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    Question

    In a major financial crisis of NBFC’s, the rumor

    proved much more accurate than the announcements from the top management. CEOs at major companies like IL&FS defended their companies and practices right through the crisis. Some economist and financial pundits got the story right. But the real gossip came from people in the trenches who knew the practices were poor and credit risk was much greater than stated. In this situation the accurate information came from? A.    Formal communication B.    Informal communication C.   Grapevine communication Read the following passage and answer the next 4 question (Q12-Q15) Information or communication flow within an organization refers to the movement of instructions and communications within an organization. There can be several directions in which it takes place within an organization. The direction of information within an organization depends on the size, structure and the nature of the business. Information flow within an organization is extremely important in determining the success or failure of the business in the long run. For example, it is essential for any type of business organization to be able to share information with all the employees effectively by the management. When the management takes an important decision then it should be communicated to all the staffs that are within the organizational hierarchy. Apart from the formal channel of communication, there also exists Informal communication or casual communication between coworkers in the workplace. It is unofficial in nature and is based in the informal, social relationships that are formed in a workplace outside of the normal hierarchy of business structure. This type of communication is important in the workplace as it can help with employee morale and can encourage the feeling of belonging for the employees as well as a client or customer.
    A Only A Correct Answer Incorrect Answer
    B Only B Correct Answer Incorrect Answer
    C Only C Correct Answer Incorrect Answer
    D A and C Correct Answer Incorrect Answer
    E B and C Correct Answer Incorrect Answer

    Solution

    The accurate information here is coming from rumors and the informal interaction of the employees which follows no chain of command for the flow of information. The Informal Communication is the casual and unofficial form of communication wherein the information is exchanged spontaneously between two or more persons without conforming the prescribed official rules, processes, system, formalities and chain of command. It is based on the personal or informal relations such as friends, peers, family, club members, etc. and thus is free from the organizational conventional rules and other formalities. In the business context, the informal communication is called as a “grapevine” as it is difficult to define the beginning and end of the communication. The informal communication is characterized by an indefinite channel of communication, which means there is no definite chain of command through which the information flows. Hence, the information can flow from anywhere. Often such communication arises out of the social relations that an individual creates with other persons on the basis of common interest, likings or disliking.

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