Informal & Formal Networks

Informal Networks

Informal communication can be defined as passing information outside the official channels, for example employees chatting in the canteen or pub. It can affect the future of a business, particularly if the formal system has broken down.

Formal Networks

This takes place within the official channels, i.e. the lines of communication approved by senior management, for example a marketing manager talking to the marketing director.

Communication channels are established by the organisation and are accepted and recognised by employees and managers. Formal Networks are split into two different areas which are centralised and decentralised networks.

Centralised Networks

In this network the information must pass through a central position. This is ideal for simple problems which are quick. There is a possibility that the centralised position can become overloaded. Centralised networks can be put into three categories which are: the Y, the chain and the wheel.

The Y chain is an example of formal communication within a hierarchy such as in the police force and the army, where information needs to be passed from many superiors to the lower level workers.

The Chain is where one person passes information to the others, who then pass it on. This is a formal approach that tends to be by adopted organisations such as the Civil Service. The main advantage is that there is a leader at the top of the hierarchy who can oversee communications downwards and upwards to different areas of the business. One problem may be the isolation felt by those at the bottom of the network as they feel they have no contact with the bosses.

The Wheel pattern has one person in the centre who feeds information out to each individual. This network is particularly good at solving problems as everybody is involved in the communication.

Decentralised Networks

In decentralised networks, the information is generally passed around to all employees. Decentralised networks can be put into two categories, the circle and all channels.

The Circle In a circle it is possible to communicate with any two others as shown in the diagram. This type of communication may occur between middle managers from different departments at the same level of the organisation. The main problem with this type of network is that decision making can be slow or poor because of a lack of co-ordination.

The ”All Channel“ Network communication system might be used in small group environments. It provides the best solution to difficult problems as everyone is involved. This type of network may be used when a department decides to ”brainstorm“. Its disadvantages are that it is slow as so many people need to be consulted.