Significance of Grapevine

Koontz and O’Donnell explain the following:

‘The grapevine thrives on information not openly available to the entire group, whether because that information is regarded as confidential, or because formal lines of communication are inadequate to spread it, or because is of the kind, like much gossip, that would never be formally disclosed.

Even a management that conscientiously informs employees through company bulletins or newspapers never so completely or quickly discloses all information of interest as to make the grapevine purposeless’.


Since all informal organisations serves essential human communication the grapevine is inevitable and valuable. Indeed, an intelligent top manager would probably be wise to feel it accurate information, since it is very effective for quick communication. There is much to be said for a manager getting a place – personally’ or through a trusted staff member or secretary on the company grapevine.

Informal organisation brings a kind of cohesiveness to formal organisation. It imparts to members of a formal organisation a feeling of belonging, of status, of self-respect, and of satisfaction.

The great management writer Chester Barnard observed that “informal organisations are an important means of maintaining the personality of the individual against certain effects of formal organisation which tend to disintegrate personality.

‘Many managers, understanding this fact, consciously use informal organisations as channels of communications and molders of employee morale”.