What Is Informal Communication In Business Organizations?

Communication plays an important role in every single part of our lives, whether it be personal or professional — from the relationships with your partners, your family members, to the relationships with your colleagues and employers. It is found that informal communication helps to keep these relationships stable and healthy — which is, after all, what we all hope for.

A business organization is like a human body, and it can only function with utmost efficiency and productivity when all body parts work well together. Therefore, business organizations cannot function properly without internal communication — the nervous system of a company that makes sure managers (the brain) knows what is going on, and that employees know what, how, and why to do specific tasks and projects. The flow of communication can be both formal and informal. Formal communication is compared to arteries of a living being, whereas informal communication is like veins. The latter is a supplement to the former. Where formal communication fails to operate, informal communication is used. While informal communication has a controversial impact, it is undoubtedly an inevitable part of a business and can be an amazing tool if leaders know how to utilize informal communication.

>> Read more: How to keep your employees motivated during COVID-19

What is it then? Informal communication is a casual network between coworkers without using formal methods or structures in the workplace. It is also referred to as the “grapevine” when colleagues chat or gossip about what’s going on in the company. The purpose of informal communication is to share information and create connections between people in the company, regardless of any hierarchical restrictions. It establishes personal contacts, makes friendships, influences and motivates one another. Intimate conversations also help resolve conflicts, improves relationships and supplements official channels. This type of communication is conveyed through verbal and gestural means such as personal conversations, spontaneous suggestions, facial expressions, body movements, etc.

There are four types of informal communication: single strand, gossip chain, probability chain, and cluster chain. A single strand is when one person communicates with one person and then they go and communicate with another one person. Gossip chain is group conversation where everyone is talking to each other informally. Probability chain is a random process in which information may move from one person to any other person or persons according to the law of probability. Lastly, cluster chain, which is mostly used, is when one person shares information with a group of selected individuals and in turn each of those individuals shares that information with others.

What is informal communication’s role in helping business leaders?

Better quality feedback. Employees may become unusually quiet during difficult feedback meetings and other formal feedback forms. You can discover more about the main issues and what your employees truly think by catching up with them informally. Employees may be prompted to provide information that they would normally keep to themselves through informal chat. Issues that wouldn’t have otherwise come to light can then be dealt with.

Performance management process. The formal nature of performance management can be intimidating, therefore a casual approach might be beneficial. An informal talk can often remedy the problem if an employee is not achieving the required standards or is consistently late. Simply having a quiet conversation with someone can serve to drive home a message that doesn’t need to be formalized or recorded.

Enhances your reward & recognition program. As important as a formal thank you is, it’s the daily praise and encouragement that keeps your team going. Using informal communication to recognize your staff’s achievements will make everyone feel warm and fuzzy, whether it’s a brief thank you for all your hard work at the end of a long day or a Kudos mention.

Increases innovation. It can help to foster a more imaginative and creative environment in the workplace. It encourages employees to share their thoughts, feelings, and opinions, which can foster a sense of belonging and team spirit.

>> Read more: Mental Health and Wellbeing in the Workplace

What is informal communication’s role in enhancing the workplace?

Builds interpersonal relationships. When your only interactions are formal, it’s difficult to form strong bonds. That is why social interactions, such as a quick catch up in the kitchen or a passing comment, can aid in the development of rapport within your organization.

In formal settings. A casual chat at the start of a formal meeting is a terrific approach to break the ice. When it comes to communication styles, we all have our own preferences. Some people will perform better if they are first given the opportunity to engage in more informal dialogue.

While it is well proven that informal communication plays an important role in building a good and strong work culture and environment, organizations need to understand that the “grapevine” can leave harmful impacts if not used wisely. Distorted meaning, rumor spreading, misunderstanding, non-cooperation, and even information leaking can all be a result of the “grapevine” when business leaders cannot control and implement informal communication correctly. Therefore, it is important that managers understand fully the importance as well as the negative effects that informal communication has on a business and the people in it. Having said that, companies should continue to encourage informal communications and interpersonal relationships throughout the company so as to maximize the benefits of the “grapevine”.


Sands, Laura. “Why Informal Communication Is so Important.” HR Software Online, BreatheHR, 15 Jan. 2021, www.breathehr.com/en-gb/blog/topic/company-culture/why-informal-communication-is-so-important.

Sharma, Priyali. “Informal Communication: Meaning, Purpose and Importance.” Your Article Library, 19 Dec. 2015, www.yourarticlelibrary.com/business-communication/informal-communication/informal-communication-meaning-purpose-and-importance/70204.

The Business Communication, et al. “Advantage and Disadvantage of Grapevine or Informal Communication.” The Business Communication, 26 Feb. 2021, thebusinesscommunication.com/advantage-and-disadvantage-of-grapevine-or-informal-communication/.

The JobHopin team