Explain the advantages and limitations of informal organisation.

Advantages of Informal Organisation: Following are the advantages of Informal Organisation:

(i) Effective Communication: In the absence of any definite course, it is an effective system of communication. Messages can be quickly conveyed from one place to another with the help of this system.

(ii) Fulfills Social Needs: In the informal organisation, people having similarity of thoughts and ideas form a group of their own. All the people in the group stand by one another in all the organisational or personal matters.

(iii) Fulfills Organisational Objectives: In the informal organisation, the subordinates put their ideas before the superiors without any fear or hesitation. It helps the superiors to understand their difficulties and immediate solution of the problem is sought out. Since the problems are easily solved it becomes easier to achieve the objectives of the organisation.

Limitations of Informal Organisation: Following are the limitations of Informed Organisation:

(i) It creates Rumours: All the persons in an informal organisation talk carelessly and sometimes a wrong thing is conveyed to the other person which may bring in horrible results.

(ii) It resists Change: This organisation resists change and lays stress on adopting the old techniques.

(iii) Pressure of Group Norms: In this organisation, people are under pressure to observe group norms. Sometimes the people assembled in informal group lose sight of their objective and all decide to oppose their superiors unanimously. Such a situation adversely affects productivity.