Formal organization refers to the predefined structure of jobs and roles within a company based on authority, responsibility, and accountability. Informal organization refers to the social networks that form between employees based on friendship, where people share feelings and emotions. The key differences between formal and informal organizations are that formal organizations are deliberately designed to achieve objectives, have a rigid hierarchical structure, and prescribe behaviors, while informal organizations originate spontaneously from social interactions to fulfill social needs, have loosely structured roles based on human relationships, and develop social norms organically.