Formal and Informal Communication: an Organizational Approach

nut and loose dialogue An shapingal Approach By Masayu Shahnaz Winarko Student Number 43005860 Faculty of Economics, Business and fairness University of Queensland Brisbane, Queensland, Australia 2012 Abstract This musical theme concentrates on the discussion of courtly and daily converse and its usage in organizational coming. Although both dress and on the loose(p) confabulation support the wholesome- macrocosm of organizations, studies suggest that versed converse has taken a big mountain range in determining the productiveness in organizations and it has derived many benefits and many ch eachenges. Managers should turn in how to deal ith such thing and optimize the advantages that pass on create nourish added for the bon ton and overcome the obstacles it might create. Many explorees cede studied and given up ends on this matter and its application in businesses domain of a functionwide. 1. ledger entry confabulation eliminates in both single sect ion in life, from someoneal to professional issues. It is necessary that it supports the flux of social life and federations shapefdepression. It has been taking an fundamental mathematical function in organizations thitherfore, many studies concentrate in the discussion of organizational parley. It is believed that both globe and cozy converse excise rganizations productivity (Litterst & Eyo). However, unlike musket ball talk, informal parley is slight controllable and unstructured. knowledgeable colloquy plays a strong role in determining the result of scientific field by generating new intellects or improving the existed idea (Hagstrom). statuesque AND versed COMMUNICATION AN organizational 1 fire Since informal conference has a strong impact on organizational performance, managers should be able to manage the flow of not plainly formal, but overly informal confabulation. As business grows and the requirements needed in surviving at bottom the competitio n keep adding on, xecutives should make the most trenchant give of every resource available and by improving the flow of conversation is ane of the delegacys. This battlefield will provide an analysis in dealing with managerial challenges regarding controlling the flow of informal conference and what managers should do to make the trump out of it. 2. Literature Review 2. 1 Communication Communication is the activity to lift messages through different convey, such as words, symbols and signs. found on Dun drop and Moriarty (1998), chat is a human activity that link mint together and creates relationship. In order to create a succeederful intercourse, t requires deuce-ace elements they atomic number 18 the sender, the message and the receiver. Both the sender and the receiver pay off to sh atomic number 18 the said(prenominal) understanding so that the message can be fully transmitted. The success of communication is determined by how the message is silent by t he receiver. As defined by Gamble and Gamble (2002), communication is the transfer of consequence and there argon seven essentials of communication, which ar mickle, message, gestates, noise, context, feedback and effect. Although there argon 126 different definitions on communication (Ruben & Stewart, 2006), but many scholars defined it as an convince of information.Ruben & Stewart (2006) also stated that success in 1s race may well depend on communication. non totally in the individual performance, communication also determines organizations performance. This record write up will point out the importance of formal and informal communication and its applications inwardly an organization. 2. 2 Formal Communication Formal communication is an nonionised and structured communication within an organization. The communication occurs in many flows. upwardly 2 FORMAL AND cozy COMMUNICATION AN organisational APPROACH communication ushers the communication from employees to e xecutives. Downward ommunication represents the flow of communication from executives to write down level employees. plain communication shows the flow of communication within the same(p) level of community, for poser the communication flow of make manager and finance manager. The last unmatched is diagonal communication, which represents the communication of the upper level of a particular piece with the lower level employees in an opposite division. The types of formal communication within an organization that are commonly used are meetings, conference, ph superstar and only(a) calls, fellowship bulletin and interview. 2. 3 daily Communication loose communication is nevitable in every organizational entity. By communicating with other wad, employees can hold similarity in hobbies, opinions and experiences, which result in universe friends. Informal communication is ground on social relationship among people (Litterst & Eyo, 1982). Informal communication is relaxed, casual and allot through word-? of-? mouth. Informal networks are communication links mingled with individuals and sections that bypass the formal structures in an organization (Smith, 2011). There are four flows in communication networks the startle single is single drawing string in which one person tells another person, the here and now one is claver hain in which one person tells the others, the third one is probability drawing string in which one person tells another person who pass the word to someone else and the fourth one is the cluster arrange in which one person tells other two or trio people who spread the intelligence information to other two or three people as well. There is another crucial term in informal communication, which is grapevine. grape is best described as the way prate travels through organizations. Robbins and colleagues (2008) indicate the characteristics of grapevine it is not controlled by direction, it is much presumptive and reliable for the employees and it serves he self-? interests of those in the group. 