Impact of Formal and Informal

Groups in Organization
(Marketing)

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“Two heads can be better than one”
A group is two or more individuals
interacting with each other in some
manner to accomplish certain task

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 Group Team
Two or more freely Small group of people with
interacting individuals different skills who are
who share collective committed to a
norms, share common purpose,
collective goals, and performance goals,
have a common and approach, or
identity which they hold
themselves mutually
accountable

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 Important social dimension of work
 Concern for team membership & performance
 As group, social animals – being marginalised from a group is
uncomfortable
 Groups may be pro- or anti-organisational
 Raises questions about
 Manager development
 Leadership and follower relations
 Group processes affecting creativity, productivity, decisions
 Important for marketing specialists

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  Socialisation experiences & conformist personality
 Adjust preferences to fit group code
 Family, peer group pressures to belong
Person
Person AA Person
Person BB
Perceives
Perceives benefits
benefits Perceives
Perceives benefits
benefits
from
from being
being in
in from
from being
being in
in
relationship
relationship with
with B
B relationship
relationship with
with A
A
benefits & costs

Social exchange theory (blau 1964, homans 1961)

 Exchange social performances for a "valued"
reward
 Pay-offs (practical + psycho) for meeting the
costs 6
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 Formal group
A designated work group defined by the
organization’s structure

 Informal group
A group that is neither formally structured nor
organizationally determined; appears in response
to the need for social contact

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 Team - a formal work group consisting of people
who work intensely together to achieve a
common group goal.
 Self-Managed Work Team - a formal work
group consisting of people who are jointly
responsible for ensuring that the team
accomplishes its goals and who lead themselves.

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 Friendship Group - consisting of people who
enjoy each other’s company and socialize with
each other on and off the job.
 Interest Group - consisting of people who come
together because they have a common goal or
objective related to their organizational
membership.

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 People find new ways of doing things which they
find easier and save them time.
 Patterns of interaction are shaped by friendship
groups and other relationships.
 People forget what the formal structures are….
 It is easier to work with informal structures.

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 Need for Information and up gradation of
skills.
 Can be achieved through formal and informal
work groups.
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Advantages of 'formal grouping' Advantages
Advantagesofof‘Informal
‘Informalgrouping’
grouping’
Complex task not easily done by  Fulfil
Fulfilsocial
socialneeds
needs- -friendship
friendship&&
 
one interaction
interaction(Mutuals).
(Mutuals).
 Stimulate creativity , ideas People
Peopledevelop,
develop,test
test&&confirm

 confirm
 Coordinate, liase, integrate with  Self-concept + value
 Self-concept + value
parts of organisation
 Problem-solving - shared

 Beliefs,
Beliefs,reality,
reality,experience
experience++
meanings
meanings
knowing, knowledge??
 Decisions, commitment, trust 
 Reduce
Reducefeelings
feelingsofofinsecurity,
insecurity,
loneliness,
loneliness,anxiety
anxiety
 Promote cohesion - communicate,
maintenance, reinforcement 
 Achieve
Achievemutually
mutuallyinformal
informalaims
aims&&
purposes
purposes

 Take
Takeon
ondifferent,
different,natural
naturalroles
roles
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 Marketing associations – eg: ASCI, Emvies

 These associations are meant to safeguard marketing

interest
 Administrative work to safeguard each & every
members interest.

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 Coke / Pepsi
 Annual meeting to discuss their communication issues
 Bottling issues

 Eg: Agency pitch process.

 Influence of formal communication.

 Importance of role played by the informal communication.
 Achievement of the business ojectives.

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Thank You

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