HOw important are Informal groups in organization?

Dr.R.Maria Inigo & Ms.Firdouse Jahan


          In the real world, of course, many formal groups have an informal dimension. As they work together, the members develop relationships, and modify their work roles to suit themselves and other members of the group. Sometimes, the strength of their bonds can actually threaten or undermine the formal system of the organization. This happens particularly if the task of the organization is dangerous.

           A group of Individuals meet: if they form a group, then they will informally allocate roles among themselves depending on individual preferences, and occasionally on talents. This collection of roles makes a system possible, and so occasionally they may undertake a task together. It is the preferences of the Individuals which are paramount: If they are not getting anything out of their group membership, they may well drop away. Tasks are incidental.

           Within any company there are two types of organization – the formal structure and the informal structure. Both effect the organization and relationships between staff. The formal organization refers to the formal relationships of authority and subordination within a company. The primary focus of the formal organization is the position the employee/manager holds. Power is delegated from the top levels of the management down the organization. Each position has rules governing what can and cannot be done. There are rewards and penalties for complying with these rules and performing duties well.

 Formation of Informal groups

           Informal structures are sometimes created intentionally, but more often they appear ‘by default’. Since they are hidden, and often personal, they are very difficult to challenge, or even to identify and discuss. This is one of the major causes of conflict in activist and volunteer groups. It often takes up a lot of time and energy at the expense of the ideals pursued and projects undertaken, and has a demoralizing effect on individual groups and on the movements they are involved in.

         Often these formal structures will be set out on paper in the form of organizational charts. However, in the course of time an informal structure develops in most organizations which is based on the reality of day-to-day interactions between the members of the organization. This informal structure may be different from that which is set out on paper.
Informal structures develop because. People find new ways of doing things which they find easier and save them time. Patterns of interaction are shaped by friendship groups and other relationships. People forget what the formal structures are. It is easier to work with informal structures.

          Sometimes the informal structure may conflict with the formal one. Where this is the case the organization may become less efficient at meeting its stated objectives. However, in some cases the informal structure may prove to be more efficient at meeting organizational objectives because the formal structure was badly set out.

 The informal organization refers to the network of personal and social relations that develop spontaneously between people associated with each other. The primary focus of the informal organization is the employee as an individual person. Power is derived from membership of informal groups within the organization. The conduct of individuals within these groups is governed by norms – that is, social rules of behaviour. Despite the explosion of information that is accessible through the Internet and databases, people still rely heavily on their networks for help with their work.

 Benefits for organization

           Organizations also benefit from informal structures based on friendship groups. When managers nurture these informal groups and mould them into the formal structure this can lead to high levels of motivation for the staff involved. Clearly, the informal structure can be either beneficial or detrimental to the functioning of the company or both. People who work in an organization are only human and their effectiveness may depend on their personal relations with those around them. An obvious illustration is that if a manager is aware of a personality clash between employees he must respond. Else the effectiveness of the organization will be in question.

   Informal networks are important sources of job satisfaction and retention. Many employees today join and commit to local sets of relationships while feeling no particular allegiance to the corporation as a whole. Informal networks are especially important in knowledge-intensive sectors, where people use personal relationships to find information and do their jobs.

 The Process Within informal groups

           Norms are of great importance to the informal group in controlling behaviour and measuring the performance of members. Because norm violations threaten a group’s existence, departures from the norm usually carry severe sanctions. The members must either conform or severe their group affiliation. The latter action is unlikely, especially if the individual values group membership to satisfy certain needs. In informal groups both formal and informal norms exist. At such situation the informal norms transcend the formal. At times, when norms conflict with organization objectives., organizational effectiveness suffers.

           Members of informal groups may be sometimes unaware that the norms of the group influence their behaviour. Norms are particularly potent because without knowing it members would not even think of acting otherwise, norms are that ingrained into their behavior pattern. When individuals break these norms, other members of the group impose sanctions on them.

 Organizational effectiveness through informal structure

           Organizations are composed of individuals and operate within systems. Individuals, organizations, and systems constitute the principal units of analysis of the organizational and management sciences, albeit always from an organizational perspective (i.e., the individuals of interest are within an organization or set of organizations).

