Explain the concepts of organization chart, formal structure, and informal structure. Why must a manager understand both the formal structure and the informal structure of an organization?
An organization chart which is a diagram identifying key positions and job titles within an organization, as well as lines of authority and communication provides a representation of the organization’s formal structure. The formal structure is the organization’s official structure; it reflects the official pattern of relationships in an organization. The informal structure is a “shadow” organization made up of the unofficial, but often critical, working relationships among organizational members.
By understanding the formal structure, a manager knows about the organization’s division of work, supervisory relationships, communication channels, major subunits, and levels of management. This knowledge indicates how the organization is supposed to work. However, an organization does not always operate according to the dictates of the formal structure. Knowledge of the informal structure is needed as well since the informal structure supplements rather than replaces the formal structure.
Source: Management, 11th Edition & 12th Edition- John R. Schermerhorn