Formal vs. Informal Leadership: Definitions and Differences

Leadership rests on the ability to articulate a vision and persuade others to pursue that vision. As your business grows, you need to identify and encourage leaders in various departments who can help you lead employees in the direction of fulfilling your vision. You and these leaders can lead formally or informally. Both styles fit into the framework of different leadership theories and can lead to the same result, but the way you get there can be quite different. Lets take a look at formal vs. informal leadership.

Typically, a formal leader is the public-facing element of an organization. They provide a level of vision and direction, including detailed actions and the grander vision, for those who work with them. Informal Leadership comes from relationships, influence, and connections and usually comes in the form of favors.

FORMAL AND INFORMAL LEADER

What is formal leadership?

Formal leadership is a circumstance in which an individual is the officially recognized head of a group or organization. This type of leadership relates to a job title, so its the professional responsibility of formal leaders to motivate their juniors and take charge of the factors that may lead to the success of the organization, such as resource allocation and decision-making.

The CEO of a corporation is an example of a formal leader. Theyre responsible for directing all resources and operations and making decisions that lead the company to profitability. Also, as the highest-ranking executive of the organization, they officially have more authority than others within the company.

What is a leader?

A leader is a person who can influence the actions of others. Leaders exist in the context of groups, including teams, companies and other such organizations. The other members of the group rely on the leader to make decisions and determine actions that allow them to achieve their goals. For example, the coach of a basketball team is a leader who dictates the groups strategy and how much playing time each player gets, and these choices can directly affect the outcome of a game.

There are several styles of leadership. When making key decisions, some leaders invite input from involved parties, others take an autocratic approach to decision-making and still others prefer an intermediate style that combines elements of democracy and autocracy. However, regardless of specific style, effective leaders often have certain characteristics in common. These include:

What is informal leadership?

Informal leadership is when an individual does not have official status as a groups leader, but other group members see them as and consider them to be a leading force. Informal leaders tend to be experienced and knowledgeable, so theyre the ones people seek for answers and guidance. Often, theyve earned the status of informal leader by developing strong relationships with the people around them and proving themselves, through actions, to be reliable and trustworthy.

An example of an informal leader is a colleague whos well known for their intelligence, wisdom and interpersonal qualities. This person isnt necessarily a high-ranking member of the organization, but others respect them and typically go to them for advice and knowledge about procedures. In meetings, they might frequently offer actionable insights that lead to the resolution of problems. If they provide instruction, others often heed it willingly.

Formal vs. Informal leadership

There are several points of difference between formal and informal leadership. These include:

Authority vs. influence

Formal and informal leaders derive their authority from different sources. For formal leaders, their authority stems from the hierarchy in which they operate. A person assigned a leadership position has the power to make decisions and delegate tasks because their title bestows them that authority, and the members within the hierarchy acknowledge it.

In contrast, informal leaders have less authority than they do influence. Their power is based on trust, friendliness and shared interests with their colleagues and the reputation theyve earned through their work. The members within the organization recognize the qualities, rather than the title, of the informal leader.

Limited vs. expansive relationships

Both formal and informal leaders maintain professional relationships, but those of one are often necessarily narrower than those of the other. Normally, formal leaders work most closely with other high-level members of their organization, such as executives and people who occupy a level on the hierarchy directly below them. Their authority allows them to delegate the transmission of information to their juniors, thereby limiting the professional associations they usually have.

The professional relationships of informal leaders often cover a broader range of organizational members. They directly work alongside their team members but also work interdepartmentally. Its common for other teams to know and acknowledge their status as informal leader and thus communicate with them about important matters, trusting them to disseminate information to the appropriate parties.

Individual vs. collaborative decision-making

Under formal leadership, decisions usually issue directly from the leaders themselves. There may be some input from advisers, but the directive to proceed on a particular course comes from one person. For example, a CEO might decide to raise their companys minimum salary, closing the gap between the organizations lowest and highest earners. Other executives in the company might disagree with this decision, but the deciding power belongs to the CEO.

However, under informal leadership, decision-making often invites other members to contribute to the process. Rather than direct the actions of others, an informal leader is likely to ask for their input and encourage them to ask questions. Then, before making a decision, the informal leader might first confirm that others agree with it. In this way, non-leader members of the organization can influence the course the group takes.

Organization vs. members

When formal leaders make decisions, its usually with the goals of the organization foremost in mind, and the impact had on members may be a secondary consideration. For example, if a CEO decides to focus most of the companys marketing efforts on a specific product, this decision likely stems from the belief that this product can generate the most profit. If this effort succeeds, it improves the company first and potentially benefits the employees afterward.

Informal leaders, however, normally make decisions with the well-being and interests of their colleagues being the primary concern. For example, an informal leader working with others on a project might ask the others what they each believe they can contribute before assigning tasks accordingly. This system, in which everyone feels they can put in their best effort, directly benefits the members first and can potentially lead to a result that benefits the organization as a whole.

FAQ

What is informal leadership?

Informal leadership refers to an individual’s ability to be perceived as a leader because of their reputation, credibility and influence in the workplace. Individuals within an organization view informal leaders as worthy of following or listening to.

What is the difference between formal and informal authority?

Formal authority is the power that is given to a leader by an organization. This type of authority is dependent on the power that comes from that organization. Informal authority is given to a leader by their followers. Leaders can hold both formal and informal authority.

What is a informal leader example?

An example of an informal leader is a colleague who’s well known for their intelligence, wisdom and interpersonal qualities. This person isn’t necessarily a high-ranking member of the organization, but others respect them and typically go to them for advice and knowledge about procedures.

What is the difference between formal and informal leadership authority quizlet?

Formal leaders hold a position of authority, and informal leaders influence others throughout personal forms of power.

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