Explain the merits and limitations of formal organisation.

Advantages of Formal Organisation:

(i) Easy to Fix Accountability: Since the authority and responsibility of all the employees have been already fixed, inefficient employees can easily be apprehended and in this way their accountability can be fixed.

(ii) No Overlapping of Works: In the formal organisation, everything moves in an orderly manner. Therefore, there is no possibility of any work being left out or unnecessarily duplicated.

(iii) Unity of Command Possible: It is possible to observe the principles of unity of command in view of the presence of scalar chain of authority.

Limitations of Formal Organisation:

(i) Delay in Work: Every activity is bound by rules which causes unnecessary delay in the completion of work.

(ii) Lack of Initiative: In this organisation, the employees have to do what they are asked to do and they do not have a chance of some independent thinking. This, therefore, kills initiative.

(iii) Mechanisation of Relations: The relationship of all the people are defined. This leaves no chance of any mutual interplay and thus the knowledge of other people and their experience cannot be exploited.