           As Morgan (1997) vividly describes, there are numerous ways to conceptualize and model an organization, with profound consequences for criteria of effectiveness. These concepts typically deal with organizational form and structure on the one hand and organizational functions and activities on the other. How the organization is designed and how its functions are defined obviously have important implications for how processes and people are managed. Effectiveness, from the closed, rational system perspective, is achieved through:

    Setting specific goals

    Prescribing and Formalization of rules and roles

    Monitoring conformance to these expectations.

           In order to prevent superiors from behaving arbitrarily or capriciously, the formalization of role expectations for subordinates is combined with a specification of management authority within narrowly prescribed hierarchical authority relations. The organizational and management goal is to increase system rationality and predictability. This system of management is based on the bureaucratic organizational control

           A natural system perspective stresses the need for the organization to harness the minds and hearts of its participants and emphasizes the importance of informal social relations over formal structures (Likert 1961; Weick 1999). In tandem, management science was also gradually moving away from an emphasis on command and control to an emphasis on engaging the hearts and minds of the organizational participants. The human relations perspective, initially associated with Mayo, initiated this view. Mayo (1945) is best known for the pivotal studies, triggered by the famous Hawthorne Effect, that demonstrated commitment and loyalty were often more important than self-interest and formal sanctions in determining the behavior of organizational participants. The human relations school gave rise to a large body of work directed at informal, normative structures; organizational cooperation; organizational culture; leadership; motivation; morale; and, later, teamwork (Barnard 1938; Goffman 1961, 1974; and Peters and Waterman 1982). This management perspective has since been expanded to include efforts to engage not only the hearts and minds of organizational participants but also those of the organization’s customers and external stakeholders (Porter 1985; Powell 1990).

          Rohrbaugh (1983), Quinn and Rohbaugh (1983), and Quinn (1988) noted that organizations were likely to experience tension among organizational effectiveness attributes. All organizations have a need for some level of stability as well as a need to be flexible and adaptable; a need for control and discipline as well as a need to allow some degree of freedom and autonomy; a need for rational formal structures and non-rational informal relations. They concluded that effectiveness depended upon the ability of an organization, and its managers, to strike the right balance among these critical attributes, as required by the organization’s objectives and situation[3].

           Worker effectiveness measurements are based on human behavior Worker effectiveness measurements also indicates how the workplace supports many issues. These metrics are intangibles and measure issues such as:-

    Fostering innovation

    Enhancing communication

    Encouraging learning

    Improving work process

    Expediting decision making

    Understanding and addressing the needs of users

    Attracting and retaining talented employees.

 Assessing informal groups and remedying for effectiveness

           The most important managerial tool available for assessing patterns of relationships in informal networks is called social network analysis. By making critical patterns of interaction visible, social network analysis helps managers give informed answers to several questions such as:

    Does information flow smoothly within a given network?

    Do functional departments or business units collaborate appropriately in taking their services to market?

    Is the collective expertise within a network being leveraged effectively?

           The result of such probing is likely to be improved collaboration at strategic junctures within an organization. Managers can carry out a social network analysis by following six steps:

    Select audience

    Design the questions

    Pose the right questions

    Collect  and analyse data

    Interpret and make remedial action

           Managers should consider how changes in four areas of organizational context can improve collaboration in informal networks.

    Consider the organization’s formal structure.

    Understanding how the formal structure impedes group effectiveness.

    Employee management practices

    Cultural values that prize individual accomplishment over collaborative endeavors


           Executives often assume that communication of any and all kinds, is the essence of an informal network. As a result, they commonly conclude that uniting fragmented networks or developing sparse ones is simply a matter of more and better communication. In organizations with a strong top-down culture, informal networks themselves tend to closely mirror the prevailing pattern of hierarchy; as a result, they lack the flexibility to respond effectively to new opportunities. Some degree of empowerment is necessary in these situations if flexible networks are to evolve.

           Informal groups of employees do much of the important work in organizations today. To help those networks reach their full potential, executives must come to grips with how they really function. The problem is compounded by the fact that most executives do little to systematically assess and support informal groups. They spend vast sums of money for new information systems or to implement better and faster financial- reporting practices but seem less inclined to make the investments that would give them a clear picture of how work is getting done within their organization. That’s usually because executives are bound by myths about informal networks and don’t realize the potential of social network analysis to map important networks and the interventions that might emerge from this perspective. The world is driven in a knowledge-intensive environment where organizations have been significantly restructured. Creating healthier informal networks is a critical job of managers and executives of today.


Source by Dr.R.Maria Inigo