Page 34 - Managing Change in Organizations

CarnCh02v3.qxd 3/30/07 4:09 PM Page 17

Management structures and management in action
general meaning phrased as ‘administration versus politics’, ‘theory versus
practice’, ‘red tape versus working relations’.
Dalton (1959) page 219
Dalton defines formal or official as ‘that which is planned and agreed upon’ and
informal or unofficial as ‘the spontaneous and flexible ties among members,
guided by feelings and personal interests indispensable for the operation of the
formal, but too fluid to be entirely contained by it’. Thus the informal system is
a system of mutual help and adjustment. For example, a piecework system may
require that a supervisor only issues a new job to an operator when the previously
issued job is finished, exchanging the old job card for the new card. The opera-
tors might wish to accumulate a number of cards because this provides them
with a reserve of ‘time’ that they may use should problems hinder the comple-
tion of a job. In such a situation the accumulated time may be booked in and
average bonus maintained. Supervisors and operatives must work together and
both may ignore the formal requirements of the system, the supervisor being pre-
pared to issue a new job without demanding the previous job card, the operators
‘accumulating’ cards to use in the event of problems, and so on.
Informal communication may arise from work-related or social reasons. Most
work just cannot be done without some informal communication. Many studies
show that managers of all kinds prefer informal and verbal communication to
documents and that they spend around 45 per cent of their time communicating
outside the formal authority structure. Regular channels are often slow and unre-
liable. The information that a manager obtains from outside the formal system is
often qualitative but it is rich with meaning. A manager walking through a depart-
ment ‘sensing’ an uneasy or tense atmosphere would be short-sighted to prefer the
formal evidence that this is an efficient department. Will it continue to be effi-
cient? Should changes in work patterns or methods need to be introduced; can
this be achieved effectively? In fact most managers bypass the formal systems of
communication (now increasingly known as the management information sys-
tem, MIS) and build their own networks of informal contacts (Mintzberg, 1973).
The second reason for the existence of informal communication in organiza-
tions is social. People need to relate to each other. Moreover, people may bypass the

formal system in order to advance their own personal ambitions or needs. They
‘leak’ sensitive information to outsiders, or they hold information back. It is worth
noting that informal communication can be vital to the success of an organization,
particularly where employees work in a hostile or unsafe environment.
The importance of informal systems has been shown in many studies, notably
by Strauss (1963) in studies of purchasing departments. He found that the most
effective and high-status purchasing officers favoured mutual adjustment over
direct supervision and standardization. To resolve conflict with other departments
(e.g. engineering departments) they were reluctant to appeal to the purchasing
manager, to rely on the rules or to require written agreements; rather, they relied
on friendships, the exchange of favours and their own informal political power.
They tended to ‘oil the wheels’ of the formal system. If we are to understand
behaviour in organizations we must understand both the formal and the informal.
Authority and communication are facilitating processes for the two basic
flow processes: work flow and decision making. Decisions include much else

17