The channels of communication are: 1. Formal Communication 2. Informal Communication.

There are four forms of formal communication as it flows in three directions: 1. Downward Communication 2. Upward Communication 3. Horizontal Communication 4. Crosswise or Diagonal Communication

The types of informal communication are: 1. The Grapevine 2. Rumors.

Channels of Communication: Formal and Informal Communication

Channels of Communication – Formal and Informal Communication

A communication channel is the route through which messages flow from the sender to the receiver.


Communication channels are broadly of two types:

1. Formal, and

2. Informal.

1. Formal Communication:

Formal communication follows the routes formally laid down in the organization structure of the enterprise. Formal channels are the paths of communication which are institutionally determined and which are associated with status or position of the sender and the receiver. Formal channels are deliberately created to regulate the flow of communication. An attempt is made to make the flow of information orderly so that it flows smoothly and timely to the points where it is required.


The officially prescribed path of communication is orderly in nature. It can easily be maintained because it derives support from authority relationships. It provides for close contact between members of the organization. It allows for the flow of essential information. It helps in exercising control over subordinates and in fixation of responsibility. Formal communications are generally in writing.

But formal communication tends to be slow and rigid. Organizational distance, screening at various points and narrow route are the main bottlenecks in the flow of formal communication. One way of overcoming these problems is to provide multiple channels linking one position with various other positions. But widespread use of such a system may create confusion and undermine the superior’s authority.

There are four forms of formal communication as it flows in three directions:

a. Downward,


b. Upward,

c. Horizontal,

d. Crosswise or Diagonal Communication

Downward and upward flows are two types of vertical communication:

a. Downward Communication:

Downward communication refers to the flow of information from a superior (high level) to a subordinate (lower level). It is used to issue orders and instructions to employees. An important part of downward communication is information about the objectives, policies and programmers of the enterprise. Regular provision of such information to employees helps to create a sense of belonging, a feeling of loyalty to the organization and an active interest in the work.

Employee handbook, organization manual, house journal, annual reports, notices memos and committee meetings are the main media of downward communication. The effectiveness of downward communication can be judged from the degree of improvement in general performance of employees. Personal measurements, e.g., incidence of accidents, absenteeism and labour turnover, opinion and attitude survey are also to evaluate the effectiveness of downward communication.

Downward communication performs the following functions:

(i) Gets things done,


(ii) Prepares employees for change

(iii) Removes misunderstanding and suspicion

(iv) Creates pride of being well-informed.

b. Upward Communication:


Upward communication refers to the flow of communication from lower levels (subordinate) to higher levels (superiors) of authority. Such communication enables the management to know what is happening throughout the organization. An executive can know the outcome of his decisions and instructions from reliable information from the employees. Such feedback has become all the more necessary due to growing tendency towards delegation and decentralization.

A manager cannot exercise effective control without do a complete such information and he cannot do a complete job of managing without controlling. Therefore, every manager should provide adequate opportunities and channels to his subordinates for upward communication.

Subordinates know many things that a superior needs to know but does not know. It may be a potential problem, a creative idea, a feeling of personal satisfaction. These things influence the motivation and performance of employees but they are often reluctant to talk freely and frankly to their superiors.

Upward communication performs the following important functions:


i. It serves as a measurement of effectiveness of downward communication.

ii. It provides management with necessary information for decision-making

iii. It relieves employees from pressures and frustrations of work situations.

iv. It gives the employees a sense of belonging through participation in management.

One of the most commonly used media of upward communication is periodic performance reports from subordinates. These reports may be used to measure performance, to control costs, to check conformance with policies and procedures, etc. But distortion may arise in reports due to fear of displeasing the boss, due to desire to make a favourable impression, etc. Manager should, therefore, interpret the reports very carefully.

c. Horizontal Communication:


Downward and upward communication represent vertical flow of messages. On the other hand, horizontal or lateral communication implies exchange of ideas and information among people working at the same level of authority. Communication among people of the same status or rank tends to be faster and flexible as there are no status barriers.

Such communication is helpful in coordinating the activities of different departments or divisions of the enterprise. It enables executive to exchange information and understanding. Horizontal communication takes place mostly through meetings, conferences, telephones, letters, memos, manuals, etc. A lot of information flows horizontally in an organization.

