Informal Organizations, Organizational Size, and Lean Structure Principles

UPI Study › Courses › Leadership and Organizational Behavior › Free lessons › Lesson 14.4 Free with a free account

Informal Organizations, Organizational Size, and Lean Structure Principles

Leadership and Organizational Behavior · Chapter 14: Organizational Structure, Design, and Behavioral ImplicationsSection 14.4 · lesson 84 of 12211 min · free with a free account

← Contemporary Designs: Matrix, Team, Network, and Boundaryless OrganizationsNext lesson: E-Business Organizational Forms, Behavioral Implications, and Staff Control →

Earn 3 college credits for Leadership and Organizational BehaviorRecommended for credit by NCCRS · Business 206 · self-paced · one payment, lifetime access
Enroll in Leadership and Organizational Behavior · $250 →Download the syllabus (PDF)

In this lesson

The lived organization is always more than the charted one.

  • Name 2 ways the informal organization helps and 2 ways it hinders
  • List 3 changes that accompany growth and why each occurs
  • Contrast flat and tall structures and the settings each suits
  • Translate lean principles into specific structural choices

Free study notes

Get this lesson's notes by email

The key points and 4 practice questions with answers, in your inbox. One email, free.

One email. Unsubscribe in one click.

Transcript

Everything said in the video, section by section (1,604 words). Read along, or search it.

Organizational Structure, Design, and Behavioral Implications

Informal Organizations, Organizational Size, and Lean Structure Principles

This section is about everything structural that the org chart does not show. There are three such things, and each one has real force. The first is the informal organization, the network of trust and influence that grows on its own. The second is size, which pushes every growing group in a predictable direction. The third is height, meaning how many layers sit between the top and the front line. Then we take up lean principles, which are a deliberate answer to all three. Here is the thread running through the whole section. The lived organization is always more than the charted one. Managing the gap between the two is a central part of the designer's craft. A leader who works only from the chart will be surprised again and again.

Behind The Chart

The Organization That Nobody Drew

Every formal structure is shadowed by an informal one. That informal structure is the real web of friendships, trust, advice-seeking, and influence. It grows naturally among people who work together, whether anyone plans it or not. Here is the cleanest way to state the difference. The formal chart shows who is supposed to talk to whom. The informal network shows who actually does. The gap between those two pictures is where most organizational surprise lives. Now, informal organization is not a flaw to be stamped out. It fills gaps the formal design could never have anticipated. It transmits knowledge faster than official channels do. And it gives members a sense of belonging that no reporting line supplies. It exists because it meets real needs that the formal structure cannot meet.

Its Costs

The Same Network, Working Against You

The same network that helps you can work against you, and for the same reasons. Rumor can outrun fact, especially where official information is scarce. Cliques can exclude newcomers, quietly narrowing who gets heard. And resistance to change can organize quietly, below the formal radar. So what is the right stance toward all of this? Not suppression, which fails, and not indifference, which is worse. Read it. Respect its strengths. Address its dysfunctions openly. Take the rumor problem as the model case. Rumor thrives on scarcity of official information. So the treatment is not a ban on gossip. It is honest, timely formal communication. Fix the supply and the demand for rumor falls on its own.

Mapping

Reading a Network Nobody Charted

Because the informal organization is invisible on any chart, you have to find ways to perceive it. Three patterns reveal most of it. The first is who is asked for advice. That shows where expertise is genuinely trusted, as opposed to where it is formally located. The second is who is trusted across boundaries. People whose word carries into units other than their own are the real bridges. The third is who others turn to in a crisis. Under pressure, people route around the chart, and where they route to is the truth. These patterns often diverge sharply from the formal hierarchy. A junior member with deep expertise may be far more central than their title suggests. And a senior manager may sit at the periphery of the real information flow. So recognize these hubs, and stop assuming that influence follows rank.

Partnering

Working With It Rather Than Against It

Once you can see the informal organization, you can engage it rather than fight it. Bring trusted connectors early into changes. Their endorsement then carries the new direction through their own networks. Bridge the gaps deliberately. Units with few ties to the rest can be linked through shared projects or rotation. Address the harmful dynamics at their source, which is usually a shortage of honest information. The guiding stance throughout is respect. The informal organization exists because it meets real human needs the formal structure cannot. So treat it as a resource to be understood, not as a rival authority to be defeated. In most groups, a handful of well-connected people carry far more coordination than their titles imply. Partnering with those people is one of the highest-leverage moves a leader can make. It matters most during change, when quiet endorsement succeeds where formal directives fail.

Size Effects

What Growth Does Whether You Choose It or Not

Now the second force, and this one operates whether anybody intends it or not. As an organization grows, four predictable changes follow. Formalization rises, because informal coordination no longer reaches everyone. Specialization deepens, as roles narrow and each slice justifies a dedicated person. Overhead grows, as the proportion of managers and support staff rises against frontline workers. And authority swings. Decision making often centralizes at first. Then it decentralizes, once leaders find they cannot personally process every choice. None of these shifts is automatic, and none is desirable in every case. But recognizing the gravitational pull of size is what lets you counteract it deliberately. Say it this way. Size is a force, not a destiny. Many large organizations deliberately fight the pull, keeping decisions local and structures flat. Knowing the default direction lets you choose where to resist, rather than drifting into bureaucracy.

