Business Communication

Communication is neither the transmission of a message nor the message itself. It is the
mutual exchange of understanding, originating with the receiver and intention to have a
favourable proactive feedback.

Communication needs to be effective in business. Communication is the essence of

management. The basic functions of management (Planning, Organizing, Staffing,
Directing and Controlling) cannot be performed well without effective communication.

Business communication involves constant flow of information. Feedback is integral part

of business communication. Organizations these days are large and involve large
number of people. There are various levels of hierarchy in an organization. Greater the
number of levels, the more difficult is the job of managing the organization.
Communication here plays a very important role in process of directing and controlling
the people in the oragnization. Immediate feedback can be obtained and
misunderstandings if any can be avoided. There should be effective communication
between superiors and subordinated in an organization, between organization and
society at large (for example between management and trade unions). It is essential for
success and growth of an organization. Communication gaps should not occur in any
organization.

Business Communication is goal oriented. The rules, regulations and policies of a

company have to be communicated to people within and outside the organization.
Business Communication is regulated by certain rules and norms. Effective business
communication helps in building goodwill of an organization.

Business Communication can be of two types:

Oral or Verbal Communication: An oral communication can be formal or informal.

Generally business communication is a formal means of communication, like: meetings,
interviews, group discussion, speeches etc.

Written Communication: Written means of business communication includes -

agenda, reports, manuals etc.

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Verbal or Oral Communication - Meaning, Advantages & Limitations
Verbal communication implies communication through mouth. It includes individuals
conversing with each other, be it direct conversation or telephonic conversation.
Speeches, presentations, discussions are all forms of oral communication.

It is generally recommended when the communication matter is of temporary kind or

where a direct interaction is required. Face to face communication (meetings, lectures,
conferences, interviews, etc.) is significant so as to build a rapport and trust.

Advantages of Oral Communication

 There is high level of understanding and transparency in oral communication as it

is interpersonal.
 There is no element of rigidity in oral communication. There is flexibility for
allowing changes in the decisions previously taken.
 The feedback is spontaneous in case of oral communication. Thus, decisions can
be made quickly without any delay.
 It is not only time saving, but it also saves upon money and efforts.
 Oral communication is best in case of problem resolution. The conflicts, disputes
and many issues/differences can be put to an end by talking them over.
 It is an essential for teamwork and group energy.
 It promotes a receptive and encouraging morale among organizational employees.
 It can be best used to transfer private and confidential information/matter.

Disadvantages/Limitations of Oral Communication

 Relying only on oral communication may not be sufficient as business

communication is formal and very organized.
 Oral communication is less authentic than written communication as they are
informal and not as organized as written communication.

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  Oral communication is time-saving as far as daily interactions are concerned, but
in case of meetings, long speeches consume lot of time and are unproductive at
times.
 Oral communications are not easy to maintain and thus they are unsteady.
 There may be misunderstandings as the information is not complete and may lack
essentials.
 It requires attentiveness and great receptivity on part of the receivers/audience.
 Oral communication (such as speeches) is not frequently used as legal records
except in investigation work.

Written Communication-Meaning, Advantages & Disadvantages

Written communication has great significance in today’s business world. It is an
innovative activity of the mind. Effective written communication is essential for preparing
worthy promotional materials for business development. Speech came before writing.
But writing is more unique and formal than speech.

Effective writing involves careful choice of words, their organization in correct order in

sentences formation as well as cohesive composition of sentences. Also, writing is more
valid and reliable than speech. But while speech is spontaneous, writing causes delay
and takes time as feedback is not immediate.

Advantages of Written Communication

 Written communication helps in laying down apparent principles, policies and
rules for running of an organization.
 It is a permanent means of communication. Thus, it is useful where record
maintenance is required.
 It assists in proper delegation of responsibilities. While in case of oral
communication, it is impossible to fix and delegate responsibilities on the grounds
of speech as it can be taken back by the speaker or he may refuse to
acknowledge.

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  Written communication is more precise and explicit.
 Effective written communication develops & enhances an organization’s
image.
 It provides ready records and references.
 Legal defenses can depend upon written communication as it provides valid
records.

Disadvantages of Written Communication

 Written communication does not save upon the costs. It costs huge in terms of
stationery and the manpower employed in writing/typing and delivering letters.
 Also, if the receivers of the written message are separated by distance and if
they need to clear their doubts, the response is not spontaneous.
 Written communication is time-consuming as the feedback is not immediate.
The encoding and sending of message takes time.
 Effective written communication requires great skills and competencies in
language and vocabulary use. Poor writing skills and quality have a negative
impact on organization’s reputation.
 Too much paper work and e-mails burden is involved.

