What Is the Meaning of Business Organization

In this type of organization, it is not easy to manipulate directly and decision are made through political processes, the development of an informal organization is based on the day to day interactions and they change when people find new easier and time-saving ways of doing things. (Dickson 1939)
The informal organization has an advantage over the formal sector in that it is flexible and will respond quickly to changing circumstances, this type of organization encourage cooperation through the existing norms and obligations. (Dore 1983).
We can, therefore, differentiate the formal and informal organization by the way rules are set, the existence of a written document containing the rules, their flexibility to change and the execution of the rules.
In the informal organization, there are high levels of human interactions and communication is based on informal relationships within the organization, this is in contrast with the formal organization where communication is formal. Another difference between the two is that hierarchy in the informal organization is not observed whereas in the formal the hierarchy of offices has to be observed.
The formal sector has the advantage that the rules are set by those with authority and these rules are executed with minimum opposition, they also have the responsibility of making decisions in the organization.
In the informal sector, rules are made from the day to day interactions and this influences their flexibility, this organizations will change quickly in case of any chants organization tons and if they find new ways of doing things. Decisions are made through a political process and therefore this organization has a very low risk of making wrong decisions that would lead to great losses.