Groups can be of two types:
Groups can be either formal or informal.
1. Formal Groups: A designated work group defined by the organization's structure. A formal group is set up by the organization to carry out work in support of the organization's goals. In formal groups, the behaviours that one should engage in are stipulated by - and directed toward - organizational goals. Examples include a book-keeping department, an executive committee, and a product development team. Formal groups may be command groups or task groups.
i) Command Group: A command group consists of a manager and the employees who report to him or her. Thus, it is defined in terms of the organization's hierarchy. Membership in the group arises from each employee's position on the organizational chart.
ii) Task Group: A task group is made up of employees who work together to complete a particular task or project. A task group's boundaries are not limited to its immediate hierarchical superior. It can cross command relationships. An employee's membership in the group arises from the responsibilities delegated to the employee -that is, the employee's responsibility to carry out particular activities. Task group may be temporary with an established life span, or they may be open ended.
iii) Committee: A group of people officially delegated to perform a function, such as investigating, considering, reporting, or acting on a matter. Committee, one or more persons appointed or
elected to consider report on, or take action on a particular matter. It investigates analyses and debates the problem and makes recommendation. Committee usually has their own committee member comprising of advisory authority, secretary and others. Recommendation is sent to the authority that is responsible for implementing them.
Characteristics of Formal groups
Ø Created to carry out some specific task or to meet a required goal
Ø Explicitly stated defined structure, procedural rules and membership
Ø Relatively permanent of temporary (e.g. steering group or problem solving group)
Ø Defined roles and designated work assignments
Ø Well Defined norms
Ø Specified goals and deadlines
2. Informal Groups: An organization's informal groups are the groups that evolve to meet social or affiliation needs by bringing people together based on shared interests or friendship. Thus, informal groups are alliances that are neither formally structured nor organizationally determined. These groups are natural formations in the work environment that appear in response to the need for social contact. Many factors explain why people are attracted to one another. One explanation is simply proximity; when people work near one another every day, they are likely to form friendships. That likelihood is even greater when people also share similar attitudes, personalities, or economic status.
i) Friendship Groups: Groups often develop because the individual members have one or more common characteristics. We call these formations 'friendship groups'. Social alliances, which frequently extend outside the work situation, can be based on similar age, same political view, attended the same college, etc.
ii) Interest Groups: People who may or may not be aligned into common command or task groups may affiliate to attain a specific objective with which each is concerned. This is an interest group.
iii) Reference Groups: Sometimes, people use a group as a basis for comparison in making decisions or forming opinions. When a group is used in this way, it is a reference group. Employees have reference groups inside or outside the organization where they work. For most people, the family is the most important reference groups. Other important reference groups typically include co-workers, friends, and members of the person's religious organization. The employee need not admire a group for it to serve as a reference group. Some reference groups serve as a negative reference; the employee tries to be unlike members of these groups.
iv) Membership Groups: When a person does belong to a group (formal and informal groups to which employees actually belong) the group is called a membership group (or affiliation group) for that person. Members of a group have some collection of benefits and responsibilities that go beyond the group serving as a reference point. In a membership group, each member would be expected to contribute to the group's well being and would enjoy the benefits arising from the group members' friendship.
v) Cliques: A relatively permanent informal groups that involves friendship. Most of the relationships came down to two cliques, each with a hanger-on, and some isolates. The groups included several different professions. They developed ideas about each other. Clique membership acted as a form of social control, forcing people to conform to group desires. The groups established norms regarding output, treatment of supervisor, reciprocity and other interpersonal relations. The cliques served as a system for sense making about organizational events. They developed their own set of beliefs, explaining things to each other.