M1 illustrate the information flow between different functional areas

Internal Information Flows

Information inside a business flows between departments, information can flow Upwards, Downwards or Across (Laterally).

If information flows upwards then the workers at the bottom level of the company will be providing data to higher levels such as the research department, this department will then turn sales data into information about how products are performing. It could also be lower departments providing reports and work to higher departments.

Downwards information flow will be higher departments giving information to lower departments. For example the Administration department giving employees working procedures manuals.

If information flows laterally across a business this is departments sharing information or employees inside a department sharing information with each other, such as ideas and reports, for example if an employee is unsure on what to do with a specific idea then they can contact other employees in the same department who deal with the same information as they do for guidance and assistance. This lateral information flow allows for information to be passed between employees in the same department, or between departments on the same hierarchical level.

Internal Flows to External Bodies

Businesses will give information to other businesses. The business will need to communicate with suppliers; the Purchasing department will give the businesses supplier information about stock they want to order. 

Information Flow Diagram

If a business deals with trading goods and services then they will have several information flows, an example below is the information flow inside the business and with an external body, it will show which departments communicate with each other and how this information flow links to the customer and external bodies.

For example in the diagram (above) you can see that all departments have an information line to the Administration department, this is the highest department. Information from the lower departments flow up to the Administration and information flows down from Administration. You can also see that there are information flows between departments, this is the Lateral information flow, departments will share and transfer information with each other. You can also see which departments have an information flow with the External Body (Supplier).

On the right diagram you can see that the Administration and Sales departments have an information flow, this flow would transfer information such as sales reports.

Strategic

This involves the long term plan for an organization, with a focus on the long term. It sets the goals for the organisation such as X number of new branches. It is effectively the end goal for the foreseeable future of an organisation.

Tactical

This involves the short term plan for an organization; it is aimed at a short time in the future, a year or two ahead of the present. It is used to set out how an organisation will achieve its Strategic goals.

For example deciding in which areas to open the new branches first, this decision should be based on research such as areas where a new branch would do well and not in an area that already has several similar organisations within the same industry. The aim of a Tactical plan is to help towards a Strategic plan.

Operational

This involves the immediate plan for an organization or branch of an organization; the timeframe for this would be from a week to several months, it could be something like increasing the sales of a all branches to raise profits or hiring X number of new employees to deal with increased demand in an individual branch. The aim of an Operational plan is to work towards the Tactical plan.