Resisting Drift

Four Pressures and Four Counter-Measures

Each pressure from growth has a default drift, and a deliberate counter-measure. Coordination strains, and the default is more written rules. The counter-measure is keeping operating units small enough to retain a personal feel. Decisions pile up, and the default is to centralize them at the top. The counter-measure is pushing authority downward instead of hoarding it at the center. Overhead grows, and the default is expanding headquarters staff. The counter-measure is capping the growth of central staff on purpose. Layers accumulate, and the default is narrower spans and a taller chart. The counter-measure is widening spans and protecting flatness deliberately. None of this happens by itself. It requires continuous effort against real gravity. And here is the error to avoid. Arriving at a tall, formalized structure by default, without ever deciding it serves the strategy.

Span Of Control

The Arithmetic Behind Flat and Tall

The third force is height, and it comes down to one number. Span of control is the number of people who report directly to each manager. Wide spans produce flat structures with few layers. Narrow spans produce tall structures with many. Flat structures shorten communication paths and speed decisions. They push responsibility downward, which is often the whole point. But they stretch each manager thin, and they demand capable, self-directed members. Tall structures allow close supervision and clear advancement ladders. But they slow information, and they dilute messages as those messages pass through layers. They can also distance leaders from frontline reality, which is the more dangerous cost. So height is a strategic choice, not an accident of growth. Flat suits speed and innovation. Taller may suit close control and careful risk management.

The Trade-Offs

What Changes When the Chart Gets Flatter

It is worth seeing what actually changes as a structure gets flatter. Span of control goes from narrow to wide. Decision location moves from the upper layers to the front line. Communication speed goes from slow and filtered to fast. The manager's role shifts from supervisor to coach. And member autonomy rises. Now go back over those five shifts, because there is a trap hiding in them. They describe one coherent package, not a menu of independent options. Flattening a chart while leaving decision rights at the top changes the picture, not the behavior. You get the same slow decisions, made by managers who now have twice as many reports. If you widen spans, move the decisions too.

Lean Principles

Value for the User, Waste Everywhere Else

Lean thinking, drawn originally from manufacturing, gives practical shape to all of this. Its core aim is to maximize value for the end user while eliminating waste. And waste has a precise definition here. It is any activity that consumes resources without adding value. Structurally, that aim points to four choices. Push decisions to the people actually doing the work. Minimize hand-offs, because hand-offs create both delay and error. Make problems visible quickly, rather than letting them travel downstream. And pursue continuous incremental improvement, rather than occasional dramatic reorganizations. What that produces is a structure that is flatter, more transparent, and more responsive. With frontline members empowered to stop and fix problems at the source.

A System

Lean Is a System, Not a Menu

Lean is most powerful as a coherent system, where each element reinforces the others. Take them in pairs and the dependencies become obvious. Pushing decisions to the front line only works if the front line has information. Which is why lean structures invest in making problems and performance visible to everyone. Minimizing hand-offs only helps if the remaining work is owned end to end by capable teams. Which is why lean structures organize around whole value streams, not narrow functional steps. Continuous improvement only takes hold if frontline members are empowered to act. And expected to. Which is why every member is treated as a problem-solver rather than a task-performer. So lean structure is not a collection of cost-cutting tricks. It is a design philosophy aligning decision rights, information, work organization, and culture. That coherence explains why partial adoption so often disappoints. Flatten the chart but withhold information, and you have taken pieces without the connections.

Three Lenses

Lead the Lived Organization

Pull the three forces together, because they are three lenses on one reality. The gap between the organization as charted and the organization as lived. The informal network governs the real flow of influence and news. Your lever there is enlisting the connectors and influencers you have identified. Organizational size governs the drift toward formalization. Your lever is deciding consciously what to resist, rather than letting drift decide. A flat structure governs speed and autonomy. Your levers are widening spans and pushing decisions down. A tall structure governs supervision and control, and layers should be added only where they earn it. A leader who attends only to the formal design will be repeatedly surprised. The soft, informal, and emergent features of structure are not noise. They are forces to be managed as seriously as the chart itself.

About Leadership and Organizational Behavior at UPI Study

Leadership and Organizational Behavior (Business 206) is a self-paced online course of 122 video lessons in 20 chapters, from personality, perception and motivation to leadership and power, teams, decision-making, conflict, organizational structure, culture, ethics and change. It carries a NCCRS credit recommendation for 3 semester credits.

Every lesson transcript is free on pages like this one, and the videos are free with a free UPI Study account. Enrolling adds a practice quiz after each lesson, the graded work and final exam that earn the credit, lifetime access, and an official transcript on completion. UPI Study has helped over 130,000 students with college credits. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.

