Analysis of Information Flow: Business Communication Strategies

This report provides a comprehensive analysis of information flow within organizations, detailing the various types of communication that occur. It begins by defining the concept of organizational information flow, highlighting its importance and the different directions it can take, including downward, upward, horizontal, diagonal, and external flows. The report explains each type of information flow with examples, such as the downward flow of instructions from management, upward feedback from employees, horizontal communication between peers, diagonal communication across departments, and external communication with stakeholders. The report emphasizes the significance of effective communication strategies for organizational success, focusing on critical success factors that contribute to efficient information flow. The report also covers the benefits and challenges associated with each type of information flow, providing insights into how organizations can optimize their communication processes to achieve growth, profitability, and sustainability.

Blog: Information Flow

Information Flow
1st August 2019
Concept of organizational information flow
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 information flow takes place within an organization such as downward, upward,
horizontal, diagonal and external. The direction of information flow within an organization
depends on the size, structure and the nature of the business. In the case of the majority of the
traditional organizations, the flow of information occurs in a vertical motion that is in a
downward and upward direction. In such situations, the managers give instructions to the
subordinates and hence the flow of information travels from an upward to a downward direction.
Then, the flow of information also takes place when the communication occurs from the
subordinates to the employees in the managerial positions that lead to a flow of information in an
upward direction. In the case of non-traditional or informal business organizations, like
technology start-ups, the flow of information happens mainly in the horizontal and diagonal
directions. It can be said that this form of information flow happens in the case of organizations
with a flat hierarchy and there is the need for some form of collaboration. Apart from these
information flow, there are some unofficial communications in several organizations like those
that occur in the case of company grapevines and this type of information flow might take place
in the case of both formal and informal organizations. The success of an organization depends on
the effective communication flow or information flow that happens between the internal
stakeholders as also between the internal and the external stakeholders of the organization.
Therefore, there should be effective communication strategies in place for a business to succeed
in terms of growth, profitability, and sustainability.
Types of information flow
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. This flow of
information happens in a vertical direction at the time when the management personnel gives
some instructions that flow from an upward to a downward direction. The information must
effectively flow from the management personnel to the senior managers, middle-level managers,
lower-level managers, senior executives and executives that are in the lowest position of the
organizational hierarchy. Then there can be a flow of information in horizontal direction also in
the case of communication between peers in an organization or in the case of organizations that
do not have the traditional hierarchical organizational structure. Organizations with matrix
organizational structure can depict signs of the flow of information in a horizontal direction
because there can be various departments that are at the same level of the organizational
hierarchy. Therefore, it is evident that for the success of a business organization, irrespective of
its size and organizational structure it is highly desirable that the organization is able to
demonstrate the effective flow of information within the business premises and also with the
external stakeholders of the business. This will ensure long-term growth, profitability, and
sustainability of the business. So, it can be said that out of the various business strategies, the
strategies for organizational communication are highly important for ensuring the success of the
business establishment in the long run.
Downward information flow
This form of information flow takes place when the person in top management and leadership
positions share instructions with employees working in the lower levels of the organization.
Unless there is any request, the top-level management personnel do not expect to get a response
from the lower level personnel because they expect that the message that has been shared from
the top management will be observed diligently without any question. For example, when the
CEO of a company is changed and some new CEO is appointed in the business then there is a
downward flow of information within the organization. Furthermore, in the case of a merger with
a competitor, the management undertakes downward communication strategies where there will
be a flow of information from the top to the bottom. Apart from all these situations, other
scenarios where downward communication takes place are communications that are undertaken
through videos, podcasts, blogs, and speeches within the organization. Another relevant example

of downward communication is when the departmental managers or the line managers in an
organization gives the daily directives to their subordinates regarding their daily professional
activities and targets that they ought to achieve. Interestingly, the downward flow of information
can also be in the form of company handbooks or instruction manuals that are also shared within
an organization on various occasions. Hence, it is evident that one of the major advantages of
downward information flow is that it enables the organization in sharing information that updates
the employees about the major organizational changes, and new strategic objectives and goals
and it also helps in offering performance feedback within the organization. There are some other
key areas where downward information flow takes place such as undertaking coordination,
discuss an official policy such as public relations and messages that are directed towards
enhancing the morale of the workers and consumer relations.
Upward information flow
In this type of information flow, the communication of information flows from the downward to
the upward direction such as from the lower-level employees to the higher-level employees. This
form of communication is also known as vertical communication. We can say that in modern
organizations, vertical flow of information is a very common incident to happen. For example,
there is upward communication in an organization at the time when the workers report their
day’s works to their supervisors or during the times when the team leaders report the day’s
proceedings to their departmental managers. Upward information flow happens in an
organization when communication takes place in an organization encompassing sharing of
progress reports, sharing estimates of budget, communicating problems and grievances,
communication improvement suggestions or communicating project proposals. On many
occasions within an organization, a downward communication stimulates an upward response.
For example, when a manager seeks a recommendation from the subordinate or inquires about
the probable time when a project will be completed. Today, many of the organizations encourage
prompt upward information flow through instant feedback from the subordinates without even
asking for such feedback from the juniors. There are many organizations that even offer prizes
and rewards to employees for their prompt feedback to the superiors through creative solutions.
However, the employees need to feel absolutely confident on the management before taking part
in such upward communication in terms of the event that their contributions will be duly

