Differentiate between formal and informal organisation
Answers
Answer:
The main difference between the two is:-
Explanation:
A formal organisation is created to fulfil some objectives.Hence, a formal organisation is basically goal-oriented. It is built around the general principles or organisation and the members of formal organisation are fully aware of these principles. Informal organisation, on the other hand, develops automatically and spontaneously. In other words, formal organisations are deliberately created whereas informal organisations are spontaneously formed.
(ii) Structure:
A formal organisation has a definite and specially designed structure reflected in organisation chart rendering a pictorial representation of the authority relationships. The authority structure is rigid and defined. Informal organisations are structure less groups. These are initiated by the workers themselves to serve the needs of workers.
(iii) Purpose:
Formal organisations are created to achieve goals defined by management. Normally, profit maximisation or wealth maximisation are the fundamental objectives of a formal organisation. On the other hand, the basic aim of an informal organisation is to satisfy the individual goals of members. Social satisfaction is the fundamental objective of an informal organisation.
(iv) Control:
In formal organisations, control points are established to constrain behaviour, restrain the members from going off the prescribed track. Thus, there exist a rigid system of rules and regulations which all the members are supposed to follow. Informal organisations are not tied to a rigid system of rules and regulations. However, every informal group outlines specific norms which the entire members are not supposed to violate in order to continue their membership.
Answer:
Formal source of credit: (a) Loans that are given by banks and co-operative institutions are called Formal sector of credit. (b) The functioning of these banks and co-operative institutions are supervised by Reserve Bank of India- RBI. (c) These institutions are required to report to the RBI the rate of interest, amount lending, etc. (d) Borrower is required to submit collaterals and documents. Informal source of credit: (a) Loans that are given by money lenders, friends and relatives are called Informal source of credit. (b) They are not supervised by Reserve Bank of India - RBI. (c) They can lend money at any interest rate and use any means to get back their money. (d) Borrower is not required to submit collaterals and documents