Business 101: Principles of Management

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Have you ever thought about how important the relationships you have with your coworkers are to your organization? This lesson will discuss the common elements of informal organizations including their characteristics, informal groups, and the grapevine.

Where Formal Meets Informal Structure in Organizations

We form relationships with others for a variety of reasons. In the workplace, the relationships that we form are a part of the informal organizational structure, or the naturally forming social network of employees. While the formal organizational structure can be seen in the organizational chart or hierarchy, the informal organization is not explicitly stated. The formal organizational structure provides the much-needed overarching framework, but it is the informal structure that fills in the gaps with connections and relationships that illustrate how employees network with one another to get work done.

Informal structure refers to the naturally-forming social network of employees.

Essentially, in the formal organization, the emphasis is on organizational positions and formal power, whereas in the informal organization, the focus is on the employees, their relationships, and the informal power that is inherent within those relationships. This lesson will discuss the common elements of the informal organization, including characteristics, informal groups, and the grapevine.

Informal Organizations

Again, an informal organization is the social structure that connects employees and directs how they work with one another in practice. The idea of the informal organization was first introduced by Chester Bernard, who was a pioneer of management theory and organizational studies. Bernard compared the informal organization to a clique, or an exclusive group of people that naturally forms over time.

The idea of the informal organization was first introduced by Chester Bernard.

Much like a clique, these informal groups are characterized by personal relationships that unite them rather than official ones. The informal structure of an organization is made up of a dynamic and fluid set of personal relationships, communities of shared interest, and social networks that arise as employees associate with one another in a workplace setting. How employees think, behave, and interact with one another in an informal organization is based on those personal relationships.

Because the informal structure of an organization is based on informal groups of friendships, cliques, and social circles, there really is a strong emotional motivation to create strong relationships between organizational members. People make these connections freely and sometimes spontaneously in a formal setting so that they can share their likes, dislikes, commonalities, feelings, and emotions with one another.

People connect in formal settings to share likes, dislikes, feelings and emotions.

Just think about how monotonous your job would be if you weren't able to have relationships with your coworkers; we spend at least 8 hours of our day with these individuals, which is more than many of us spend with our friends and our family. Take those relationships out of your workday and suddenly those 8 hours just got a lot longer.

Additionally, the informal structure creates unique networking opportunities for employees at any level. Individuals, regardless of formal rank, can benefit greatly from their participation in informal groups. Frontline and mid-level workers can network to become more efficient and knowledgeable about how to harness the informal structure to reach organizational goals. Top-level managers can benefit from finding ways to integrate the informal structure into the formal structure to increase knowledge-sharing and decision-making processes.

The Grapevine

At the heart of the informal organization is communication; it's the conversations that occur in the break room, down the halls, during the carpool, and in between work that allows the relationships of informal groups to develop. Of course, electronic communication such as email and instant messages are also used to facilitate communication among informal group members.

Chester Bernard believed that informal organizations served a fundamental role in how information is shared in an organization through what is referred to as the grapevine. The grapevine includes all informal conversations that occur between organizational members that are not officially sanctioned. This social network of employees does not discriminate against individuals' organizational titles or authority; rather, it can facilitate information upward, downward, and horizontally.

The grapevine includes informal, unsanctioned conversations between organizational members.

Like most rumors or gossip, the grapevine is often spontaneous, fast, and, once started, difficult to stop. While the grapevine is important to give employees a release from organizational pressures, a manager must be sure to monitor the grapevine and intervene when incorrect or damaging information is being transmitted.

Lesson Summary

Let's review. An informal organization, which was first introduced by Chester Bernard, refers to the social structure that connects employees and directs how they work with one another in practice. The formal organizational structure provides the much-needed overarching framework, but it is the informal structure that fills in the gaps with connections and relationships that illustrate how employees network with one another to get work done. Inside every informal organization are informal groups and the grapevine.

Informal groups are characterized by personal relationships, communities of shared interest, and social networks that arise as employees associate with one another in a workplace setting. How employees think, behave, and interact with one another in an informal organization is based on those personal relationships.

The grapevine includes all the informal conversations that occur between organizational members that are not officially sanctioned. This social network of employees does not discriminate against individuals' organizational titles or authority; rather, it can facilitate information upward, downward, and horizontally.