Enroll now → Course details Download the syllabus All Business courses Every course with PRO →

Compare: Management and leadership courses · Foundations of Leadership vs Leadership and OB

Why take it here

Why students take Leadership and Organizational Behavior with UPI Study

Why people act the way they do at workLeadership and Organizational Behavior explains how individuals, groups and leaders behave inside organizations: motivation, attitudes, teams, power, conflict, culture and change. It is a core course in business administration, management and human resources programs.
Credit at a fraction of the priceThe same 3 credits can cost $750 or more at a US college. Here it is one payment, self-paced, with lifetime access.
Finish your degree soonerTransfer credits reduce the courses you still owe, so you can graduate earlier or lighten a heavy semester.
Strengthen an applicationA completed college-level course on an official transcript shows admissions and scholarship committees you can do the work.
Study on your own scheduleNo start dates, no deadlines. Watch the lessons, practice, and take the final when you are ready.
130,000+students helped with college creditsACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.

Where the credit goes

Universities that work with NCCRS

Leadership and Organizational Behavior carries a NCCRS credit recommendation. These universities work with NCCRS; some are UPI Study's signed partners. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.

Thomas Edison State UniversityThomas Edison State UniversitySigned partnerUniversity of the PeopleUniversity of the PeopleSigned partnerCharter Oak State CollegeCharter Oak State CollegeSigned partnerStrayer UniversityStrayer UniversitySigned partnerColumbia Southern UniversityColumbia Southern UniversitySigned partnerIndiana TechIndiana TechSigned partnerPenn StatePenn StateWorks with NCCRSSouthern New Hampshire UniversitySouthern New Hampshire UniversityWorks with NCCRSSUNYSUNYWorks with NCCRS +many more cooperating universitiesFind my college →

Find my college → Not listed? Ask Athena in the corner of this page, or book a 15-minute call.

FAQ

Questions students ask us

About Informal Organizations, Organizational Size, and Lean Structure Principles

What is the informal organization in a company?
The informal organization is the real web of friendships, trust, advice-seeking, and influence that grows among people who work together. The formal chart shows who is supposed to talk to whom; the informal network shows who actually does. It fills gaps in the formal design, spreads knowledge quickly, and builds belonging, but it can also spread rumor, form excluding cliques, and quietly organize resistance to change.
What is span of control, and how does it affect tall and flat structures?
Span of control is the number of people who report directly to a manager. Wide spans create flat structures with few layers, which shorten communication paths, speed decisions, and push responsibility down, but stretch managers thin. Narrow spans create tall structures with many layers, which allow close supervision and clear career ladders but slow and dilute information. Flattening works only if decision rights also move down.
How does organizational size affect structure?
As organizations grow, formalization tends to rise, specialization deepens, overhead grows relative to frontline staff, and authority often centralizes before decentralizing once leaders cannot handle every decision. These shifts are a strong pull rather than a fixed outcome. Leaders can counter them deliberately by keeping operating units small, pushing authority downward, capping the growth of central staff, and widening spans of control to keep the structure flat.
What are the principles of a lean organizational structure?
Lean thinking, which began in manufacturing, aims to maximize value for the end user while eliminating waste, meaning any activity that uses resources without adding value. Structurally, it pushes decisions to the people doing the work, minimizes hand-offs, makes problems visible quickly, and pursues continuous small improvements. These elements depend on each other, so flattening a chart without sharing information or empowering frontline staff usually disappoints.

About the Leadership and Organizational Behavior course

How many college credits is Leadership and Organizational Behavior?
Leadership and Organizational Behavior (Business 206) carries a NCCRS credit recommendation for 3 semester credits. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.
How much does Leadership and Organizational Behavior cost and what is included?
$250, paid once, with lifetime access: all 122 video lessons, a practice quiz after each, the graded work and final exam, and an official transcript when you finish. Students who want several courses choose UPI Study PRO instead.
Which universities accept UPI Study credits?
UPI Study has signed partner agreements with universities such as Thomas Edison State University, University of the People and Charter Oak State College, and works with universities such as Penn State, SNHU and SUNY. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities. Use "Find my college" on this page to check yours.
How long does Leadership and Organizational Behavior take?
It is self-paced with no deadlines. The 122 lessons total about 21 hours of video; most students add reading and practice time and finish in a few weeks to a few months, on their own schedule.
How are the exams done?
Quizzes and assignments are online in the course. The final exam is taken online with proctoring; a person on the UPI Study team checks assignments, usually within two days.
How do my credits reach my college?
When the course shows 100% complete, request the official transcript from your dashboard. It is sent to the college you name, and you can send it to more than one. Check your college first with "Find my college" on this page, or ask Athena.

Ready for the full course? Earn 3 credits in Leadership and Organizational Behavior.

122 video lessons, a quiz after each one, and the graded work that earns the credit. Recommended for credit by NCCRS.

Enroll in Leadership and Organizational Behavior →Download the syllabusEvery course with PRO →
Leadership and Organizational Behavior
3 credits · NCCRSEnroll →