Formal and Informal Communication

Every organization has a formal communication network, in which ideas and information flow along the lines of command in the company’s organizational structure. Throughout the internal formal network, information flows in three directions.

Formal communication is organized and managed information that is shared with relevant individuals in order to secure coordinated action throughout the organization. Formal communication channels are based on an individual’s role in the organization and distributed in an organized way according to the established chain in organizational charts.

A formal communication channel transmits information such as the goals, policies, and procedures of an organization. Messages in this type of communication channel follow a chain of command. This means information flows from a manager to his subordinates and they in turn pass on the information to the next level of staff.

Formal Communication is of three types

  1. Downward Communication
  2. Upward Communication
  3. Horizontal Communication

Downward communication flows from executives to employees, conveying executive decisions and providing information that helps employees do their jobs.

Upward communication flows from employees to executives, providing insight into problems, trends, opportunities, grievances, and performance—thus allowing executives to solve problems and make intelligent decisions.

Horizontal communication flows between departments to help employees share information, coordinate tasks, and solve complex problems.

An example of a formal communication channel is a company’s newsletter which gives employees as well as the clients a clear idea of a company’s goals and vision. It also includes the transfer of information with regard to memoranda, reports, directions, and scheduled meetings in the chain of command.

Every organization also has an informal communication network—a grapevine—that operates anywhere two or more employees are in contact, from the lunchroom to the golf course to the company’s e-mail and instant messaging (IM) systems.

Informal communication satisfies a variety of needs, particularly social and emotional, and is not based on the positions individuals occupy within the organizations. As a result, the communication is not managed or planned in any organized fashion. It’s more relaxed, casual and tends to be spread by word-of-mouth quickly throughout a department or organization because it’s not restricted to approvals and an established path of distribution.

Probably the most common term used for the informal communication in the workplace is “grapevine” and this communication that is sent through the organizational grapevine is often considered gossip or rumor.

Some executives are wary of the informal network, but savvy managers tap into it to spread and receive informal messages. Smart managers also know that a particularly active grapevine is a sign the formal communication network is not providing the information employees believe they need. Grapevine flourishes when employees don’t receive the information they want to receive.

An example of an informal communication channel is lunchtime at the organization’s cafeteria/canteen. Here, in a relaxed atmosphere, discussions among employees are encouraged. Also managers walking around, adopting a hands-on approach to handling employee queries is an example of an informal communication channel.

Unofficial Communication Channel

Good managers will recognize the fact that sometimes, communication that takes place within an organization is interpersonal. While minutes of a meeting may be a topic of discussion among employees, sports, politics and TV shows also share the floor.

The unofficial communication channel in an organization is the organization’s ‘grapevine’. It is through the grapevine that rumors circulate. Also those engaging in ‘grapevine’ discussions, often form groups which translate into friendships outside of the organization. While the grapevine may have positive implications, more often than not information circulating in the grapevine is exaggerated and may cause unnecessary alarm to employees. A good manager should be privy to information circulating in this unofficial communication channel and should take positive measures to prevent the flow of false information.

An example of an unofficial communication channel is social gatherings among employees.

Formal and Informal


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