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1
The informal organisation 
1.1 What is the 'informal organisation'? 
An 
informal organisation 
always exists alongside the formal one. This consists of social relationships, 
informal communication networks, behavioural norms and power/influence structures, all of which may 
'by-pass' formal organisational arrangements. This may be detrimental or beneficial to the organisation, 
depending how it is managed.
An 
informal organisation 
exists side by side with the formal one, whose key structural characteristics 
and features were examined in detail in Chapter 1. When people work together, they establish social 
relationships and customary ways of doing things. Unlike the formal organisation, the 
informal 
organisation
is loosely structured, flexible and spontaneous. It embraces such mechanisms as: 
(a) 
Social relationships and groupings (eg cliques) within – or across – formal structures 
(b) 
The 'grapevine', 'bush telegraph', or informal communication which by-passes the formal reporting 
channels and routes 
 EXAM FOCUS POINT 
This chapter lays the foundation for an understanding of what organisations are, what they do and how 
they do it. Remember that the exam may require you to 
apply
this knowledge. 
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CHAPTER 5
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BUSINESS ORGANISATION, STRUCTURE AND STRATEGY 
 
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(c) 
Behavioural norms and ways of doing things, both social and work-related, which may 
circumvent formal procedures and systems (for good or ill). New members must 'learn the ropes' 
and get used to 'the way we do things here' 
(d) 
Power/influence structures, irrespective of organisational authority: informal leaders are those 
who are trusted and looked to for advice 
1.2 Benefits (or the role of) the informal organisation 
Benefits of the informal organisation for managers include the following.
(a)