Formal hierarchies and not-so-formal networks

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Formal hierarchies and not-so-formal networks

I have been asked recently if the informal information movement network within the organisation is an obstacle or does it supports the organisational communication, performance, and wellbeing. Well, …

Organisations consist of several hierarchical structures and relationships, the harmony of which is the basis of the organisation’s functioning and success. One important aspect is the formal structure that describes the roles and responsibilities of the people in different positions. In each organisation, depending on the internal role divisions, an informal information network within the organisation has also developed, which consists of ordinary and unofficial relationships, connections and networks that arise between people at the workplace. Although informal models of information flow may seem useful and supportive at first, it can in reality inhibit the work and development of an organisation in several ways.

An informal network creates a parallel channel of communication that eliminates the formal flow of information and in reality, destroys the structure of the company. This can lead to distortion or misrepresentation of information and hinder effective communication and cooperation between official company structures. For example, it may happen that important information does not reach all employees, or wrong information spreads, which can damage the organisation’s image, work processes and motivation. Employees may not distinguish official information from social group interpretations.

An informal network encourages the formation of a clique, where some employees are better connected and have more influence than others. This can create inequality in the organisation and hinders the division of labour set by the management. The existence of cliques can reduce open communication and cooperation, and contradictions and confrontations arise within the organisation. The management may remain on the periphery of receiving information, there is no right information to make relevant and timely decisions. Instead of management, the company will be led by clans, i.e. opinion leaders of self-initiated interest groups, which paralyse the effective operation of the entire organisation. And although we can hope that these are archaic exceptions lost in history, unfortunately, modern society shows the opposite.

Also, an informal network can create unclear or hidden structures behind power and decision-making processes. This can lead to decisions that may not be the best for the integrity of the organisation because they are influenced by personal preferences or interests. In addition, it can increase bureaucracy and hinder the implementation of innovative ideas and initiatives. Even simple and easy-to-perform tasks can be presented as great challenges through the fragmentation or distortion of the information flow. In the organisation as a whole, faith in the team’s abilities disappears, micromanagement begins, and big goals and values fade.

Although an informal intra-organisational network can be beneficial in some cases to a limited extent, such as helping to quickly disseminate important information or fostering social support and teamwork, its negative effects must be clearly recognised. In order to ensure the effective and sustainable functioning of the organisation, managers and employees must understand the role and influence of informal networks and make efforts to control and manage them. This means creating clear communication channels, promoting open communication and establishing clear procedures for decision-making and accountability. Organisational culture means, first of all, recognition of agreed values.


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