CHAPTER ONE

INTRODUCTION

1.1  Background of the Study

In any organization, informal organization is a term whose relevance cannot be over emphasized, it refers to voluntary associations of clique’s development by the employees at all levels of the organization. that is from top management to workers in their day to day activities. But a formal organization according to Middlemist (1990: 9) is a collection of individuals formed into a coordinated system of specialize activities for the purpose of achieving certain goals over some extended period of time even though individual membership may change. It is also a planned pattern of coordinating a legal body for the purpose of achieving a common goal.

Therefore, there are some inter-relations that exist between both the formal and informal organizations. Informal organization itself cannot emerge in vacuum but from something which is the formal organization. Also since one of the factors for successful organization is criticism, this criticism can be found where than the GRAPE VINE which is the product of informal organization.

Talking about the effect of the informal organization on the performance of the formal organization, it denoted the two side effects derived from informal organization. the two side effect may be positive or negative according to the aim and the situation at hand.

The need for studying this effect of informal organization on the performance of formal organization arose from some organizational problems and discipline which always cause organizational draw back. Therefore, this particular factor must be considered most in every formal organization to allow the free flow of the organization activities.

The manager of the formal organization should also endeavour to consider the GRAPE VINE information because that may be better ground to know whether there is an informal organization within the formal organization and even to know whether it is possible or negatively formed and then solution can be given. Also this informal organization constitutes immensely to the development of the formal organization because like in the case of GRAPE VINE an information might be inspired from there into the ear of the manager and the sound very interesting without knowing the source of the information. First, it can be put test and practiced as well. For instance, if a manager catches an information  on the air that if by the end of the month, staff are not paid their entitlement, that there will be strike action against management which will result to poor or low productivity.

The manager would now look at it, as being reasonable incentives. When this is done to the staff, it is the work of informal organization changing the will of the people and that of the organization at that juncture form negative to positive.

1.2  Statement of the Problem

Successful managers or supervisors must be able to study and understand the nature and group forces of employees self interest and blend them with those of formal organization.

The performance of the formal organization is denoted by two side effects positive or negative according to the aim and situation at hand.

Informal and formal organizations have function to play in relation to the work performed by employees, the accomplishment of enterprise objective and satisfaction of the needs of workers.

This study is therefore set to examine the effect of informal organization on the formal organization situation of output, morale and communication.

1.3  Objectives of the Study

1. To examine the effect of employees self interest in informal organizations on formal organizations output.
2. To examine the effect of employees self interest in informal organizations on formal organization communication.

• To examine the effect of employees self interest in informal organization on formal organization morale.

1.4  Research Question

1. How is the effect of employees self interest in informal organization on formal organization output?
2. How is the effect of employees self interest in informal organizations on formal organization communication?

• How is the effect of employees self interest in informal organizations on formal organization morale?

1.5  Significance of the Study

This research study on the effect of informal organization on the performance of formal organization is vital to the manager for efficient and effective control measures in the form of handling some administrative issues and problems. It would help the managers to consider the risk involved in neglecting the lower personalities in the organization.

It will help government agencies involved in formulating policies relating to the growth of informal organization and student of tertiary institution and other research wishing to conduct research will find this study a useful reference material.