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ACCA Applied Knowledge · Business and Technology · The formal and informal business organisation

Which of the following is a characteristic of a formal organisation rather than an informal organisation?

A formal organisation has authority and responsibility defined through a documented structure, such as organisation charts and job descriptions. Friendships, the grapevine and naturally emerging leaders belong to the informal organisation, which arises spontaneously from social relationships rather than being deliberately designed by management.

  1. ARelationships based on shared interests and friendships
  2. BAuthority and responsibility defined through a documented structureCorrect
  3. CCommunication through the grapevine
  4. DLeadership emerging naturally from group members

Explanation

A formal organisation is deliberately designed with defined roles, authority, responsibility and reporting lines, usually documented in organisation charts and job descriptions. The other options describe informal groups, which arise spontaneously from social relationships, with the grapevine as an informal channel.

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