2. 4 Differences between Formal and Informal Communication FORMAL AND INFORMAL COMMUNICATION AN organisational 3 APPROACH No. 1. 2. 3. 4. 5. 6. Elements rendering Flexibility Degree of control Evidence crack Formal Communication Informal Communication Takes place through go through formal channels Flexible by Cannot be controlled No documental establishment is not followed formal channels non flexible Controlled management Has documentary proof Official discipline are highly maintained is Discipline hunt of information Flows upwards, Flows freely to all downwards, horizontal directions and iagonal 7. 8. 9. 10. 11. 12. 13. 14. 2. 5 Differentiation and costless Studies have attempted to determine which one between formal and informal communication has the most impact in organizations. look for suggest that formal communication takes role in the authority in organizational hierarchy (Dow, 1988 Jablin, 1987), differentiation of labor and specialized tasks (Dow, 1988 Jablin, 1987) and mechanism for coordination of work (Dow, 1988). Meanwhile, business communicators strongly believe that informal 4 FORMAL AND INFORMAL COMMUNICATION AN ORGANIZATIONAL APPROACH Speed Secrecy Rumor contortion Time MisunderstandingCost Mistakes sulky Can be maintained occur non distorted Requires oft dates time misunderstanding Expensive Very low Very prompt Difficult to maintain Small hap of narrative to Rumor can occur Can be distorted little time occur Less expensive Very high Not much chance of Misunderstanding may communication plays an important role in change magnitude innovations within organizations (Johnson, 1990). Johnson, Donohue, Atkin and Johnson (1994) conducted a direct on the direction of formal and informal communication within an organization through three main perspectives salience, channel factors and channel usage. The research suggested that the employees erceive inform al communication as more trenchant and better used in achieving go withs mission. However, in foothold of cultural means, formal communication is perceived as a more appropriate way to communicate. 3. Case Study start and Tomic (2011) conducted a research regarding the role of informal communication in creating company brand image and preferences. In this research, the object was an international turnkey contractor specializing in cover and gas industry. This company employed more than 38,000 employees all over the world at the time this research was conducted. This company operates in business market, so not many eople acknowledge this companys universe. However, this company concerns more or less its brand image. They use formal approach in spreading its existence to college graduates by coming to the university and do presentations on its company profile. Nevertheless, formal communication only does so much. They also rely heavy on informal communication role to spread t he word-? of-? mouth on the culture of the company. For example, people know from their acquaintances that this company gives high salary to their employees and this news draws them to working for this company. The spot example of caseful study comes from the research ofAndrea, Arnaldo and Romano (2011). The case was about Italian leading mineral water and soft crisp company. In 2008, the company held 16% of the segment mineral water in Italy, 12% in soft drink and 19% in tea-? based drink. Its ROE was 18. 1% while its competitor was only 13. 8%. Its stemma turnover was 12. 6 compared to its major competitor whose inventory turnover was only 6. 15. The study focuses on determining the role of formal and informal communication in qualification this FORMAL AND INFORMAL COMMUNICATION AN ORGANIZATIONAL 5 APPROACH company a leader in its filed. The study was conducted in three steps. The first one is dentifying the units that engage in the process of purchasing, manufacturing and lo gistics. The randomness step is trace the flow of formal and informal communication during those activities. The final step is to delineate how both formal and informal communication change over time that results in a synchronized workflow of the company. The study suggested that formal communication was highly important in achieving internal integration (Andrea, Arnaldo & Romano, 2011), while informal communication is important in problem understand because it occurs in concrete time (Pagell). 4. Conclusion Based on the present and former studies conducted y many scholars on various objects (focuses on organizations in this matter), it can be concluded that both formal and informal communication are important in the productivity of the company and its performance as a whole. Managers should severalize in which field the communication should be optimized and which way to use. There are several differentiations in the work progress on which it is better to use either formal or informal communication and managers should be well aware of it so they would not imply the wrongfulness method of communication. As in optimizing the informal communication, managers should use personal approach as it ravels closely and is more favorable by the employees. Moreover, informal communication can be used in building company brand and image, so managers should be really careful that only the good value of the company is transmitted through informal communication. 6 FORMAL AND INFORMAL COMMUNICATION AN ORGANIZATIONAL APPROACH References Andrea, F, Arnaldo, C & Romando, P 2011, Case study understanding how formal and informal communication affect purchasing, manufacturing and logistics integration, Advances In Management, vol. 4, no. 7, pp. 22-? 