While most organizations have a formal organization structure, only poorly managed firms also have an informal organization.

Question

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All organizations, regardless of how well-managed they are, have an informal organization. The informal organization is made up of social networks and relationships that exist within an organization and may be outside of the formal structure. Factors such as shared culture, personal interests, and power dynamics can shape the informal organization, and it can have a significant impact on how work is done and how decisions are made within the organization.

While Most Organizations Have a Formal Organization Structure, Only Poorly