Three Marks Question: What is meant by 'formal organisation'? List any two advantages of formal organisation.
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Formal organisation is “a system of well-defined jobs, each bearing a definite measure of authority, responsibility and accountability, the whole consciously designed to enable the people of the enterprise to work most effectively together in accomplishing their objectives.”
Formal organisation has the following merits:
1. It clearly defines objectives of the organisation and authority- responsibility relationships amongst people to attain those objectives.
2. It results in optimum utilisation of scarce organisational resources.