What is meant by 'Formal Organisation'? State any three advantages and any two limitations of 'Formal Organisation'.
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Formal organisation refers to the organisation structure which is designed by the management to accomplish its objectives.
Advantages:
(a) It is easier to fix responsibility since mutual relationships are clearly defined.
(b) It avoids duplication of effort since there is no ambiguity in the role that each member has to play.
(c) It maintains unity of command through an established chain of command.
(d) It leads to the accomplishment of goals by providing a framework for the operations to be performed.
(e) It provides stability to the organisation because there are specific rules to guide behavior of the employees.
Limitations:
(a) It may lead to procedural delays as the established chain of command has to be followed which increases the time taken for decision making.
(b) Poor organisation practices may not provide adequate recognition to creative talent, since it does not allow any deviations from rigidly laid down policies.
(c) It is difficult to understand all human relationship in an enterprise, as it places mole emphasis on structure and work.
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