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Management Structure & Organisations



Informal/formal organisations

Equations are omitted for technical reasons - download the original pdf

Within any company there are two types of organisation - the formal structure and the informal structure. Both effect the organisation and relationships between staff. The formal organisation refers to the formal relationships of authority and subordination within a company. The primary focus of the formal organisation is the position the employee/manager holds. Power is delegated from the top levels of the management down the organisation. 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. The informal organisation refers to the network of personal and social relations that develop spontaneously between people associated with each other. The primary focus of the informal organisation is the employee as an individual person. Power is derived from membership of informal groups within the organisation. The conduct of individuals within these groups is governed by norms - that is, social rules of behaviour. When individuals break these norms, other members of the group impose sanctions on them. 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.
Contents of
Management Structure & Organisations

1 Organizational Structures
2 The need to delegate
3 Management and Organisational Structures
4 Span of Control
5 The need for a line structure
6 Flat and tall organisational structures
7 Alfred Sloan, Federal decentralisation
8 Departmentalization and business organisations
9 Organisation by function or product?
10 Matrix structure in businesses
11 Centralised/Decentralised
12 Alfred Chandler, structure follows strategy
13 Informal/formal organisations
14 Joseph Juran, Company wide quality management
15 Elliott Jacques
16 Weber and the issue of Authority
17 The acceptance view of authority
18 Chester Barnard, organizational man

Related articles: (1) Elasticity of Demand, (2) Management Structure & Organisations