The network of connections and channels of communication based on the informal relationships of individuals inside an organization.

• A. Formal Organization
• B. Informal Organization
• C. Line Positions
• D. Line-and-Staff Organization

Answer: (B)

The informal organization refers to the network of connections and channels of communication that arise from people’s personal relationships and social interactions within the company. This informal web develops independently of the official chart and often governs how information actually moves, who is influential, and how decisions get made. It can speed things up, fill gaps in formal processes, and sometimes bypass official channels, complementing the formal structure rather than replacing it. In contrast, the formal organization is the officially defined hierarchy, roles, and communication lines; line positions are the direct chain of command within that formal setup; and line-and-staff organization combines line authority with staff specialists as part of the formal design. Hence, the described network is the informal organization.