Grapevine is an informal channel of business communication. It is so named because it extends throughout the organization in all directions irrespective of authority levels. We all know that man is a social animal.When he interacts with other people in an organization, informal channels often develop despite the existence of formal channels. In lower levels of an organization, informal channels are more common. The grapevine usually develops for a variety of reasons. The employees of an organization may feel uncertain when it is facing a recession.