recognized and there will not be any effort to undermine their efforts. In this context, it is worth
discussing that there are ‘whistleblowers’ in many organizations that have been installed for
reporting any unethical behavior by any employee to the top-level management. This also is a
form of upward communication.
Horizontal information flow
The horizontal flow of information happens within an organization when there is an exchange of
information across various departments of the business that exist at the same level. This is also
known as peer-to-peer communication. One of the major objectives of horizontal communication
is to ask for support or achieve coordination in several activities. Employees functioning at same
levels within an organization have the opportunity to work together and try to solve various
problems and achieve the organizational objectives. Here, the working of the employees occur in
an informal approach and also as and when required. For instance, the production manager can
communicate with the purchase manager for the purpose of dealing with shipment issues of
products within a company. Again, the finance manager of a company can coordinate with the
inventory manager for achieving successful strategic planning on behalf of the company.
Another example of horizontal information flow can be the process of interaction between two
employees that report to the same manager. However, there are some challenges in horizontal
information flow within an organization. For instance, if one of the managers at the same level of
the organization is unwilling to cooperate and share information with the other manager then that
will lead to communication gaps and naturally, the productivity of the organization will suffer.
Often, managers can demonstrate communal behavior or territorial behavior while interacting
with another manager who belongs to a different background. This will lead to a manager at the
next higher level intervening into the issue and undertaking downward communication to solve
the problem.
Diagonal information flow
Diagonal communication or information flow within an organization takes places when there is a
cross-functional communication between staffs working at different organizational levels. For
instance, when the VP of Sales Department shares an email with the VP of Manufacturing
Department seeking information regarding the availability of a product for shipping then it is an
example of horizontal information flow. However, when an email is forwarded by a sales

executive to the VP of Marketing then there is an instance of diagonal communication within the
organization. During the times when there is a flow of communication from one department to
another, the manager of the department that is sending the message should be kept in the loop. In
this context, we can say that a manager might find himself or herself in an extremely unsolicited
position if he or she is not aware of all the proceedings that have been happening within the
department. This can lead to a devastating situation where there will be a lack of trust between
the employees and there might be a significant influence on the careers of the employees if the
communication protocols are not successfully observed. It is interesting to learn that today, the
diagonal flow of information has been gaining increasing popularity within the organizations that
have matrix organizational structures or much flattened or product-based organizational
structures. There are several benefits to the diagonal information flow such as it helps in
developing warm and hospitable relationships between the lower-level and the senior-level
employees across diverse departments of the organization. An informal flow of information
within the business is highly encouraging and it reduces the possibility of the message being
tampered with by passing through additional filters. Finally, diagonal communication flow
reduces the workloads of the managers at different senior-level positions within the business.
External information flow
The external flow of information or external communication is the process in which flow of
information occurs between a manager and an external group such as the various financial
institutions such as banks, financial organizations or with the vendors and suppliers of the
business. For example, for the purpose of raising capital for business, the Managing Director of a
company might need to communicate with the Bank Manager which is a form of external
communication or external flow of information. A business establishment has to interact with
several external stakeholders for the purpose of ensuring that the daily functions and processes of
the business are being undertaken effectively and at par with the set goals and objectives of the
business. The better the communication process between the organization and the several
external stakeholders, the better are the chances of the organization to gain competitive
advantage within the industry. Therefore, it is undeniable that the long-term success of a business
depends not only on the effectiveness of internal information flow but also on the external

information flow. A business needs to have proper communication with the external stakeholders
to achieve long-term growth, profitability, and sustainability.
Critical success factors for efficient information flow
For ensuring effective flow of information within an organization it is extremely essential for the
business to achieve the following critical success factors in the communication strategies:
 The communication process model should be observed diligently by all the stakeholders
engaged in the communication process. These stages consist of: The sender developing
an idea, the sender formulating the message, the sender choosing a medium of
communication, the sender transmitting the message effectively across the chosen
medium to the intended recipient, the recipient receiving the message and decoding it
effectively, and finally, the recipient offering feedback to the sender such that the
communication loop is completed.
 The sender of the message should be an active listener also. This is because without being
an active listener the sender will not be able to formulate the message effectively that
satisfies the recipient. It is essential to acknowledge the ideas and thoughts of the
recipient and then develop the message accordingly that remains sensitive to the recipient
and addresses the concerns.
 Any barrier to communication should be effectively overcome in order to ensure that the
communication process has been able to achieve the desired objectives effectively. There
needs to be a cooperative tone in the message and the sender should empathize with the
recipient of the message.
 There needs to be continuous learning in the domain of how to observe effective
communication procedures with various stakeholders. So, it is extremely important to
learn from the previous mistakes and ensure that those will not be repeated in the future
such that the future communication processes are even more effective.
Barriers to effective information flow
There can be several challenges or barriers to effective communication that might impact a
business organization and thereby create a hindrance in the flow of information. Some of these
major barriers are as follows:

 Unnecessary use of jargons- The use of jargons in communication can lead to an
unnecessary complication when unfamiliar terms are used in a communication process.
 Diversities in perception- Often, there can be differences in the perception and
perspectives of various persons involved in a communication process that might lead to
ineffective information flow.
 Taboos and emotional barriers- In the case of some people a particular topic of
discussion can be a taboo or might lead to the development of emotional barriers, such as
topics on religion, sex, racism, etc. that can often hamper information flow.
 Absence of proper attention and interest of the recipient- When the receiver of the
message is not interested in the communication and pays poor attention than that will lead
to ineffective information flow.
 Physical deformities and disabilities- Physical disabilities of the sender or the receiver
of the message might lead to an ineffective flow of information such as in the case of
people with speech problems or hearing difficulties.
 Language diversities and problems in unfamiliar accents- Often, differences in
languages and unfamiliar accents lead to an unsatisfactory flow of information between
the sender and the recipient.
 Cultural diversities- On several occasions, cultural diversities act as major barriers to
the effective flow of information between the sender and the receiver of messages. This is
because the principles of social interaction vary greatly between different cultures. For
instance, the worldviews, ethical concepts and other perceptions often vary between
multiple cultures.