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Formal and Informal Groups

What are the differences between formal and informal groups? Why should managers pay attention to informal groups?

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Formal groups typically occur via two avenues: organizational structure or project/managerial assignment. In organizational structure, formal groups are usually defined by individuals working within the same function. For example, the accounting division may be comprised of employees who manage tasks such as accounts payables, receivables and even organizational financial reporting. As the individual functions impact each of the areas within the division, a formal group has been created. The employee who manages an organization's finances is unable to do so properly without knowing the status of both payables and receivables. By nature of the intertwining of job duties, a formal group has been created. These employees may have a job to perform based on their individual tasks; but the overall success of the entire division depends on the group as a whole. Individual goals are typically a sub-set of the entire divisional goals. The same situation is ...

Solution Summary

This solution is over 600 words and definse formal and informal groups. Formal groups are those that have a defined common goal or interest. For example, a political group that supports a specific candidate. Informal groups often come together without defined organization; such as a group of employees that routinely eat lunch together. This solution describes the importance of both types of groups and why management should pay attention to their interactions. These reasons include a manager's ability to gauge how certain individuals work together on a specific project when in a formal group; to knowing what the "pulse" is of employees who are in informal groups.

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