Organizational Behavior (OB)

Informal and Formal Groups

Group Dynamics
Social process by which people interact faceto-face in small groups
Types
Formal established by the organization and
which have a public identity and goal to
achieve
Informal emerge on the basis of common
interests, proximity and friendships

Differences between Informal and

Formal Organizations
Basis of Comparison

Informal
Organization
Unofficial
Power and politics

Formal
Organization
Official
Authority and
responsibility

Primary focus
Source of leader
power

Person
Given by group

Position
Delegated by
management

Guidelines for
behavior
Sources of control

Norms

Rules and policies

Sanctions

Rewards and
penalties

General nature
Major concepts

Informal Leaders
Employee with the largest amount of status in
the informal organization
Informal groups overlap
A group can have multiple informal leaders
One primary leader has more influence than
others

Leaders can be identified by their distinctive

behaviors

Benefits and Problems Associated with

Informal Organizations
Benefits

Problems

Monitoring Informal Organizations

Network charts: Focus on either interpersonal
feelings expressed among individuals or actual
behaviors exhibited
Determines who trusts whom and selects an
individual to negotiate a satisfactory compromise
on an issue

Guidelines for Influencing Informal

Organizations
Accept and understand them
Identify various levels of attitudes and
behaviors within them
Consider possible effects on informal systems
when taking any kind of action
Integrate the interests of informal groups with
those of the formal organization
Keep formal activities from unnecessarily
threatening them

Formal Groups: Committees

Group in which members who have the
authority to handle a problem meet to
address and resolve it
Groups authority is expressed in terms of one
vote for each member
Limitation - People are unable to make
adjustments from their normal work roles and
relationships

Systems View of Effective Committees

Potential Outcomes of Formal Group

Processes
Support for decisions
Quality of decisions and problem solving
improves
Individual development
Social facilitation: Members try harder to
contribute on a task just because other people are
around
Conformity: Members are alert to the perceived
expectations and norms of the majority

Consensus
Group engages in widespread input gathering,
which results in a shared level of
understanding
Consensus-oriented members can and will
support the decision made

Weaknesses of Committees
Groupthink: Tendency of a tightly knit group
to bring individual thinking in line with the
groups thinking
Symptoms

Self-censorship of critical thoughts

Rationalizing their actions
Illusion of invulnerability, unanimity, and morality
Reliance on self-appointed mind-guards
Stereotyping others outside the group
Pressure on dissidents to conform to the group

Weaknesses of Committees
Polarization: Individuals bring to the group
their strong predispositions toward a topic
Risky shift: Willingness to take chances with
organizational resources as a group than they
would as individuals
Group decisions dilute and thin out
responsibility
Social loafers: Individual members who shirk responsibility
with justifications

Weaknesses of Committees
Polarization: Individuals bring to the group
their strong predispositions toward a topic
Risky shift: Willingness to take chances with
organizational resources as a group than they
would as individuals
Group decisions dilute and thin out
responsibility
Social loafers: Individual members who shirk responsibility
with justifications

Weaknesses of Committees
Escalating commitment: Persevering in
advocating a course of action despite rational
evidence that it will result in failure
Selective perception results in confirmation bias
Ego needs of the decision makers affect decisions
Admiration of leaders who are risk takers

Weaknesses of Committees
Other related problems
Linearity bias - Propensity to make overly simple
cause-effect conclusions
Egocentrism - Temptation to overemphasize our
own importance while forcing a decision
Framing bias - Temptation to be overly influenced
by how the problem was presented
Self-confidence bias - Premature belief that the
best solution has already been uncovered
Anti-statistical bias - Reluctance to examine
relevant statistical information and give them
weight

Weaknesses of Committees
Overcome through:
Proper group structures to be selected
Group size is an important factor
Various leadership roles to be played
Devils advocate: Guardians of clear and moral
thinking who provide constructive criticism
Red teaming: Subset of a group:
Challenges underlying assumptions
Takes an adversarys viewpoint
Proposes scenarios that have not been considered