Business Essentials, 12/e

Informal Organization

1. Objective 6-5 Describe the informal organization and discuss intrapreneuring.

The structure of a company, however, is by no means limited to the formal organization as represented by the organization chart and the formal assignment of authority. Frequently, the informal organization, everyday social interactions among employees that transcend formal jobs and job interrelationships, effectively alters a company’s formal structure.¹⁵ This level of organization is sometimes just as powerful—if not more powerful—than the formal structure. When Hewlett-Packard fired its CEO, Carly Fiorina, a few years ago, much of the discussion that led to her firing took place outside formal structural arrangements in the organization. ...