However, horizontal communication is hampered by specialized thinking and narrow outlook. Horizontal communication is also known as lateral communication.

A proper balance should be struck between the various flows of communication. Downward, upward and horizontal communications are complementary to one another. For example, the effectiveness of downward communication is directly dependent on whether it is being complemented by effective upward communication and vice versa. A three-way communication system is much more effective than one-way (downward) communication only.

d. Crosswise or Diagonal Communication:

It means communication between persons who are neither in the same department nor on the same level of organizational structure. It cuts across departmental lines. Diagonal communication is the least used channel of communication. It generally takes place when members cannot communicate effectively through other channels. For example, the Cost and Works Account who is interested in conducting a distribution cost analysis may ask a report directly from the sales representatives.


A diagonal communication takes place when sale representatives submit their report directly to the Coat and Works Accountant. Such communication may help to save time and to speed up action. But it may violate the principle of unity of command. Formal communication may also take place between an enterprise and the external environment. An enterprise may supply information to external agencies such as customers’ investors, government, financial institutions and the public.

Similarly, it may receive complaints and suggestions from these agencies. Deliberate, planned and sustained efforts to establish and maintain mutual understanding between an organization and these agencies (public) is known as public relations.

2. Informal Communication (Grapevine):

There are informal channels of communication. Informal communication is technically known as the grapevine. It takes place in informal and inter-personal contacts among employees. Members of an informal groups pass on informal and opinions to each other as well as to other informal groups. Information communication transcends the barriers and boundaries of the formal channels.

It is multiple in natures, the same person having social relationships with several other persons in the organization. It exists outside the official network but continually interacts with the formal communication. A grapevine is structure less and information passes through it in all directions.

Informal communication or grapevine has the following characteristics:

(i) It arises from social interactions among people


(ii) It is a natural and normal activity due to desire of people to talk to one another

(iii) It generally operates like a cluster chain as every person tells in turn many other persons

(iv) Only a few persons are active communicators in it. These can be called liaison individuals. People are active on the grapevine when their own interests and interests of their friends/ colleagues are involved

(v) It operates at a fast speed because it functions through word of mouth or observation

(vi) Grapevine functions partly in a predictable manner which offers managers a chance to influence it.



Informal communication offers the following benefits:

(i) It helps in developing better human relations in the organization.

(ii) It serves to fill possible gaps in the formal communication due to its flexible and personal nature.

(iii) Its speed is very fast because it is free from all barriers.

(iv) It helps to link persons who are not in the official chain of command.

(v) Managers can use it to collect feedback when it is not possible to gather information through the established channels in the formal communication.

(vi) Grapevine helps to satisfy social needs of employees and provides an outlet for releasing anxiety frustration etc.


Informal communication suffers from the following drawbacks:

(i) It is not authentic and message may get distorted.

(ii) It may give rise to rumors and gossips in the organization

(iii) As grapevine has no definite origin, nobody can be held responsible for it.

(iv) It may result in leakage of confidential information.

(v) It is not dependable as informal channels may not always be active.

(vi) It violates unity of command.

Thus, there is nothing inherently bad about grapevine. Rather in its absence, a manager’s ability to motivate people, build teamwork and develop sense of identity with the organization would be greatly reduced.

A manager cannot eliminate the grapevine. Therefore, he should learn to use it for the benefit to the organization. From the grapevine, a manager can find out what his subordinate are thinking. He can counteract rumours or half-truths by presenting correct facts. He can also use the grapevine to make certain facts known about which he does not like to make an official statement.

Informal communications are inevitable and they should be fully used by management to serve the objectives of the enterprise. This can be done in two ways. First, management should keep the informal groups informed all concerned organizational matters in a systematic way. Secondly, management should encourage the informal groups to disseminate information among their members and peer groups


Rumour is an undesirable feature of grapevine. It is grapevine information which is communicated without the presence of authentic standards of evidence. It is, therefore the injudicious and untrue part of the grapevine. Rumour is generally incorrect through it may by change be correct. Rumour originates due to several reasons. It frequently arises due to employees’ anxiety and insecurity caused by poor formal communication.

Rumour may also be used by employees to put pressure upon management. Sometimes, rumour arises due to pure maliciousness on the part of employees. Rumour largely depends on the interest and ambiguity which members of the organization perceive. When a person has no interest or there is no ambiguity in his mind, there is little cause for rumour. Rumour tends to change as it passes from one person to another.

