Informal Organization

If the formal (or technical) organization is the distribution of roles and responsibilities within an organization as it appears on paper, then the informal (or social) organization is how the organization operates in reality. When emphasizing the informal organization, we draw attention to the patterns of activity and interpersonal relationships that develop inside an organization and that are not reflected in an organizational chart or personnel manual. We focus on what actually happens when organizational members perform (or do not perform) their jobs. The informal organization can work in conjunction with, parallel to, or against the formal organization.

The informal organization can be most directly contrasted with Max Weber's rational-legal bureaucracy, which is intentionally impersonal. There, responsibilities and functions reside in an office and are designed such that anyone with the necessary skills can occupy the office, learn how to perform its function, and do so with little variation in outputs. In contrast, the informal organization is intensely personal. Individuals may occupy roles and offices, but they bring to those offices their own interests, values, and assumptions. Their organizational behavior is as much a function of their personalities as it is their formal duties. Workers develop friendships (and enemies), trusted sources of information, and preferences for how to accomplish assigned tasks that may or may not support the formal organization.

The informal organization was first noted in the Hawthorne experiments of the early 1930s, where researchers noted the presence of a social organization in addition to the technical one that governed worker behavior. The social organization was structured and orderly, just as the formal organization was, and in this case worked to counter organizational efforts to structure the work process. Chester Barnard's work argues that an executive's work is chiefly concerned with shaping the social organization so that it works in conjunction with the technical organization. Indeed, the modern emphasis on organizational culture, mission statements, and efforts to empower workers can be seen as attempts by managers to structure the informal organization so that it reinforces rather than counteracts the technical core of the organization.

The informal organization fell out of favor as systems analysis in general declined in popularity in the 1960s. Its legacy, however, can be seen in more recent work on institutional theory and network analysis. Institutional theory views the organizational world as a construct of the ideas and conceptions of its members; socially created meanings and normative rules for acceptable behavior provide the basis for authority and decision making within the organization. Network analysis focuses on the interaction of culture, human agency, and social structure.