Page 260 - Business Principles and Management

Chapter 10 • Organizational Communications

Career tip
COMMUNICATION NETWORKS
A communication network is the structure through which information flows in
a business. Communication networks can be formal or informal. Employees are most happy
and productive when they
FORMAL NETWORKS A formal communication network is the system of official chan- work for a business culture
nels that carry organizationally approved messages. These channels generally fol- that matches their personal-
low the reporting relationships in the firm. Formal communication flows upward, ity. In which type of commu-
downward, and across the organization in a prescribed manner. Typically, certain nication atmosphere do you
information, such as budget allocations, flows downward from top-level managers think you would be most
to lower-level managers. Other information, such as requests for budget expendi- productive? Do you like
tures, flows from the bottom to the top of the organization. open informal communica-
Upward communication includes oral and written reports from lower-level to tion, or do you like more
upper-level managers. Usually, upper-level managers rely on lower-level managers formal, rule-based commu-
for information that deals with new or unusual problems, the quality of employee nication? Identify the types
performance, and the way employees feel about their jobs and the company. Super- of jobs that match your pre-
visors receive upward communication from their subordinates about such things as ferred communication style.
project status and suggestions for making a task more efficient.
Organizations with closed, rather than open, communications are less likely to
benefit from upward communication. Upward communication is subject to distor-
tion, especially in corporate cultures that are relatively closed. Supervisors, for
example, might withhold or distort upward-flowing information when problems
appear to reflect negatively on their performance. On the other hand, a supervisor
might exaggerate information about successes. In a closed culture, employees often
fear revealing negative information and avoid making honest criticisms.
Downward communication in organizations occurs mainly by memos, e-mails,
reports, and manuals. To be effective, this information should be timely and clear.
In organizations with closed communications, there is often no opportunity for
feedback, because information does not flow upward easily. However, in open
cultures, employees receive downward-flowing information at meetings and their
feedback is welcome.
Lateral communication flows horizontally or across the organization. For
example, the production manager in one plant might want to know what problems
other production managers face. Perhaps common problems could be solved jointly.
However, many organizations do not have easy and fast channels for such commu-
nications. In a business with an open corporate culture, lateral communications are
more likely to exist. One communication expert has estimated that 80 percent of
poor management decisions occur because of ineffective communications.

INFORMAL NETWORKS Like formal communication networks, informal networks
exist in all organizations. Informal communication networks are the unofficial
ways that employees share information in an organization. The most common
informal networks include small informal groups and the grapevine. Informal
networks rely heavily on interpersonal communications and e-mail.
A great deal of communicating occurs among small informal groups, espe-
cially among employees who get along well together. These employees may or
may not have the same supervisors, but often they do. They share information
about the organization, assist one another in solving work problems, and look
after one another. Members may even support one another when conflicts arise
with other employees. Most employees belong to a small informal group.
Managers should be aware of informal groups. Often informal groups have
more influence than managers do over the behavior of individual workers. It
is extremely important that informal groups support the efforts of the entire
business. If they do not, informal groups can interfere with business goals and,

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