Explain the concepts of formal structure and informal structure. Why must a manager understand and work with both the formal structure and the informal structure of an organisation?

The formal structure of the organisation represents the way the organisation is intended to function in terms of jobs, lines of authority and patterns of communication. The informal structure is a 'shadow' organisation made up of the unofficial, but often critical, working relationships between organisational members. Informal structures can benefit organisations by helping people accomplish their work and allowing people to have access to interpersonal networks that provide emotional support and satisfy social needs. Informal structure and formal structure distinguish between the way work actually gets done and the way it is mapped on the organisation chart. It also illustrates the relationships in the shadow organisation and relationships on the organisation chart and how unofficial and official working relationships and communications patterns work within the organisation. Students can illustrate these with examples from their work experiences or any other business examples they know about.