Cc106 : Principles of Management (pom)

To the Managers:

• To the Managers:
• (1) Reduces burden.
• (2) If manager is weak, informal group come to his help.
• (3) Helps formal organization in realizing its objectives.
• (4) Additional means of effective & quick communication.

Basis of Distinction	Formal Organization	Informal Organization
Purpose	It is created to achieve pre determined objective	It has no pre determined objectives. It arises due to social interaction of people.
Formation	Formal relations are well planned and are created deliberately.	Informal relations are unplanned and they originate automatically.
Structure	Well structured	Unstructured
Nature	Official	Unofficial
Focus	Positions	Persons
Source of Power	Delegated	Given by group
Leadership	Managers	Informal Leader
Source of control	Reward/Punishment	Social Sanctions

Basis of Distinction	Formal Organization	Informal Organization
Guidelines for behavior	Rules and Procedures	Group Norms
Stability	Stable (Long term)	Unstable (Short term)
Size	large	Small
Flexibility	Rigid Structure	Highly flexible
Communication	Chain of command	Grapevine

Organization Structure refers to the hierarchical arrangement of various positions in the organization.

• Organization Structure refers to the hierarchical arrangement of various positions in the organization.
• Organization Structure defines the relationship between various positions, departments and persons.
• Organization Structure helps in allocating authority and responsibility formally and decides who is to report to whom, who is superior to whom and who are his subordinates.

There are basic Four types of organization structure, which are more popular in the business word. These are;

• There are basic Four types of organization structure, which are more popular in the business word. These are;
• (1) Line Organization
• (2) Functional/Staff Organization
• (3) Line and Staff Organization
• (4) Committee Organization

Business unit is organized not according to functions, but on the basis of responsibility and authority.

• Business unit is organized not according to functions, but on the basis of responsibility and authority.
• Authority flows from the top to the bottom in a line, the responsibility flows in the opposite direction from the bottom to top. So it is known as line organization.