Chapter 12 discusses group dynamics, distinguishing between formal groups established by organizations and informal groups formed through common interests and friendships. It highlights the characteristics and functions of both types of groups, including the differences in power dynamics, communication, and decision-making methodologies. The chapter also addresses the benefits and challenges associated with informal organizations, as well as structured approaches for effective group problem-solving.

1. Chapter 12
Informal
and
Formal Groups

2. GROUP DYNAMICS
GROUP DYNAMICS:
•The social process by which people interact face-to-face in
small groups is called group dynamics.
•Group dynamics refers to the study of forces why people
within a group interact with each other?
• Types of Groups
Formal groups
are established by the organization, have a public identity and a
goal to achieve.
- Organization establishes this group
- It has a public identity
- It has some goals to achieve

3. GROUP DYNAMICS
Informal groups,
which emerge on the basis of common interests,proximity and
friendships.
- It serves some common interests of members
- This group forms based on member’s Proximity
- Friendship exists within this group.
Types of formal groups
1. Temporary work group: Created to accomplish a short-term
task and then disband.
For example: Meeting - The event at which group members
discuss ideas or solves problems is generally called a
meeting.

4. 2. Enduring work group: It is more natural and comparatively
permanent group formed by the organization itself.
For example: Team - This type of group is formed when people
perform task together as part of their job assignments.

5. THE NATURE OF INFORMAL ORGANIZATIONS
Comparison of Informal and Formal Organization
1. The emphasis within informal organization is on people and
their relationships, while formal organization emphasizes
official positions in terms of authority and responsibility.
2. Informal power is attached to a person, while formal
authority attaches to a position and a person has it only when
occupying that position.
3. Informal power is personal, but formal authority is
institutional.
4. Power in informal organization is given by group members,
while formal power is delegated by managers

6. Comparison of Informal and Formal Organization
5. Informal power does not follow the official chain of command, but
formal power follows the official chain of command
6. Informal power is more unstable than formal authority, since it is subject
to the sentiments of people.
7. Informal power is subjective in nature, and hence, informal organization
cannot be controlled by management, but the formal organization can be.
8. Informal organizations tend to remain smaller in order to keep within the
limits of personal relationships, but, formal organizations may grow to
immense size.

7. Comparison of Informal and Formal Organization
Basis of
Comparison
Informal Group Formal Group
General nature Unofficial Official
Major concepts Power and politics Authority and
responsibility
Primary focus Person Position
Source of leader
power
Given by group Delegated by
management
Guidelines for
behavior
Norms Rules and policies
Source of control Sanctions Rewards and
penalties

8. THE NATURE OF INFORMAL ORGANIZATIONS
Figure: Formal and informal organizations and their effects

9. THE NATURE OF INFORMAL ORGANIZATIONS
Member Status and Informal Leaders
Members of work group like to distinguish them from one another on
the basis of: age, seniority, earnings, birthplace, nature of
workplace, technical skill, freedom, personality etc.
•Informal leader: The employee with the largest amount of status
who is usually emerge from within the group.
•Identifying and Rewarding Informal Leaders: Informal
leaders often exhibit some distinct behavior like
- Acting as a spokesperson on behalf of management
- Being the center of social attention
- Providing guidance to new employees

10. Benefits and problems Associated with Informal
Organizations:
Benefits Problems
•Makes a more effective total system •Creates undesirable rumor
•Lighten workload of management •Encourage negative attitudes
•Helps get the works done •Resists change
•Encourage cooperation •Leads to interpersonal conflicts
•Fill in gaps in manager’s ability •Rejects and harasses some
employees
•Gives satisfaction and stability to
workgroup
•Weakens motivation and satisfaction
•Improve communication •Operates outside of management’s
control
•Provides a safety value for employee
emotions
•Support conformity
•Contribute to higher cohesiveness •Develops role conflicts

11. Monitoring Informal Organizations
Network charts:
A visual portrait of
interactions among
people within an
informal group.
It’s a communication
pattern which is
drown by asking:
-Who trust whom?
-Whom do you seek
advice most
frequently?

12. FORMAL GROUPS
Committee: A specific type of group meeting in which members in their
group role have been delegated the authority to handle the problem at hand.
System factors to be considered to make an effective
committee:
Size: Membership should be limited within 7 due to proper communication.
Composition: It should include leader, problem solving group and task force.
Agendas:
Surface agenda – the official task of the group.
Hidden agenda – member’s private motives that they keep hidden.
Leadership roles:
Task role – to help the group achieving its objectives and stay on target.
Social role – to maintain group relationships by recognizing contributions and
reducing disagreements.

13. Structured Approaches: Four structured approaches
commonly used in group problem solving are brainstorming,
nominal groups, the Delphi technique, and dialectic inquiry.
• Brainstorming: A method for encouraging creative
thinking in groups of about eight (8) people.
Basic guidelines:
1) Generate as many ideas as possible.
2) Be creative and imaginative.
3) Build upon, extend or combine earlier ideas.
4) Withhold criticism of others’ ideas.
• Nominal Group Technique: A nominal group exists in
name only, with members having minimal interaction prior to
producing decision.

14. Steps of nominal group technique:
1. Individuals are brought together and presented with a problem.
2. They develop solutions independently in a written form.
3. Their ideas are shared with others.
4. Time is allocated to ask questions.
5. Group members select the best alternative to their solutions.
6. At last the group decision is announced.
Delphi Decision Making
 A panel of relevant people is chosen to address an issue.
 Such members are selected who are experts and have relevant
information to share.
 A series of questions are presented to the respondents who do not meet
face to face.
 All express their opinions in written and have to explain their
conclusions.

15. • Dialectic Decision Method (DDM)
 Begins with a clear statement of problem to be solved.
 Two or more competing proposals are generated.
 Identify the explicit and implicit assumptions underlying
each proposal.
 Examine all relative merits and demerits of each
proposal.
 Finally make a decision based on the competing
presentations.

16. Figure
Steps
in
dialectic
decision
making

17. Weaknesses of Committees
• Slowness and Expensiveness
• Group think
• Polarization
• Escalating Commitment
• Divided Responsibility

18. End of the
Chapter