Which of the following are the characteristics of Formal Organization?

(A) It is directed by rules.

(B) Communication takes place through the scalar chain

(C) Arises as a result of company rules and policies

(D) Leaders may or may not be managers. They are chosen by the group.

Choose the correct answer from the options given below:

Option 1 -> (A), (B) and (D) only - Incorrect because (D) describes informal organization where leaders are chosen by the group, not formal organization where managers are officially appointed.

Option 2 -> (A), (B) and (C) only - Formal organizations are rule-based, follow scalar chain communication, and arise from official company policies. This correctly excludes (D) which is an informal organization trait.

Option 3 -> (A), (B), (C) and (D) - Incorrect because (D) is a characteristic of informal organization, not formal organization.

Option 4 -> (B), (C) and (D) only - Incorrect because it excludes (A) which is a key formal organization trait, and includes (D) which belongs to informal organization.

Hence, Option 2: (A), (B) and (C) only -> Formal organizations are characterized by being directed by rules (A), having communication through the scalar chain/hierarchy (B), and arising from company rules and policies (C). Statement (D) describes informal organizations where leaders emerge naturally and are chosen by group members, not formally appointed like in formal organizations -> correct