The message acquires its own head, tail and wings on the journey. Each person adds or subtracts something from the original message depending on his interest. The rumour gets twisted and distorted as it passes from person to person. As a result, the details given at the beginning of a rumour are lost after a few transmissions. Considerable details are added to it.

Rumour is often created by people who are in a situation of hearing or seeing things but occupy no high position in the organization, for instance, a secretary may over hear a conversation or a storekeeper may see a discarded message. From such small seeds the rumour grows to immense size.

A major outbreak of rumbour can be very dangerous for the organization. Therefore, management must deal with rumours effectively. The best approach in dealing with a rumour is to identify and remove its cause rather than try to kill it after has begun. Once the source of a rumour becomes known, it should be removed as early as possible. Once a rumour’s theme is known and accepted, people distort future messages to conform to the rumour.

Therefore, management must supply the true facts in time preferably through face to face talk. The message should contains facts and not opinions. It should not repeat the rumour. When a roumour is repeated people may assume that it has been confirmed. It is difficult to erase a rumour from the minds of the people. So get the facts across before misconceptions gain a foothold.

The oral message used to remove a rumour should be confirmed in writing and it should be circulated quickly. Management can also take the help of union leaders in combating rumours which are in the interests of neither the workers nor the organization.

Grapevine – Merits & Demerits:


1. Useful for developing group cohesiveness.

2. Serves as an emotional safety value.

3. Effective source of knowing feelings and attitudes of employees.

4. Supplements the channels of official communication.

5. Tells management when to be firm and when to yield.


1. Based on rumours and hearsay

2. Misleads people

3. May breed animosity against particular executives

4. May lead to more talk and less work

5. May distort official channels of communication.

Channels of Communication – Downward, Upward and Horizontal Communication

Managers must provide for communication in three distinct directions – downward, upward, and horizontal. These three directions summarise the path that official communications travel in an organisation. The manager who understands and examines the formal flow of communication is better able to appreciate the barriers to effective organisational communication, as well as the means for overcoming them.

1. Downward Communication:

It flows from individuals in higher levels of the organisation to those at lower levels. Most common forms of downward communication are job instructions, official memos, policy statements, procedures, posters, manuals, and company publications. It is often both inadequate and inaccurate. Employees typically receive such tremendous amounts of downward communication that they selectively decide which messages to fully receive, which to partially receive, and which to disregard.

In large organisations, the process of communicating with employees is undertaken by a staff of communication experts whose usual function is to produce a publication aimed at three purposes – (i) to explain the organisation’s plans and programmes as they are implemented; (ii) to answer complaints and criticisms; and (iii) to defend the status quo and those who are responsible for it. A periodic publication the medium usually selected to accomplish these purposes.

Its intended messages are those which present the organisation’s side of issues. Large organisations are more and more viewed with distrust and suspicion. Although they may not always be successful in convincing the general public that their actions are public- minded, they must try to win and maintain the support of their employees.

2. Upward Communication:

A high-performing organisation needs both effective upward communications as much as effective downward communication. Effective upward communication means getting messages from employees to management. It is difficult to achieve, especially in larger organisations. Some studies suggest that upward communication is the most ineffective of the three formal communication channels. Upper-level managers often do not respond to messages sent from lower-level employees.

On the other hand, the lower-level employees often are reluctant to communicate upward especially when the message contains bad news. Widely used upward communication devices include suggestion boxes, group meetings, participative decision making, and appeal or grievance procedures. In their absence, employees find ways to adapt to non-existent or inadequate upward communication channels, as evidenced by the emergence of underground employee publications in many large organisations.

Effective upward communications provide employees with opportunities to be heard. Top management must depend on subordinates for vital information received from suggestion systems, open-door discussions, attitude surveys, and participative decision meetings. These can provide valuable insight into the thoughts, feelings, and opinions of employees to which managers can respond. Current problems can be corrected and future difficulties can be headed off.

3. Horizontal Communication:

Effective organisations need horizontal communication. Messages are often sent and accurately received, and feedback is frequently obtained. When the supervisor of the accounting department communicates with the director of marketing concerning advertising budget expenditures, the flow of communication is horizontal. Communication flows are the primary considerations in organisational design.

