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CMA Foundation · Fundamentals of Business Laws and Business Communication · Types of Business Communication

Rumours about a possible plant relocation spread among employees of a Chennai company during lunch breaks, with no official announcement. Which statement about this channel is correct?

The rumour spreads through the informal grapevine, which arises from social contact among employees and operates outside the official chain of command. A channel is formal only if the organisation prescribes it, so business-related content alone does not make it formal.

  1. AIt is the informal grapevine, which operates outside the official chain of commandCorrect
  2. BIt is a formal downward channel because it reaches many employees
  3. CIt is a formal channel because it concerns company business
  4. DIt is horizontal formal communication prescribed by the organisation chart

Explanation

The grapevine is an informal network arising from social interaction, not from the organisation chart. Its subject matter being business-related does not make it formal. Formality depends on whether the channel is officially prescribed.

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