Informal Communication Networks

Issue: Managers can increase organizational effectiveness in both the private and public sectors through the study of informal networks (i.e. trust, advice, and communication networks).

I. Introduction
II. Discussion on the industry contexts for Healthcare Delivery Systems, Pima Utilities, and State Compensation Fund.
A. Description of companies industrial objectives.
B. Discussion of company histories\' and strategies.
III. The relevant problems concerning informal communication net works are:
A. Managers should not rely on their own perception of communication networks within their departments.
1. Managers should study the informal communication networks.
2. They should be more aware and encourage two- way communications in informal networks to increase employee productivity.
B. Mangers must be aware of informal networks in order to develop effective teams.
1. Teams bring diversification of ideas and experience.
2. Teams who utilize the same informal networks do not effectively promote new ideas and strategies.
C. Managers should re-examine the current trend of decentralization, due to the loss of informal networks.
1. Work-at-home programs impair informal networks.
2. Digital (i.e. e-mail, voice mail) substitutes for informal networks are not effective.
IV. Discussion of current communication strategies within:
A. Healthcare Delivery Systems.
B. Pima Utilities.
C. State Compensation Fund.
V. Threats and opportunities of external environmental factors on informal net works within:
A. Healthcare Delivery Systems.
B. Pima Utilities.
C. State Compensation Fund.
VI. Strengths and weaknesses of informal networks within:
A. Healthcare Delivery Systems.
B. Pima Utilities.
C. State Compensation Fund.
VII. Evaluation of informal network strategies based on survey results.
A. Survey questionnaire.
B. Survey parameters
C. Survey results.
VIII. Recommendations and conclusions.

The informal communication networks that are present in organizations are resources often overlooked by management. Informal communication networks enable tasks to become completed with greater ease and efficiency. By understanding these informal communication networks, managers can more effectively develop teams to complete organizational tasks. The three parts of the informal communication network are the advice network, trust network, and the communication network. The advice network are channels used by employees seeking guidance primarily utilizing lateral communications with their peers. Trust networks are lateral communications between employees regarding topics for which the members of the group protect their own interests. Communication networks are those interactions between employees of all levels that dictate the direction the group should follow.
Industry Contexts
In 1927, the Arizona Industrial Commission was formed to oversee the implantation and administration of the "Single Remedy Doctrine". The "Single Remedy Doctrine" were laws passed by the legislature to help injured workers\' recover from their work related injuries both monetarily and physically. The laws did not contemplate which party (employer or employee) was at fault. In other words, the payment of medical and compensatory claims was not based upon the negligence of the employer or the employee.
In 1969, the State Compensation Fund was founded. The formation of the State Compensation Fund relieved the Industrial Commission of Arizona from the day to day operations of workers\' compensation insurance. The State compensation Fund was primarily responsible for writing workers\' compensation insurance policies and processing claims. The Industrial Commission of Arizona no longer took an active roll in daily administration and processing of claims. The State Compensation Fund remained a governmental entity. All regulatory powers, however, are vested with the Industrial Commission of Arizona and the Arizona Department of Insurance. The State Compensation Fund has a limited relationship with state government. The governor appoints the Board of Directors for the State Compensation Fund. The only other connection that the State Compensation Fund has with state government is that the Joint Legislative Budget Committee oversees the annual budget of the State Compensation Fund. The Joint Legislative Budget Committee maintains this oversight even though the State Compensation Fund requires no money from the state government. All budgetary expenses are paid through the collection of insurance premiums. Figure 1 demonstrates the separation and function of Arizona\'s workers\' compensation agencies.
The State Compensation Fund\'s marketing strategies are simple. The State Compensation Fund provides employers a stable and reliable market for workers\' compensation insurance at the lowest possible cost. The State Compensation Fund also provides injured workers with immediate medical coverage and equitable compensation for work related injuries. Due to these simple strategies, the State Compensation Fund writes workers\' compensation insurance for sixty percent of the businesses in Arizona. This equates to forty-nine percent of the premium dollars spent in Arizona for workers\' compensation insurance. In recent years, the workers\' compensation insurance market has become more competitive. Five years ago, four companies were authorized by the Arizona Department of Insurance to conduct business in Arizona in the workers\' compensation insurance industry. The number of insurance companies applying to