Difference between Formal and Informal Leadership

A leader is a person who leads others, whether in a team, in a work situation, at school or in any situation where there are certain goals to be achieved. A leader is a person who leads a group and is able to inspire others to achieve a common goal. Leaders broadly can be classified into two types: formal leaders and informal leaders.

Formal leadership

Formal leadership is where a person is officially appointed as the leader of a group. Some examples of this type of leadership are the CEO of a company, a teacher in a school, the captain of a sports team, and the elected chief of a country. It is the formal leader’s job to organize available resources, work out logistics, and motivate team members to carry out their tasks to the best of their ability.

Informal leadership

An informal leader is a person who is not officially appointed as the head of a group, yet gives the other members motivation and inspiration. Although the CEO is the formal leader of a company, employees may see as a leader a colleague who, they believe, shares their goals and visions and has some knowledge or experience that will help them achieve their goals. These leaders are not in a formal leadership position, but are recognized as leaders of their peer groups.

The differences

Formal leaders have authority and certain rights and privileges that informal leaders lack. Consider the case of a company where the CEO is the formal leader of the company, and an employee is the informal leader. The formal leader exercises some power over the group and has the authority to watch over and punish misguided members. His authority gives him a greater power: to give rewards to the group. On the other hand, the informal leader does not have the ability to act against any member of the group, nor is he able to reward his teammates. You have to rely on open communication, shared vision, guidance, and charisma. The informal leader has to lead by example, through his individual behavior and personal practices.


A group that has formal and informal leaders is likely to conflict between the two, if they do not share the same vision. The group has different loyalties to the two leaders – the group of members are expected to be loyal to the formal leader because he has authority and power and are likely to be loyal to the informal leader because he is one of them. The informal leader has a greater commitment to the group, while the formal leader’s commitment is to the organization. In any situation, it is important for formal and informal leaders to work together to ensure that the group achieves optimal results.