Horizontal communication between production and sales in a business organisation is necessary for the co-ordination of diverse organisational functions. For horizontal communication managers can appoint committees of representatives from the departments.

One plant manager routinely meets each Monday at 7.30 A.M. with each department head to go over the upcoming week’s work schedule, to review progress toward objectives, and to anticipate any problems that will require the attention of more than one department. Such routinely scheduled staff meetings can facilitate horizontal communication. The more interdependent the work of the departments, the greater is the need to formalise horizontal communication.

Channels of Communication (With Advantages and Disadvantages)

The communication network represents the pattern of contacts among the members of an organisation. It mainly depends upon the nature of channels of communication and the number of persons involved in the communication process.

There may be two types of communication networks in the organisation:

1. Formal Communication:

The formal communication are associated with the formal organisation structure. The path of communication which are institutionally determined by the organisation. This type of communication are mostly in black and white. It is also known as “channel of command.”

There may be four types of formal communication in the organisation:

(a) Single Line of Chain Network – In this type of network one person communicates with one person only.

(b) Wheel Communication Network – This type of network represents the communication pattern under which the subordinates can communicate with and through one manager. It is called a wheel network since all communications pass-through the manager who acts as a central authority like a hub of a wheel.

(c) Circular Communication Network – In case of circular network, the message moves in a circle. Each person can communicate with his two neighborhood colleagues. The major disadvantage of circular network is that communication is very slow.

(d) ‘Y’ Communication Network – This network is centralised with information flows along the predetermined paths. Such network might be appropriate for simple operations requiring little intuition among the members of group.

Advantages of Formal Communication:

The following important advantages of formal communication:

(i) It helps to maintain the line of authority of executive.

(ii) It helps to develop better understanding between subordinates and his immediate superior.

(iii) It helps to find out better solution of any problem.

(iv) It helps to develop good relations between leaders and his subordinates.

(v) It makes communication more effective.

Disadvantages of Formal Communication:

The following are the limitations of the formal communication:

(i) The every happening in the organisation cannot be foreseen.

(ii) It increases the workload on the line supervisors because all communications are transmitted through them.

(iii) It increases the chance of transmission errors and reducer the accuracy of the message.

(iv) It implies delay tactics and redtapism process in the organisation.

2. Informal Communication:

This type of communication is also known as – ‘Grapevine’ communication. It represents communication among people free from all sorts of formalities. This type of communication is based on the informal relationship between parties. No formal organisational chart is followed to convey the message.

Such communications include comments, suggestions or any other informal reaction. Everyone is free to communicate with anyone and everyone in the organisation. Sometimes managers also use informal communication when they find it difficult to collect information from the workers.

Advantages of Informal Communication:

The merits of informal communication are as under:

i. It is very useful when information is required to be communicated very quickly. It works faster than formal communication.

ii. The employees can express their feelings, fears, suggestions and apprehensions more freely.

iii. It is free from all formally delegated lines of authority.

iv. It satisfies an important urges of employee to known what is happening other parts of the organisation.

v. It gives opportunity to employees to form social group and communicate with each other.

Disadvantages of Informal Communication:

It suffers from following weakness:

(i) There are many occasions when the grapevine does not carry complete information.

(ii) The personal motives are other dominant it transmitting information through the grapevine.

(iii) The action taken on the basis of such communication may be erratic and may lead the organisation in difficulty.

(iv) The confidential information often leaks out through informal communication.

Channels of Communication in an Organisation

Chester Barnard says, “Communication is the means by which people are linked together in an organisation to achieve a common purpose.” Communication becomes an indispensable task if at least two people have to work together. Thus, for organisations being a cluster of people working for common goals and objectives, communication is a life giving tool. Communication acts as a linking pin for accelerating various functions of management and bringing together superiors and subordinates for common goals.

Organisations are a formal structure with clearly defined hierarchical positions on one hand and on the other hand, within this formal set-up, people develop their own interpersonal linkages.

Thus, communication in an organisation flows through following two channels:

A. Formal communication.

B. Informal communication.

A. Formal Communication:

Formal communication refers to exchange of information and messages within an organisation through formally established channels and is concerned with exchange of official information. Formal communication flows through the hierarchical positions as laid down in the organisational chart. Organisations, being formal structures, follows written mode of communication such as – letters, memos, notices, circulars, handbooks and e-mails.

