A literature review on the topic of informal organizations can provide valuable insights into the
nature, significance, and implications of these informal structures within formal organizations.
Informal organizations refer to the networks, relationships, and social dynamics that exist among
employees within an organization, often outside the official hierarchy. Below is a literature review that
explores key themes and findings related to informal organizations.
1. Definition and Conceptualization of Informal Organizations: The concept of informal
organizations within formal structures has been widely discussed in the literature. Researchers
like Chester Barnard and Peter Blau have emphasized the existence of informal groups that
influence the behavior and attitudes of individuals in organizations. Scholars have defined
informal organizations as networks of relationships, communication channels, and social
groups that emerge spontaneously among employees.
2. Types of Informal Organizations: Scholars have identified various types of informal
organizations, such as cliques, friendship groups, mentorship networks, and social clubs. These
informal structures can be based on shared interests, goals, or social connections.
3. Functions and Roles of Informal Organizations: Literature suggests that informal organizations
serve several important functions within formal organizations. They can provide emotional
support, facilitate information sharing, bridge communication gaps, and act as a source of
social cohesion. Informal leaders often emerge within these groups, exerting influence and
contributing to the organization's functioning.
4. Impact on Organizational Performance: Research has shown that informal organizations can
have both positive and negative effects on organizational performance. On the positive side,
they can enhance employee morale, job satisfaction, and collaboration. However, they can also
lead to resistance to change, conflicts, and favoritism, which may undermine organizational
goals.
5. Relationship with Formal Structures: Scholars have explored the relationship between informal
and formal structures. It is often noted that informal organizations can complement or
sometimes even counteract formal hierarchies. Managers need to recognize and understand
these informal dynamics to effectively manage their organizations.
6. Organizational Culture and Informal Organizations: Organizational culture plays a crucial role in
shaping informal organizations. A supportive and inclusive culture can encourage the
formation of positive informal networks, while a toxic culture may lead to the development of
detrimental informal structures.
7. Managing and Leveraging Informal Organizations: The literature suggests that organizations
can benefit from recognizing and harnessing the power of informal organizations. Strategies
for managing and leveraging these structures include promoting open communication,
creating opportunities for employee involvement, and aligning informal networks with
organizational goals.
8. Future Research Directions: The study of informal organizations continues to evolve, with
emerging trends such as the impact of remote work and digital communication tools on
informal networks. Future research could explore the role of technology in shaping informal
organizations and their influence on organizational resilience and adaptability.
In conclusion, the literature on informal organizations highlights their pervasive presence and
significance within formal organizational settings. Understanding the dynamics, functions, and
implications of informal organizations is crucial for managers and leaders aiming to create more
effective and adaptive organizations. Further research in this field can shed light on new challenges
and opportunities arising in the ever-changing workplace landscape.
A literature review on informal organizations can provide valuable insights into the role, dynamics,
and significance of informal structures within formal organizations. Informal organizations refer to the
network of relationships, social interactions, and unofficial channels that exist alongside the formal
hierarchy of an organization. Here is a comprehensive literature review on this topic:
1. Introduction
Informal organizations have gained significant attention in organizational theory and management
literature due to their pervasive presence and potential impact on organizational effectiveness and
employee satisfaction. This literature review aims to synthesize key findings and theories related to
informal organizations.
2. Historical Perspective
The study of informal organizations can be traced back to the Hawthorne studies conducted in the
1920s and 1930s. These studies highlighted the role of informal groups in influencing employee
behavior, job satisfaction, and productivity. The findings from Hawthorne studies laid the foundation
for the subsequent research on informal organizations.
3. Definitions and Characteristics
Informal organizations are typically characterized by:





Spontaneous formation of social networks.
Emergence of informal leaders.
Informal communication channels.
Norms, values, and customs distinct from formal rules.
Influence on decision-making and organizational culture.
4. Theoretical Frameworks
Several theoretical frameworks have been proposed to understand informal organizations:
a. Social Exchange Theory: This theory posits that individuals form informal relationships based on
the principle of reciprocity. In the workplace, employees may engage in informal relationships to
exchange information, support, or resources.
b. Social Identity Theory: This theory emphasizes how individuals identify with informal groups
within the organization, which can lead to the formation of in-groups and out-groups, influencing
behavior and attitudes.
c. Network Theory: Network analysis is used to map and analyze informal networks within
organizations. This approach helps in understanding the flow of information and influence through
informal channels.
