The Role of Authority: Formal and informal organization

The manner in which authority is used to maintain coordination in orga- nization has already been discussed. Procedural coordination—the speci- fication of the lines of authority, and the spheres of activity and authority of each organization member—creates a formal organization, a set of abstract, more or less permanent relations that govern the behavior of each participant. It will be noticed that authority enters into the formal organization in two ways: first, the authority of those individuals who exercise control over the group is employed to establish and enforce the scheme of formal organization; second, the scheme of formal organization itself prescribes the lines of authority and division of work that shall be followed in carrying out the work of the organization.

To illustrate, Acts of Congress may set up a Department of Agriculture, specify the general departmental organization, and the responsibilities of the agency. The Secretary of Agriculture, deriving authority structure within the department, dividing work, and further delegating his authority.

In addition to allocating zones of activity and establishing authority relationships, the scheme of formal organization may also establish pro- cedures and lines of communication. The body of regulations will establish who may employ or fire whom; who will give orders to whom; who is responsible for particular jobs; whose signature a particular type of decision must have; and so forth. For the most part, these relationships can be described rather abstractly, without reference to the particular content of the organization’s work.

This formal scheme of organization will always differ from the orga- nization as it actually operates in several important respects. First, there will be many omissions in it—the actual organization will exhibit many interpersonal relationships that are nowhere specified in the formal scheme. The vice president in charge of sales frequently plays golf with the comptroller, and on these occasions they discuss business problems. Second, the interpersonal relations in the organization as it operates may be in actual contradiction to the specifications. The operator of a lathe may refuse to accept his foreman’s instructions as to the speed at which he should operate his machine on a particular job. The organization scheme may provide that Department A will be informed of certain decisions made in Department B, but this is not done.

The term “informal organization” refers to interpersonal relations in the organization that affect decisions within it but either are omitted from the formal scheme or are not consistent with that scheme. It would probably be fair to say that no formal organization will operate effectively without an accompanying informal organization. Every new organization must have its initial “shakedown cruise” before it will run smoothly; and each new organization member must establish informal relations with his colleagues before he becomes a significant part of the working organization.

Even if it were desirable, the formal structure could not be specified in such detail as to obviate the need for an informal supplement. On the other hand, the formal structure performs no function unless it actually sets limits to the informal relations that are permitted to develop within it. In particular, it is an important function of the formal organization to prevent the development of organization politics—struggle for influence and authority— to a point that would be deleterious to the functioning of the organization; and a further function to detect and eliminate unnecessary duplication and overlapping in the work of the parts of the organization. Perhaps a more positive function of the formal, in relation to the

nance of adequate channels of communication may both relieve the need for the growth of informal channels, and encourage cross-fertilization and attitudes of cooperation within the informal structure.

Source: Simon Herbert A. (1997), Administrative Behavior, Free Press; Subsequent edition.

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