Formal communication is based on a premise that for the official purposes, communication takes place between positions of authority and as such, not between people holding those positions. Thus, the purpose of formal communication is to carry directives and information from superiors to subordinates, transfer reports, records, suggestions, demands, etc., from subordinates to superiors and transfer of reports, circulars, notes, etc., from one colleague to another.


A good formal communication channel is reflective of a sound organisational functioning as it offers the following advantages:

1. Increases Organisational Efficiency – Formal channels of communication ensure smooth flow of information through organisational hierarchy. It is free from any chaos and is rigid enough not to allow any deviations or distortions. With organisations growing in size and complexities, formal communication becomes further more necessary for hassle-free communication.

2. Better Monitoring and Control – As formal communication follows a scalar chain of command to transfer information, there is absolute clarity as to what information has been sent by whom and to whom. Thus, in case of any problem, it becomes very easy to identify the source and control the issue.

3. Clarity in Communication – Formal communication derives its origin from organisational structure. Thus, it has a clear pre-defined path to follow without any confusion or choice. Moreover, by knowing who can communicate to whom, people are also at ease and comfort in terms of communicational guidelines.

4. Records for Future Reference – Primarily being in written mode, formal communication documents are always preserved and stored for future record and reference. These documents are stored within the organisation and thus are free from any personal intervention.

5. Professional Atmosphere – An organisation characterised with good formal communication reflects a professional atmosphere. Following formal communication for official purposes make information more structured, systematic and relevant.


1. Time-Consuming – Formal communication is bound to follow organisational structure which causes delays. For example, if a level five employee wants to communicate with level two employee, he has to cross all intermediate levels which slowdowns the process.

2. Inflexible – Formal communication is rigid in nature. It follows a particular path and is structured in a pre-defined manner. It does not allow any individual to exercise discretion in initiating changes.

3. Lack of Cordiality – Formal communication is basically a communication between positions and not people holding those positions. Thus, even if people are communicating, there is no personal touch or friendliness in it.

4. Curbs Creativity – Under this communication system, everybody performs their duty by following specific fixed system. They are governed by pre-determined rules and regulations leaving no scope for exercising their creativity or innovation.

Direction of Formal Communication:

Formal communication flows on a pre-determined path of organisational hierarchy without any haphazard movements.

Along the organisational hierarchy, it may flow in the following three directions:

1. Downward communication

2. Upward communication

3. Lateral communication.

1. Downward Communication:

Downward communication may be defined as a flow of communication from a higher level in an organisation to the lower level. In other words, it refers to information moving from superiors to subordinates. It is also known as top-down communication. This communication stream is used by the top level managers to convey work-related information to the employees at lower levels. Employees in turn use this information for performing their jobs as per the expectations of their superiors.

Downward communication is used by the managers for the following purposes:

i. Giving job directions

ii. Explaining company rules, policies and procedures

iii. Providing feedback on employees performance

iv. Issuing circulars, notices and memos

v. Counselling.

Downward communication, if used effectively, may be advantageous in terms of increasing efficiency if clear directives are given, may build up employee morale and motivation and may lead to employee growth and development with proper counselling and guidance.

It may be disadvantageous if downward communication is used as a tool to exercise authority. If downward communication lacks clear instructions and guidelines to do the work, then it may not only be proved to be futile but would also hamper the employee morale.

2. Upward Communication:

Upward communication may be defined as a flow of communication from a lower level in an organisation to the higher level. In other words, it refers to information moving from subordinates to superiors. It is also known as bottom-up communication. Upward communication is a means through which subordinates express themselves and present their work to the superiors. Upward communication also enables management to know the level of actual execution vis-a-vis plans as communicated by them.

Upward communication is used by the managers for the following purposes:

i. Giving periodic reports of work done

ii. Giving suggestions

iii. Sharing grievances

iv. Filled up forms as required by the organisation.

Upward communication also fetches both advantages and disadvantages to the organisation. The most important benefit of upward communication is bringing meaning to the work done. Until and unless work done by subordinates is reported back to superiors, it has no meaning. Second, it enables the managers to exercise control by comparing activity reports with the plans. Besides being job-centric, upward communication also provides a vent to employees to share their problems and grievances with their superiors.

