An informal group of friends. Image credit

ZIMSEC O Level Business Studies Notes: Informal and Formal groups

  • Businesses are formal groups which are created to perform an economic activity and achieve set objectives which may include profit, growth, provision of essential services etc.
  • Informal groups can emerge within these formal organisations
  • Informal groups- are networks of personal and social relationships that arise spontaneously in order to meet the needs of their members
  • Informal groups can also be known as informal organisations
  • An example is when workmates meet as friends for a drink outside work
  • The behavior and conduct of the members is governed by the group via norms
  • Norms refer to what is considered to be normal and acceptable behavior
  • Members who fail to follow set norms within the group face penalties such as isolation
  • Formal groups-these are deliberately planned structures of roles within the organisation
  • They are official, planned and deliberately created to achieve set goals
  • They are also known as formal organisations
  • Below is a table with a list of some of the differences between formal and informal groups
Formal GroupInformal Group
They are planned and officialArise spontaneously
Are assigned to carry out particular tasks within the organisationArise voluntarily to satisfy the needs of the members
Has formal rules and regulations which might include a code of conductRules are informal and come from the members themselves
The leader is elected or appointed officiallyThe leader emerges spontaneously as the workers socialise usually because the leader is charismatic
Appear on the organisational chartDo not appear on the organisational chart

To access more topics go to the O Level Business Notes page