1. Formal System:
A formal system refers to a structured, standardized, and documented set of rules, procedures, policies, and processes that govern the operations and activities within an organization. These systems are designed deliberately and explicitly defined to ensure consistency, efficiency, and compliance. Formal systems are often characterized by the following:
a) Documentation: Formal systems are well-documented, with written policies, procedures, and protocols.
b) Hierarchy: They typically follow a hierarchical structure, with clear lines of authority and reporting relationships.
c) Standardization: Formal systems aim to standardize processes and operations to achieve uniformity and predictability.
d) Control: They include mechanisms for monitoring, measuring, and controlling performance.
e) Legal and Regulatory Compliance: Formal systems often serve to ensure compliance with legal and regulatory requirements.
2. Informal System:
Informal systems, in contrast, are unwritten and implicit understandings, norms, behaviors, and practices that emerge and evolve within an organization over time. They are not explicitly defined or documented but are rather shaped by culture, social dynamics, and shared values. Informal systems can include:
a) Communication Channels: Informal networks and channels of communication that bypass formal hierarchies.
b) Unwritten Rules: Unspoken norms and expectations that guide behavior and interactions.
c) Social Structures: Informal groups, alliances, and power dynamics that influence decision-making.
d) Shared Beliefs: Unwritten or tacit assumptions and beliefs that shape organizational behavior.
e) Networking: Informal connections and relationships that provide access to resources and support.
Differences between Formal and Informal Systems:
a) Structure: Formal systems are structured, while informal systems are fluid and adaptable.
b) Documentation: Formal systems are documented, while informal systems are unwritten.
c) Authority: Formal systems rely on formal authority, while informal systems rely on social influence.
d) Flexibility: Formal systems are less flexible, while informal systems offer greater flexibility.
e) Acceptance: Formal systems may face resistance to change, while informal systems are more adaptable and can evolve more easily.
Both formal and informal systems coexist within organizations and can interplay to influence organizational dynamics, decision-making, problem-solving, and overall performance. While formal systems provide structure, control, and compliance, informal systems offer adaptability, creativity, and social support. Finding the right balance between the two is crucial to fostering efficiency, innovation, and a positive organizational culture.