Formal organisation
The formal organisation is the intentionally established structure of roles, authority, responsibilities and official working relationships. It is expressed through arrangements such as reporting lines, job descriptions, procedures and decision rights. These arrangements support coordination and accountability but cannot describe every relationship through which work gets done. Actual behaviour also reflects informal networks and organisational culture.
Worked example
A company’s approved chart assigns purchasing authority to its procurement manager and requires purchase orders above a threshold to receive director approval. These are formal organisational arrangements.
Common mistake
Do not assume the organisation chart captures all influence or information flow. Formal authority can coexist with strong informal expertise or social influence.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Direct | September 2026–June 2027 |
| FIA | FBT | Direct | September 2026–June 2027 |