Upward communication has certain limitations also. First, employees may not feel free to discuss their problems for fear of criticism. Second, employees may not give suggestions very frequently due to apprehensions of refusals. Third, upward communication may not be a genuine communication and rather may be a fabricated one for want of superior’s praise and being in his good books.

3. Lateral Communication:

Lateral communication may be defined as flow of communication that takes place at same levels of hierarchy in an organisation. It is also known as horizontal communication. It may be between peers, between managers at same levels or between any horizontally equivalent organisational members. This type of communication is very essential for maintaining a smooth flow of functioning and balance between different departments or different business units.

For example, the production and marketing departments should be well informed of each other’s functioning as marketing schedule and production schedule are interdependent. Such communications are carried out for ensuring coordination, sharing of mutual information and overall organisational development.

Lateral communication may be exercised in the following ways:

i. Inter-departmental meetings

ii. Discussion of expansion plans

iii. Sharing common circulars

iv. Sharing reports having impact on other department

v. Seeking informations

Horizontal or lateral communication is very advantageous. It facilitates the genuine sharing of information without any status issues. Moreover, such communication helps in bringing coordination between activities of various departments and tries to maintain balance between personnel of various departments as it may enable employee repositioning and shuffling.

Lateral communication suffers from certain limitations also. Most prominent problem with this kind of communication is scope of ego-clashes as people are of the same level. If not coordinated properly, lateral communication may cause delays and rift in the departments.

B. Informal Communication:

Informal communication refers to exchange of ideas, views, information and opinions among organisational members without following any prescribed pattern, not falling within the boundaries of rules and regulations and primarily non-official in nature. Such communication does not have any layout and need not be carried out within the organisational premises. According to Bovee and his associates, “informal communication is a flow of information without regard for the formal organisational structure, hierarchical or reporting relationship.”

Informal communication is an outcome of an individual’s basic desire to socialise according to his desires, with the person of his choice, at the time comfortable to him and without any positional pressures. Thus, informal communication is based on the premises of friendship, interests, habits, comfort zone, likes and dislikes, etc.

It may take the shape of discussing problems, venting out personal issues, seeking and giving suggestions, having fun together, etc. It is purely structure less, directionless and boundless. There is no fixed number of communicators in informal communication. Due to this reason, it is also known as – “grapevine”.

Informal communication has the following features:

1. Based on Social Relations – The very origin of informal communication is that it is an outcome of craving to have social informal group to talk freely. Thus, it is developed and built upon social associations among people free from their hierarchical positions and status.

2. Uncontrollable Management – This communication although may carried out within the organisation but is not within the purview of management. It is framed at the desire of people and they only control it. This is an unofficial channel of communication and thus is not a part of formal structure.

3. Flexibility – Informal communication is highly flexible as it is free from any structural boundaries. It may be moulded any time and by any one according to their desires and wishes.

4. Directionless – Informal communication does not follow any specified direction of flow. It may take place between any employees of an organisation irrespective of his position in scalar chain of command.

5. Oral Communication – Informal communication more often uses oral mode and seldom written mode is used. Its primary objective is to fulfill basic human desire to interact for which talking and speaking is the best mode.

6. Spontaneous – Informal communication may take place at any time, between any members of organisation instantaneously. It is not required to be designed and planned in advance.

7. Means of Expression – People may feel suffocated while obeying organisational rules and regulations and following formal structures. Informal communication acts as a breather and platform for candid expression.


Informal communication, being deliberately initiated by people, has the following advantages:

1. Speedy Communication:

This medium of communication which is purely informal and unofficial is initiated as and when desired by the communicators. It is not subject to any permissions, notices or approvals. Therefore, it spreads very fast and with wide coverage. It is normally said that informal information spreads as fast as fire in the forest.

2. Source of Social Need Fulfillment:

The most central advantage and the main purpose for informal communication is that it is a source of social need fulfillment and affiliations. People, being social creatures, have a desire to talk informally with each other. While being on work, one wishes to talk and spend time for matters other than work such as taking lunch together, discussing about a common hobby in tea break, venting out after having a scolding from boss, etc. Informal communication provides a platform for such discussions. With such discussions, people are satiated and in turn, they work contentedly.

