| Basis | Formal Organisation | Informal
Organisation |
| 1. Meaning | If refers to the structure of
well-defined authority and
responsibility. | It refers to the network
of social relationships
which develop
automatically |
| 2. Nature | Rigid & Stable | Flexible and unstable |
| 3. Authoriy | Arises by virtue of position
in management. | Arises out of personal
qualities. |
4. Adherence to
rules | Violation of rules may
lead to penalties and
punishments. | No such
punishments. |
5. Flow of
communication | Takes place through the
scalar chain. | Not through a planned
route. It can take place
in any direction. |
| 6. Purpose | To achieve planned
organizational objectives | To satisfy social and
cultural needs and
fulfil common interest. |
