CLASS LECTURE: 02 & 03

Organization & Management (OM)

PRACTICE QUESTIONS

1) What do you mean by formal organization and informal organization? What are
the weaknesses of informal organization? Is informal organization necessary?
Give reasons.

2) Explain how an informal organization affects an organization both favorably and

adversely. Is informal organization is necessary? Give reasons for your answer.

3) What are key forces of Organizational behavior? As a unit manager of X Bank

how can you apply these forces?

4) Describe in brief the fundamental concepts those are the basis of Organizational
Behavior. Have these concepts applicability in the context of Bangladesh? Justify
your answer.
5) Discuss elaborately the key forces of Organizational Behavior. Among the key
forces which one is the most important force? Give reasons for your answer.

6) Briefly discuss the models of organizational behavior. How do you find their
applicability in Bangladesh?

7) What is meant by quality of work life? How can you improve the quality of work
life?

8) Define the behavioral approach of leadership style. Which one among them do you
think best for the organization?
FORMAL ORGANIZATION & INFORMAL ORGANIZATION

Figure 1:FORMAL & INFORMAL ORGANIZATION

INFORMAL ORGANIZATION

Elements of the Formal and Informal Organization

Formal Organization Informal Organization

• Hierarchy of Authority • Hierarchy of Friendships

• Division of Labor • Division into Cliques

 • Formalization • Informal Norms and Procedures

• Impersonality • Personal Relations

• Formal Communication • Informal Communication

• Formal Leadership • Informal Leadership

What are the weakness/disadvantages/limitations of informal organizations?

Disadvantages
Informal organizations also possess the following potential disadvantages and problems that
require astute and careful management attention.

1) Resistance to change

2) Role conflict

3) Rumor

4) Conformity

Resistance to change

Perpetuation of values and lifestyle causes informal groups to become overly protective of their
"culture" and therefore resist change. For example, if restriction of output was the norm in an
autocratic management group, it must continue to be so, even though management changes have
brought about a more participative administration. This Culture make employees more Rigid.
 Role conflict

The quest for informal group satisfaction may lead members away from formal organizational
objectives. What is good for and desired by informal group members is not always good for the
organization. Doubling the number of coffee breaks and the length of the lunch period may be
desirable for group members but costly and unprofitable for the firm. Employees' desire to fulfill
the requirements and services of both the informal group and management results in role
conflict. Role conflict can be reduced by carefully attempting to integrate interests, goals,
methods, and evaluation systems of both the informal and formal organizations, resulting in
greater productivity and satisfaction on everyone's behalf.

Rumor

The grapevine dispenses truth and rumor with equal vengeance. Ill-informed employees
communicate unverified and untrue information that can create a devastating effect on
employees. This can undermine morale, establish bad attitudes, and often result in deviant or,
even violent behavior. For example, a student who flunks an exam can start a rumor that a
professor is making sexually harassing advances toward one of the students in class. This can
create all sorts of ill feelings toward the professor and even result in vengeful acts like "egging"
the residence or knocking over the mail box.

Conformity

Social control promotes and encourages conformity among informal group members, thereby
making them reluctant to act too aggressively or perform at too high a level. This can harm the
formal organization by stifling initiative, creativity, and diversity of performance. In some
British factories, if a group member gets "out of line", tools may be hidden, air may be let out of
tires, and other group members may refuse to talk to the deviant for days or weeks. Obviously,
these types of actions can force a good worker to leave the organization.
Importance/Benefits/Advantages of Informal Organization

Informal organization has the following benefits:

1.    Promotes social and cultural values:

Members of informal organization share common thoughts, social and cultural beliefs. Their
interests are promoted which adds to the strength of the organization and a commitment to
accomplish its formal goals.

2. Relief to top managers:

Social interactions lead to cooperation and coordination amongst people of different groups. It
helps top managers achieve their formal goals efficiently. They are relied o the botheration of
inspiring workers to work.

3. Supplement to managers’ capacities:

Sometimes managers are unable to awake official decisions without the support of theist. People
of informal organization help managers by providing them the help and support that cuts across
official chain of command.

4. Social satisfaction and security:

Members satisfy their social needs of interaction, recognition and acceptance by others in
informal organist ions. Their needs of friendship, love and support are satisfied in these organs
tons.
5. Communication:

Communication travels much faster in informal transitions than formal organization. People
discuss their work and non-work reacted problems with each other and find solutions without the
support of superiors.
6. Better relationships:

If managers of formal organization develop and maintain cordial teat ions with managers of
informal organization, it promotes and environment of understanding. This helps to achieve
forma goals of the organization efficiently.

7. Solve work-related problems:

People of different department’s discs their work-related problems and solve them on their own
without waiting for instruction of superiors of their departments. A worker of sales department,
for example, can known details about production from his friend in the production department
rather than his seniors in the sales department.

8. Promotes creativity:

People get a chance to exploit their creativity and work according to their judgment and skills
without waiting for superiors’ instruction. They think of new ideas and apply them in practice
without the fear of rejection by their superiors.

9. Self-control:

Employees frame their own targets and self control their activates. Control need to be exercised
from the top.

10. Restraint on manager’s discretion:

Informal origination checks wrong acts of managers. Managers cannot frame goals, policies and
plans not acceptable to members of informal organizations provide them relief against official
boredom and tiredness. The provide them an outlet for satisfying their needs of interaction, love
and friendship.

12. Quick feedback to managers:

Managers can get quick feedback on their official decisions from member through informal
channels of communication. This helps in knowing how well their policies are bating accepted
and implemented by organist members.

3)What is Organizational Behavior? What are key forces of Organizational

behavior? As a unit manager of X Bank how can you apply these forces?

Organizational Behavior

Organizational behavior is a scientific discipline in which a large number of research study and
conceptual developments are constantly adding to its knowledge base. It is also an applied
science, in that information about effective practices in one organization is being extended to
many others. It provides a useful set of tools at many levels of analysis. For example, it helps
managers look at the behavior of individuals within an organization. It also aids their
understanding of the complexities involved in interpersonal relations, when two people (two co-
workers or a superior-subordinate pair) interact. At the next level, organizational behavior is
valuable for examining the dynamics of relationships within small groups, both formal teams and
informal groups. When two or more groups need to coordinate their efforts, become interested in
inter group relations that emerge. Finally, organizations can also be viewed, and managed, as
whole systems that have inter organizational relationships. There are four goals or objectives of
studying organization behavior-

Goals or objectives of studying organization behavior

1) Describe
2) Understand
3) Predict
4) Control

Organizational behavior starts with a set of fundamental concepts revolving around the nature of
people and organizations. With regard to people, there are six basic concepts:
Six basic concepts

1) Individual Difference.
2) Perception.
3) A Whole Person.
4) Motivated Behavior.
5) Desire for Involvement.
6) Value of the Person.

With regard to the nature of organizations, the three key concepts are that they are social
systems, they are formed on the basis of mutual interest, and they must treat employees ethically.
1) Social Systems.
2) Mutual Interest.
3) Ethics.