An organization is made up of a group of individuals that exert a lesser or greater extent of power. When you use power in an organization appropriately, it can be useful. We need formal power to achieve organizational structure that sets strategic goals and company initiatives. Formal power exists in politics, business, religion, but also in social structures like a sports team or a student’s club. The manager of a company has formal power. So does the captain of a football team. However, informal power can be equally useful, especially when those in leadership roles recognize and use informal power to achieve organizational goals. Informal power comes from the respect and appreciation one has earned from the members of a group. This respect and appreciation allows the individual to influence his or her peers in a way that others within the group cannot. Informal organizational structure can better respond to unanticipated events and create paths where formal structure fails. (Davoren, 2019; Formal vs. Informal Power: Two Paths to Social Success, 2018; Gulati et al., 2017)
It is vital that you are aware of the relationships that exist in your organization. Your understanding of your organization’s power structures will determine how effectively you can affect change and achieve goals. There are ways that an informal organizational structure can define the bases of power within a company. When you have an effective and open line of communication it can give power within a company. Communication allows the top-level managers to provide real feedback to the team as well as the team to the manager. Informal communication comes with the benefit of more flexibility, better relationships, and the ability to solve conflicts with greater efficiency. Informal interactions are the skillful ways to exercise the bases of power within a company. (Gulati et al., 2017; internationaldirector, 2018)
Bases of power also are defined through interpersonal relationships that an individual cultivates with his/her team in an organization. Leaders possess this power when other people respect them. This power is defined through charisma, trust, respect, and admiration. (Gulati et al., 2017)
Another way informal organizational structure can define the bases of power within a company is through democratic leadership. A democratic leader welcomes team input and facilitates group discussion and decision-making. This leader type shares plans with the group and offers multiple options for group consideration. In this case, power is assisted only through requests, encouraging the team to work freely, allowing freedom in decision making while still maintaining control and the leadership role. (Gulati et al., 2017; Victor, n.d.)
New employees can understand the role of the informal network by having mutual self-interest. Mutual self-interest can help the employee connect with the organization through shared ideas and knowledge which, in turn, will help in building informal and socially based networks to collaborate. New employees also can use personal social networks to enhance the value of collaboration by connecting individuals with common interests. It can make the employee feel as though he/she is a hub in an informal network. (Gulati et al., 2017)
Informal networks are a major source of exchanging valuable information and data within different teams and departments of an organization. Moreover, an informal organizational structure serves as a good platform for the employees to share common ideas, beliefs, and ways to bond.
Davoren, J. (2019, March 7). The Difference Between Formal & Informal Power in Organizations. Small Business – Chron.Com. https://smallbusiness.chron.com/difference-between-formal-informal-power-organizations-20648.html
Formal vs. Informal Power: Two Paths to Social Success. (2018, August 9). People Skills Decoded. http://www.peopleskillsdecoded.com/formal-vs-informal-power/
Gulati, R., Mayo, A. J., & Nohria, N. (2017). Management: An Integrated Approach (2nd ed.). Cengage Learning.
internationaldirector. (2018, July 9). Informal Communication as a Source of Organizational Agility. https://internationaldirector.com/the-c-suite/informal-communication-as-a-source-of-organizational-agility/#:%7E:text=Informal%20communication%20comes%20with%20a,not%20entail%20conveying%20such%20information
Victor, D. (n.d.). Leadership Styles and Bases of Power – strategy, organization, system, manager, definition, model, type, hierarchy, business. Referenceforbusiness. Retrieved October 7, 2021, from https://www.referenceforbusiness.com/management/Int-Loc/Leadership-Styles-and-Bases-of-Power.html