We know that organisations communicate internally via formal channels. These channels often reflect the management structure. This formal communication can be slow as it is often based on the transmission of written documentation, and at every stage signatures have to be acquired approval for approval. This contrasts with the flow of information through informal communication channels, which is based upon personal contacts and does not depend on the formal organisation structure. The transmission of information through informal means is often quick — by word of mouth — but for the same reason it can also be unreliable, and the details may become distorted.

It is important to recognise that informal information systems exist over and above the formal systems. When individual members of staff change (move to a new department, or leaving the organisation, etc.) the formal information flow still operates. However, a change in staff may have serious repercussions for the informal information system, as it depends so heavily on the personalities of the individuals concerned, and the chance meetings that they may have.

Some organisations nurture the informal information system, knowing that it can lead to creativity in the workforce, whereas others may try to stifle this form of communication. In the 1980s, two large companies, Burroughs, and Sperry Univac, merged to form Unisys. In the newly created company, staff were moved to new posts and the informal information system was disrupted. The rationale behind this policy was presumably to remove identification with one or other of the original companies in order to develop a new single company culture; but the result was that many staff left the organisation. This contrasts with the policy in Hewlett Packard, where staff are encouraged to exchange ideas in an informal setting, such as over the coffee machine.

Some organisations recognise the value in providing an environment which can serve as a meeting point for individuals who might not otherwise meet. These chance interactions can be facilitated by features such as coffee machines, drinking fountains, or a communal printer. This approach can serve well in a context where staff have offices in the same building, but how can this effect be achieved in the virtual organisation, where there may be little or no opportunity for face-to-face encounters?