Question

In an informal organisation, authority arises out of:

• A. Virtue of position in management
• B. Company’s rules and policies
• C. Scalar chain
• D. Personal qualities

Hint:

Informal organisations form naturally within formal structures.- Authority in informal settings is not assigned but earned through personal influence.- These networks can enhance communication and teamwork but may also lead to resistance against formal decisions.

Answer 1

The Correct Option is D

An informal organisation is characterized by the natural and spontaneous development of interpersonal relationships within a business or workplace. Since it forms outside the official structures and processes of the formal organisational framework, authority in an informal organisation is not dictated by hierarchical or official titles. Instead, authority arises from:

• Personal qualities: In informal settings, individuals who exhibit strong personal qualities—such as charisma, expertise, trustworthiness, and leadership—naturally command respect and influence. These attributes allow them to lead and guide others without relying on formally designated power.

The other options associated with authority in a formal organization are:

• Virtue of position in management: Authority here is based on one's official role and responsibilities, not applicable in informal setups.
• Company’s rules and policies: These define authority and operational procedures within formal structures.
• Scalar chain: This refers to the line of authority within a formal organization from top to bottom.

Thus, in an informal organization, it is indeed personal qualities that serve as the primary source of authority and influence.