3. Genuine Feedbacks:

While communicating informally, people do not present an artificial face and are frank in their discussions. Grapevines make it possible to receive genuine and quick feedbacks. From manager’s point of view, he may learn about employee by gathering information on employee satisfaction level, his expectations, any problems he is facing, future plans, etc.

From employee’s point of view, he may gather information on what are the expectations of management from him and whether he is able to meet those expectations, what manager thinks about him, etc. Feedbacks in formal structure are usually manipulated and fabricated, thus non-reliable.

4. Improved Interpersonal Relationships:

Formal communication works like watertight compartments without giving any flexibility to people to develop bondings and affiliations. This gap is filled by informal communication. It facilitates people to clarify misunderstandings, understand each other in a better way, and work like a team with each other and not against each other.

Managers are better able to understand behaviour and core capabilities of their employees and may make use of it for better performance. With informal communication, they may clear out any misunderstanding or grudges and regain cordiality. Thus, in overall, informal communication is a source for building healthy interpersonal relationships and bonding among employees.

5. Compliments Formal Communication:

Informal communication despite not having any formal sanction is inevitable and functions parallel to the formal structure. Good informal structure compliments the existence of formal structure in many ways. One, it may be used to spread information rapidly, which otherwise would not have been possible. Second, through informal channel, a manager may pass on information which the formal structure does not permit. For example, before an interview, giving few advices.

6. Sense of-Belonging:

Having an informal communication in an organisation provides a sense of belonging to the employees. With informal channel, they feel more secure and contended. It provides them a feeling of being human having their own individual identity rather than just instruments to fill up the positional roles. By having informal affiliations, work becomes amiable and people around appears like a family.


There is a saying – “nothing comes like a free lunch.” That is one has to pay for everything.

Same is true for informal communication also. Despite many advantages, it has certain limitations too.

These are stated as under:

1. Rumours:

Rumour is the most undesirable and severe repercussion of grapevine. It may be defined as that information which is circulated through grapevine without any authentic evidence of its existence. Rumours may exist as an outcome of malicious intention or just due to lack of knowledge. Such rumours may disturb the smooth functioning of an organisation, may create conflicts and misunderstanding among employees and may lead to a turbulent organisational environment.

2. Time Wastage:

Informal communication always attracts people as it relates to conversation of their interest. As a result, people keep on extending such talks at the cost of their formal tasks. It also tends to distort people from core functioning by opening up avenues for satisfying social needs. For example going for shopping in office hours, extending coffee breaks, etc.

3. Leads to Conflicts:

Another major disadvantage of informal communication is that it leads to conflicts among employees. There is a saying “Too much of familiarity breeds contempt.” Same holds true for informal communication also. People intermingling very frequently comes to know about each other’s positives such as – strengths and weaknesses emotional levels, fears, beliefs, apprehensions, etc. These informations may be misused or may lure somebody to take undue advantage of it, leading to conflicts.

4. Information Leakage:

Due to informal linkages, people may disclose some vital information at the wrong time which may create confusions and conflicts or in front of wrong people who may misuse such information. Such information leakage may cause a huge damage to the organisation both internally and externally.

5. Lack of Evidence and Problems in Accountability Fixation:

Informal communication, being primarily oral in nature, does not keep a check on what is being said and by whom. Keeping of documentary evidence of such interactions is not possible and thus onus of spreading a rumour cannot be placed on anybody.

6. Non-Reliable Information:

Information gathered through informal communication channel cannot be relied upon. Such information has no authentic base to prove its genuineness, may be distorted or may be only a viewpoint rather than a fact. No formal decisions can be taken on the basis of such informations.

Channels of Communication – Informal Communication (With Types, Advantages and Disadvantages)

Communications do not flow randomly within organisations, nor do they necessarily follow the formal pathways published in an organisational chart. Sociometry helps in the study of informal pathways. In it, members of a group or unit are asked about the other members with whom they communicate. Then a diagram of these patterns, known as a sociogram, is drawn showing the pathways used for communication. The patterns of informal communications can be graphically represented by constructing sociograms.

This can provide a manager with insights into the informal as well as the formal patterns that control the flow of communications within a department. The sociogram also singles out a liaison person, who is at the centre of information flow. Liaisons have been referred to as “the ‘cement’ that holds the structural ‘bricks’ of an organisation together; when the liaisons are removed, a system tends to fall apart into isolated cliques.”

