(3) Informal organisation

Interaction among people at work gives rise to a ‘network of social relationships among employees’ called the informal organisation. Informal organisation emerges from within the formal organisation when people interact beyond their officially defined roles.

Formal organisation : It refers to the organisation structure which is designed by the management to accomplish a particular task. It specifies clearly the boundaries of authority and responsibility and there is a systematic coordination among the various activities to achieve organisational goals.

Functional structure( Occupational Specialisation) : Grouping of jobs of similar nature under functional and organising these major functions as separate departments creates a functional structure.

Divisional Structure( Product Specialisation) : In a divisional structure, the organisation structure comprises of separate business units or divisions. Divisional Structure is followed in case of Multi Product Company.