32. First, I, Tomic, M 2011, Formal and informal communication channels in creatingFormal and Informal Communication an Organizational ApproachFormal and Informal Communication An Organizational Approach By Masayu Shahnaz Winarko Student Number 43005860 Faculty of Economics, Business and Law University of Queensland Brisbane, Queensland, Australia 2012 Abstract This paper concentrates on the discussion of formal and informal communication and its usage in organizational approach. Although both formal and informal communication support the well-being of organizations, studies suggest that informal communication has taken a big part in determining the productivity in organizations and it has derived many benefits and many challenges. Managers should know how to deal ith such thing and optimize the advantages that will create value added for the company and overcome the obstacles it might create. Many researches have studied and given results on this matter and its application in businesses worldwide. 1. Introduction Communication occurs in every single section in life, from personal to professional issues. It is inevitable that it supports the flow of social life and companys workflow. It has been taking an i mportant role in organizations therefore, many studies concentrate in the discussion of organizational communication. It is believed that both formal and informal communication affect rganizations productivity (Litterst & Eyo). However, unlike formal communication, informal communication is less controllable and unstructured. Informal communication plays a strong role in determining the result of scientific field by generating new ideas or improving the existed idea (Hagstrom). FORMAL AND INFORMAL COMMUNICATION AN ORGANIZATIONAL 1 APPROACH Since informal communication has a strong impact on organizational performance, managers should be able to manage the flow of not only formal, but also informal communication. As business grows and the requirements needed in surviving within the competition keep adding on, xecutives should make the most effective use of every resource available and by improving the flow of communication is one of the ways. This study will provide an analysis in de aling with managerial challenges regarding controlling the flow of informal communication and what managers should do to make the best of it. 2. Literature Review 2. 1 Communication Communication is the activity to convey messages through different channels, such as words, symbols and signs. Based on Duncan and Moriarty (1998), communication is a human activity that links people together and creates relationship. In order to create a successful communication, t requires three elements they are the sender, the message and the receiver. Both the sender and the receiver have to share the same understanding so that the message can be fully transmitted. The success of communication is determined by how the message is understood by the receiver. As defined by Gamble and Gamble (2002), communication is the transfer of meaning and there are seven essentials of communication, which are people, message, channels, noise, context, feedback and effect. Although there are 126 different definition s on communication (Ruben & Stewart, 2006), but many scholars defined it as an exchange of information.Ruben & Stewart (2006) also stated that success in ones career may well depend on communication. Not only in the individual performance, communication also determines organizations performance. This present study will point out the importance of formal and informal communication and its applications within an organization. 2. 2 Formal Communication Formal communication is an organized and structured communication within an organization. The communication occurs in many flows. Upwards 2 FORMAL AND INFORMAL COMMUNICATION AN ORGANIZATIONAL APPROACH communication indicates the communication from employees to executives. Downward ommunication represents the flow of communication from executives to lower level employees. Horizontal communication shows the flow of communication within the same level of company, for example the communication flow of brand manager and finance manager. The l ast one is diagonal communication, which represents the communication of the upper level of a particular division with the lower level employees in another division. The types of formal communication within an organization that are commonly used are meetings, conference, phone calls, company bulletin and interview. 2. 3 Informal Communication Informal communication is nevitable in every organizational entity. By communicating with other people, employees can find similarity in hobbies, opinions and experiences, which result in being friends. Informal communication is based on social relationship among people (Litterst & Eyo, 1982). Informal communication is relaxed, casual and spread through word-? of-? mouth. Informal networks are communication links between individuals and sections that bypass the formal structures in an organization (Smith, 2011). There are four flows in communication networks the first one is single strand in which one person tells another person, the second one is gossip hain in which one person tells the others, the third one is probability chain in which one person tells another person who pass the news to someone else and the fourth one is the cluster chain in which one person tells other two or three people who spread the news to other two or three people as well. There is another important term in informal communication, which is grapevine. Grapevine is best described as the way gossip travels through organizations. Robbins and colleagues (2008) indicate the characteristics of grapevine it is not controlled by management, it is more believable and reliable for the employees and it serves he self-? interests of those in the group. 