The two kinds of communication networks are classified as

Learning Outcomes

Differentiate between formal and informal communication networks

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Learning Outcomes
Informal versus Formal Networks
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By now you know that business communication can take different forms and flow between different kinds of senders and receivers. Another way to classify communication is by network.

An organization’s formal communication network is comprised of all the communication that runs along its official lines of authority. In other words, the formal network matches the organizational structure of an organization. As you might expect, when a manager sends an email to her sales team describing the new commission structure for the next set of sales targets, that email (an example of downward communication) is being sent along the company’s formal network that connects managers to their subordinates.

An informal communication network, on the other hand, doesn’t follow authority lines and is established around the social affiliation of members of an organization. Such networks are also described as “grapevine communication.” They may come into being through the rumor mill, social networking, graffiti, spoof newsletters, and spontaneous water-cooler conversations.

Informal versus Formal Networks

Formal communication follows practices shaped by hierarchy, technology systems, and official policy.
Formal communication usually involves documentation, while informal communication may not leave a recorded trace for others to find or share.
Formal communications in traditional organizations are frequently “one-way”: They are initiated by management and received by employees.
Formal Communication content is perceived as authoritative because it originates from the highest levels of the company.
Informal communication occurs in any direction and takes place between individuals of different status and roles.
Informal communication frequently crosses boundaries within an organization and is commonly separate from work flows. That is, it often occurs between people who do not work together directly but share an affiliation or a common interest in the organization’s activities and/or a motivation to perform their jobs well.
Informal communication occurs outside an organization’s established channels for conveying messages and transmitting information.

In the past, many organizations considered informal communication (generally associated with interpersonal, horizontal communication) a hindrance to effective organizational performance and tried to stamp it out. This is no longer the case. The maintenance of personal networks and social relationships through information communication is understood to be a key factor in how people get work done. It might surprise you to know that 75 percent of all organizations’ practices, policies, and procedures are shared through grapevine communication.

While informal communication is important to an organization, it also may have disadvantages. When it takes the form of a “rumor mill” spreading misinformation, informal communication is harmful and difficult to shut down because its sources cannot be identified by management. Casual conversations are often spontaneous, and participants may make incorrect statements or promulgate inaccurate information. Less accountability is expected from informal communications, which can cause people to be indiscreet, careless in their choice of words, or disclose sensitive information.

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Networks are divided into two types, a LAN (Local Area Network) or a WAN (Wide Area Network), which are generic terms referring to two important basic types of networks.

The Internet can be thought of as a bunch of LANs interconnected by WANs. An average packet will run across a company’s local Ethernet (LAN), up an ISDN or leased line or PPP link (WAN) to an Internet Service Provider. The ISP has Ethernet too (LAN) that transports the packet to the right router for delivery to a cross-country provider (WAN). The packet begins bouncing from one LAN site to another over WAN links.

Local Area Networks (LAN) is widely used to share resources and exchange information by connecting personal computers and workstations in company office and factories. A LAN is a network that is limited to an area such as a building or school. In a LAN, computers and hardware such as printers can be connected by cable (copper wiring), fibre optic cabling (glass fibres) or using a wireless (radio waves) connection.

Advantages of LANs:

Hardware such as printers can be shared so individual workstations do not need their own printer. When they print, the data is stored in a queue on a server. The data is then passed to the printer.
All the users work can be stored in a central place (the dedicated file server) so a user can access their work through any computer on the network.
Software can be shared, software packages are stored on the server and downloaded to workstations as requested. Note that a licence still has to be bought for each copy of the software needed.
Data can be shared because database files stored in the server are available to users around the network; data from CD-ROMs can also be shared across the network.
Central back-up can take place automatically at regular intervals. A user will usually be able to retrieve work that has been deleted by mistake.
Messages can be sent to people working at other computers on the network which can save time and paper.
It is possible to set up a local intranet such as that on the KLB school network. The web pages of information can be accessed only over the LAN. An intranet is free because it does not involve phone links.
There is control over users’ access rights to programs and data.

Disadvantages of LANs:

Printing can be slow. Where a lot of workstations are served by only one or two printers, long print queues may develop.
A virus can spread more easily. If a virus gets into one computer, it is likely to spread quickly across the network because it will get into the central backing store.
As data is shared there is a greater need for security. Users of the network have to have authentication techniques such as user ids and passwords. Unique user ID’s control access to the files and settings on the network while passwords prevent unauthorised users from logging onto the network. Data may also have to be encrypted so that it is meaningless if intercepted.
If the server fails, all the workstations are affected. Work stored on shared hard disk drives will not be accessible and it will not be possible to use network printers either.
The cost of installing the equipment is greater. Cabling can be expensive to buy and to install.
Damage to cables can isolate computers. Some sections of the network can become isolated and will not be able to communicate with the rest of the network.
Because networks can be complicated to maintain, a network manager may be need to be employed to run the system.

A Wide Area Network (WAN) is not confined to one building. The computers and terminals forming part of the network can be spread around the world. External communication links such as satellites, microwaves, and telecommunication links and optical fibre will be used to connect the parts of a WAN. The connection must normally be paid for because the links are external.

The Internet is a worldwide WAN and a LAN can be connected to it using a router.

Advantages of WANs:

These are similar to those of LAN’s except the scale of sharing etc. becomes far greater and can be world-wide.

Disadvantages of WANs:

Again these are similar to those of LAN’s except that issues such as security become even more important as potential hackers could break into a computer system from anywhere in the world rather than having to physically be in a building.
Encryption of secure data such as financial transactions is necessary because it is even easier to intercept data.

LAN/WAN Comparison

	Local Area Networks (LANs)	Wide Area Networks (WANs)
Most commonly:	Ethernet, Token Ring, FDDI	Leased lines, serial links, ISDN, X.25
Advantage:	speed	distance
Cost center:	dense installation (about one interface per room)	length of long-haul lines (about one interface per 100 miles)
Current Speed:	10-100 Mbps (mostly 10 Mbps)	0.01 to 45 Mbps (mostly clustered around 1 Mbps)
Common uses:	File sharing	Email and file transfer (including Web)
Common problems:	Cable disruption by users	Cable disruption by backhoes
Conceptually:	A bunch of lines hooking users together	A bunch of lines hooking cities together

A good networking design must answer both the LAN and WAN needs of its users. WAN links tend to operate with tight bandwidth margins, but many LAN applications depend on lots of surplus bandwidth. This is especially true of Ethernet, which begins to show performance degradation once you exceed about 20% “theoretical capacity”, don’t expect standard Ethernet to carry more than about 2 Mbps. A network’s biggest startup cost is the labor needed to install it. So don’t just install two-pair cable; install eight-pair and leave six unused. Don’t just install one Ethernet cable; install two or three, and maybe run some fiber alongside it. Be ready to expand your LAN capacity as this becomes needed.

On the other hand, consider your WAN needs. Do you want global email and Web access? If so, you’ll need some form of WAN connection, but what kind? Probably the best advice here is the same – plan for expansion, but in a different way. Plan so that you can upgrade your WAN service without changing your LAN configuration. Dialup SLIP or PPP is fine for one or two computers. Once you have half dozen computers in regular use, I suggest shifting to a router configuration, even if the router is still using PPP. It is much easier to track six LAN links and one WAN link than track six LAN links and six WAN links. As much as possible, I suggest static IP address assignment, and intelligent inverse name server entries.

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