Types of Informal Communication:

1. The Grapevine:

The use of the term grapevine is originated during the Civil War, when telegraph lines were strung loosely between trees and soldiers said the wires resembled a grapevine. Messages that were difficult to decipher were said to have come through “the grapevine”. Today’s grapevine cuts across formal channels of communication. Through it passes an assortment of facts, opinions, suspicions, and rumours that typically do not move through the formal channels.

Research suggests – (i) organisations have several grapevine systems, (ii) information travelling in a grapevine does not follow an orderly path, and (iii) organisationally related grapevine information is about 75 per cent accurate. The cluster pattern of grapevine in which only select individuals repeat what they hear, is the pattern most commonly found in organisations.

2. Rumours:

Rumours are an everyday part of business and management. A rumour can be defined as an unverified belief that is in general circulation inside the organisation (an internal rumour) or in the organisation’s external environment (an external rumour).

A rumour has three components:

(i) The Target – It is the object of the rumour.

(ii) The Allegation – It is the rumour’s point about the target.

(iii) Source – The rumour has a source, the communicator of the rumour.

Some rumours that travel through the company grapevine or outside the organisation are true. Regardless of their validity, rumours tend to flourish if their content is entertaining, important, and ambiguous. Entertaining rumours stay because people find them interesting. Important rumours have staying power because their information concerns people. For example, rumours run rampant in a company shortly after it has been acquired by another firm.

Many rumours are believed because the information is important to the acquired work force. Employees seek information to reduce their uncertainty and anxiety about their jobs and the future of the company. Ambiguous rumours because their lack of clarity makes it difficult to quickly refute and dismiss the rumour. As grapevines, rumours, and gossip are deeply ingrained in organisational life. Managers must be tuned in and listen to what is being said.

Falsified facts travelling through the rumour mill can be corrected by feeding accurate information to primary communicators or liaison individuals. Also, informal communication systems such as the grapevine can be used by managers to benefit programmes, policies, or plans. The grapevine can provide yet another communication vehicle to keep the work force informed about job-related matters.

Interpersonal Communication:

Interpersonal communications travel from individual to individual in face-to-face and group settings and the forms vary from direct verbal orders to casual, nonverbal expression. It is the primary means of managerial communication; on a typical day, over three fourths of a manager’s communications occur via face-to-face interactions.

When managers attempt to communicate with other people the problems that can arise can be traced to perceptual and interpersonal style differences. Each manager perceives the world in terms of his background, experiences, personality, frame of reference, and attitude. The managers relate to and learn from the environment through information received and transmitted. The way managers receive and transmit information partly depends on how they relate to themselves and others. Some differences in interpersonal communication styles may also be due to gender.

Advantages of Informal Communication:

(i) Faster Speed – Communications are transmitted at a faster speed.

(ii) Dynamic and Quick – Informal communication is dynamic and reacts quickly. Informal channels have their sanction in the social groups that develop within the organisation and messages are communicated freely with each other, it is free from all formally delegated lines of authority.

(iii) Multi-Dimensional – There is no channel of command in informal communication. Discussion may be made on any topic of interest to the group and with any person irrespective of his position in the organisation chart. It may go to any extent. All limits as to direction and degree of communication are self- imposed. Thus informal communication promotes co­operation on sound lines.

(iv) Supplement – At times, informal communication may supplement the formal channel. If properly utilised, it may disseminate and clarify management’s viewpoints which otherwise may not be appealing when sent through formal channels.

(v) Feedback – Informal communication may also provide feedback to managers on possible effects of a decision taken by the management.

Disadvantages of Informal Communication:

(i) Misinforming and Misleading – It very often carries half-truths, rumours and distorted information with an alarming rate of speed. In the absence of a mechanism for authentication of the news and views, the members of the organisation are likely to be misinformed and misled by informal organisation.

(ii) Responsibility cannot be fixed – In the absence of a proper channel of command, responsibility of an action or of erratic information cannot be fixed and therefore, any action taken on the basis of such communication may be erratic and may lead the organisation in difficulty.

To conclude no one system formal or informal is complete. Both can complement and supplement each other. Both the systems exist in all organisations. While some messages are passed through formal communication, some others may spread through informal deliberations, grapevine, etc. The two channels provide opportunities for interaction between the functional and social systems of an organisation.