5. Functions and Roles
Informal organizations serve several functions, including:
a. Information Sharing: Informal networks often facilitate the rapid dissemination of information,
especially when formal channels are slow or insufficient.
b. Social Support: Employees may find emotional and instrumental support through their informal
connections, contributing to job satisfaction and well-being.
c. Resistance to Change: Informal groups may resist organizational changes that threaten their
established norms and power structures.
6. Positive and Negative Aspects
The literature identifies both positive and negative aspects of informal organizations:
a. Positive Aspects: - Enhancing communication and information flow. - Fostering innovation and
creativity. - Supporting employees' social and emotional needs.
b. Negative Aspects: - Potential for conflict and power struggles. - Resistance to formal authority. Formation of cliques that can undermine organizational cohesion.
7. Managerial Implications
Effective management of informal organizations requires a nuanced approach, including:
a. Recognizing the value of informal networks in achieving organizational goals. b. Nurturing positive
informal relationships while addressing negative aspects. c. Encouraging open communication
between formal and informal networks. d. Leveraging informal leaders as change agents.
8. Conclusion
The study of informal organizations is essential for understanding the complex social dynamics within
formal organizational structures. While informal networks can enhance organizational effectiveness,
they also pose challenges that require careful management and attention. Future research should
continue to explore the evolving nature of informal organizations in the modern workplace and their
impact on organizational outcomes.
A literature review on informal organizations can help provide an overview of the key concepts,
theories, and research related to this important aspect of organizational behavior. Informal
organizations refer to the informal networks, relationships, and communication channels that exist
within an organization, often alongside the formal structure. Here is a literature review that
summarizes some of the key findings and ideas in this field:
Introduction: Informal organizations play a critical role in shaping the dynamics and functioning of
formal organizations. Understanding informal organizations is essential for managers and scholars
alike because they can have a significant impact on employee behavior, organizational culture, and
overall performance. This literature review aims to explore the various dimensions of informal
organizations and their implications for contemporary organizations.
1. Definition and Conceptualization: Informal organizations have been defined as the networks of
relationships and interactions that occur spontaneously within an organization. They are not defined
by formal roles or reporting structures but emerge based on common interests, shared goals, and
personal connections. Early studies by Roethlisberger and Dickson (1939) in the Hawthorne
experiments shed light on the importance of informal organizations in shaping work behavior.
2. Characteristics of Informal Organizations: Numerous characteristics have been associated with
informal organizations. These include their fluid and dynamic nature, reliance on social norms, and
their capacity to bridge gaps in the formal organizational structure. Researchers like Barnard (1938)
emphasized the role of informal organizations in overcoming limitations of the formal structure.
3. Social Networks and Social Capital: Social network theory has been instrumental in
understanding the structure and functioning of informal organizations. Granovetter's (1973) "Strength
of Weak Ties" highlighted the importance of weak ties in accessing new information and resources.
Social capital, as developed by Bourdieu (1986) and Putnam (2000), also plays a crucial role in
informal organizations, as individuals within these networks can leverage their social capital for
personal and organizational benefits.
4. Informal Leaders and Power Dynamics: Within informal organizations, informal leaders often
emerge. These leaders are not appointed but gain influence through their expertise, charisma, or
social connections. Studies by Katz and Kahn (1966) explored the concept of informal leadership and
its impact on organizational behavior and decision-making.
5. Communication and Information Flow: Informal organizations are essential for communication
and information flow within an organization. Research by Mintzberg (1979) emphasized that much of
the important information in an organization flows through informal channels rather than formal
hierarchies.
6. Organizational Culture: Informal organizations contribute significantly to the development and
maintenance of organizational culture. Schein (1985) argued that culture is often influenced more by
informal norms, values, and behaviors than by formal statements or policies.
7. Informal Organizations in Contemporary Context: In today's rapidly changing organizational
landscape, the role of informal organizations remains crucial. Virtual teams, remote work, and global
collaborations have transformed the way informal organizations operate. Researchers continue to
explore how these changes affect informal networks and their impact on organizational effectiveness.
Conclusion: Informal organizations are a vital aspect of modern organizations, influencing
communication, leadership, culture, and overall performance. The literature on informal organizations
has evolved over the years, from early studies in the Hawthorne experiments to contemporary
research on virtual networks. Understanding these informal structures is essential for organizations
seeking to adapt to the ever-changing business environment and leverage the power of social
connections for success. Future research will likely continue to explore the evolving dynamics of
informal organizations in the context of emerging technologies and organizational structures.