The Theory of Informal Organization

Informal organization is defined as the aggregate of human interactions. Informal organizations are created spontaneously everywhere personal contacts and interactions take place. Informal organization is different from formal organization in that informal organization does not have a common purpose; however, it leads to some common results. For example, the major effect of informal organization is to establish an organization culture by creating customs, mores, languages, and so on. Formal and informal organizations are in inseparable and interdependent relationships. Informal organization is the precondition for formal organization; once a formal organization is established, it creates informal organizations within it. Then, the informal organizations vitalize the formal organization and increase the willingness to cooperate through improving cohesiveness and the loyalty of contributors. It is noted that a formal organization works well with the duality of an informal organization. In fact, an informal organization functions at all levels of a formal organization; an informal executive organization is a good example of this.