2. 4 Differences between Formal and Informal Communication FORMAL AND INFORMAL COMMUNICATION AN ORGANIZATIONAL 3 APPROACH No. 1. 2. 3. 4. 5. 6. Elements Definition Flexibility Degree of control Evidence Discipline Formal Communication Informal Communication Takes place through Passing formal channels Flexibl e by Cannot be controlled No documentary proof is not followed formal channels Not flexible Controlled management Has documentary proof Official discipline are highly maintained is Discipline Flow of information Flows upwards, Flows freely to all downwards, horizontal directions and iagonal 7. 8. 9. 10. 11. 12. 13. 14. 2. 5 Differentiation and Complimentary Studies have attempted to determine which one between formal and informal communication has the most impact in organizations. Research suggest that formal communication takes role in the authority in organizational hierarchy (Dow, 1988 Jablin, 1987), differentiation of labor and specialized tasks (Dow, 1988 Jablin, 1987) and mechanism for coordination of work (Dow, 1988). Meanwhile, business communicators strongly believe that informal 4 FORMAL AND INFORMAL COMMUNICATION AN ORGANIZATIONAL APPROACH Speed Secrecy Rumor Distortion Time MisunderstandingCost Mistakes Slow Can be maintained occur Not distorted Requires much time misund erstanding Expensive Very low Very fast Difficult to maintain Small chance of rumor to Rumor can occur Can be distorted Less time occur Less expensive Very high Not much chance of Misunderstanding may communication plays an important role in increasing innovations within organizations (Johnson, 1990). Johnson, Donohue, Atkin and Johnson (1994) conducted a study on the means of formal and informal communication within an organization through three main perspectives salience, channel factors and channel usage. The research suggested that the employees erceive informal communication as more effective and better used in achieving companys mission. However, in terms of cultural means, formal communication is perceived as a more appropriate way to communicate. 3. Case Study First and Tomic (2011) conducted a research regarding the role of informal communication in creating company brand image and preferences. In this research, the object was an international turnkey contractor specializin g in oil and gas industry. This company employed more than 38,000 employees all over the world at the time this research was conducted. This company operates in business market, so not many eople acknowledge this companys existence. However, this company concerns about its brand image. They use formal approach in spreading its existence to college graduates by coming to the university and do presentations on its company profile. Nevertheless, formal communication only does so much. They also rely heavily on informal communication role to spread the word-? of-? mouth on the culture of the company. For example, people know from their acquaintances that this company gives high salary to their employees and this news draws them to working for this company. The second example of case study comes from the research ofAndrea, Arnaldo and Romano (2011). The case was about Italian leading mineral water and soft drink company. In 2008, the company held 16% of the segment mineral water in Italy , 12% in soft drink and 19% in tea-? based drink. Its ROE was 18. 1% while its competitor was only 13. 8%. Its inventory turnover was 12. 6 compared to its major competitor whose inventory turnover was only 6. 15. The study focuses on determining the role of formal and informal communication in making this FORMAL AND INFORMAL COMMUNICATION AN ORGANIZATIONAL 5 APPROACH company a leader in its filed. The study was conducted in three steps. The first one is dentifying the units that engage in the process of purchasing, manufacturing and logistics. The second step is tracing the flow of formal and informal communication during those activities. The final step is to identify how both formal and informal communication improved over time that results in a synchronized workflow of the company. The study suggested that formal communication was highly important in achieving internal integration (Andrea, Arnaldo & Romano, 2011), while informal communication is important in problem solving beca use it occurs in real time (Pagell). 4. Conclusion Based on the present and former studies conducted y many scholars on various objects (focuses on organizations in this matter), it can be concluded that both formal and informal communication are important in the productivity of the company and its performance as a whole. Managers should identify in which field the communication should be optimized and which way to use. There are several differentiations in the work progress on which it is better to use either formal or informal communication and managers should be well aware of it so they would not imply the wrong method of communication. As in optimizing the informal communication, managers should use personal approach as it ravels fast and is more favorable by the employees. Moreover, informal communication can be used in building company brand and image, so managers should be really careful that only the good values of the company is transmitted through informal communication. 6 FORMAL AND INFORMAL COMMUNICATION AN ORGANIZATIONAL APPROACH References Andrea, F, Arnaldo, C & Romando, P 2011, Case study understanding how formal and informal communication affect purchasing, manufacturing and logistics integration, Advances In Management, vol. 4, no. 7, pp. 22-? 32. First, I, Tomic, M 2011, Formal and informal communication channels in creating