By now you know that business communication can take different forms and flow between different kinds of senders and receivers. Another way to classify communication is by network.

An organization’s formal communication network is comprised of all the communication that runs along its official lines of authority. In other words, the formal network follows reporting relationships. As you might expect, when a manager sends an email to her sales team describing the new commission structure for the next set of sales targets, that email (an example of downward communication) is being sent along the company’s formal network that connects managers to their subordinates.

An informal communication network, on the other hand, doesn’t follow authority lines and is established around the social affiliation of members of an organization. Such networks are also described as “grapevine communication.” They may come into being through the rumor mill, social networking, graffiti, spoof newsletters, and spontaneous water-cooler conversations.

Informal versus Formal Networks

• Formal communication follows practices shaped by hierarchy, technology systems, and official policy.
• Formal communication usually involves documentation, while informal communication usually leaves no recorded trace for others to find or share.
• Formal communications in traditional organizations are frequently “one-way”: They are initiated by management and received by employees.
• Formal Communication content is perceived as authoritative because it originates from the highest levels of the company.
• Informal communication occurs in any direction and takes place between individuals of different status and roles.
• Informal communication frequently crosses boundaries within an organization and is commonly separate from work flows. That is, it often occurs between people who do not work together directly but share an affiliation or a common interest in the organization’s activities and/or a motivation to perform their jobs well.
• Informal communication occurs outside an organization’s established channels for conveying messages and transmitting information.

In the past, many organizations considered informal communication (generally associated with interpersonal, horizontal communication) a hindrance to effective organizational performance and tried to stamp it out. This is no longer the case. The maintenance of personal networks and social relationships through information communication is understood to be a key factor in how people get work done. It might surprise you to know that 75 percent of all organizations’ practices, policies, and procedures are shared through grapevine communication.^[1]

While informal communication is important to an organization, it also may have disadvantages. When it takes the form of a “rumor mill” spreading misinformation, informal communication is harmful and difficult to shut down because its sources cannot be identified by management. Casual conversations are often spontaneous, and participants may make incorrect statements or promulgate inaccurate information. Less accountability is expected from informal communications, which can cause people to be indiscreet, careless in their choice of words, or disclose sensitive information.