Components of Communication Process

Communication is a process of exchanging verbal and non-verbal messages. It is a continuous
process. Pre-requisite of communication is a message. This message must be conveyed through some
medium to the recipient. It is essential that this message must be understood by the recipient in same
terms as intended by the sender. He must respond within a time frame. Thus, communication is a two
way process and is incomplete without a feedback from the recipient to the sender on how well the
message is understood by him.

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The main components of communication process are as follows:

1. Context - Communication is affected by the context in which it takes place. This

context may be physical, social, chronological or cultural. Every communication
proceeds with context. The sender chooses the message within a context.
2. Sender/Encoder - Sender/Encoder is a person who sends the message. A sender
makes use of symbols (words or graphic or visual aids) to convey the message and
produce the required response.
3. Message - Message is a key idea that the sender wants to communicate. It is a
sign that elicits the response of recipient.
4. Medium - Medium is a means used to exchange/transmit the message. The sender
must choose an appropriate medium for transmitting the message else the
message might not be conveyed to the desired recipients. The choice of
appropriate medium of communication is essential for making the message
effective and correctly interpreted by the recipient.
5. Recipient/Decoder - Recipient/Decoder is a person for whom the message is
intended/ aimed/ targeted. The degree to which the decoder understands the
message is dependent upon various factors such as knowledge of recipient, their
responsiveness to the message, and the reliance of encoder on decoder.
6. Feedback - Feedback is the main component of communication process as it
permits the sender to analyze the efficacy of the message. It helps the sender in

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 confirming the correct interpretation of message by the decoder. Feedback may be
verbal (through words) or non-verbal (in form of smiles, sighs, etc.). It may take
written form also in form of memos, reports, etc.

Importance of Communication in an Organization

Effective Communication is significant for managers in the organizations so as to
perform the basic functions of management, i.e., Planning, Organizing, Leading and
Controlling.

Communication helps managers to perform their jobs and responsibilities.

Communication serves as a foundation for planning. All the essential information must
be communicated to the managers who in-turn must communicate the plans so as to
implement them.

Organizing also requires effective communication with others about their job task.
Similarly leaders as managers must communicate effectively with their subordinates so
as to achieve the team goals. Controlling is not possible without written and oral
communication.

Managers devote a great part of their time in communication. They generally devote
approximately 6 hours per day in communicating. They spend great time on face to face
or telephonic communication with their superiors, subordinates, colleagues, customers
or suppliers. Managers also use Written Communication in form of letters, reports or
memos wherever oral communication is not feasible. Thus, we can say that “effective
communication is a building block of successful organizations”. In other words,
communication acts as organizational blood.

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These importance can be summarized as follows:

 Communication promotes motivation by informing and clarifying the employees

about the task to be done, the manner they are performing the task, and how to
improve their performance if it is not up to the mark.
 Communication is a source of information to the organizational members for
decision-making process as it helps identifying and assessing alternative course
of actions.
 Communication plays a crucial role in altering individual’s attitudes, i.e., a
well-informed individual will have better attitude than a less-informed individual.
Organizational magazines, journals, meetings and various other forms of oral
and written communication help in moulding employee’s attitudes.
 Communication helps in socializing. In todays life the only presence of another
individual fosters communication. It is also said that one cannot survive without
communication.
 As discussed earlier, communication also assists in controlling process. It helps
controlling organizational member’s behaviour in various ways. There are various
levels of hierarchy and certain principles and guidelines that employees must
follow. They must comply with organizational policies, perform their job role
efficiently and communicate any work problem and grievance to their superiors.
Thus, communication helps in controlling function of management.

An effective and efficient communication system requires managerial proficiency in

delivering and receiving messages. A manager must discover various barriers to
communication, analyze the reasons for their occurrence and take preventive steps to
avoid those barriers. Thus, the primary responsibility of a manager is to develop and
maintain an effective communication system in the organization.

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 Communication Flows in an Organization
In an organization, communication flows in 5 main directions-

Downward Upward Lateral Diagonal External

Providing feedback on employees performance

Giving job instructions

Providing a complete understanding of the employees job as well as to communicate them

how their job is related to other jobs in the organization.

Communicating the organizations mission and vision to the employees.

Highlighting the areas of attention.

Organizational publications, circulars, letter to employees, group meetings etc are all examples
of downward communication. In order to have effective and error-free downward
communication, managers must:

o Specify communication objective

o Ensure that the message is accurate, specific and unambiguous.
o Utilize the best communication technique to convey the message to the receiver in right

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form

Downward Flow of Communication: 

Communication that flows from a higher level in an organization to a lower level is a
downward communication. In other words, communication from superiors to
subordinates in a chain of command is a downward communication. This
communication flow is used by the managers to transmit work-related information to the
employees at lower levels. Downward communication is used by the managers for the
following purposes -

Upward Flow of Communication: 

Communication that flows to a higher level in an organization is called upward
communication. It provides feedback on how well the organization is functioning. The
subordinates use upward communication to convey their problems and performances to
their superiors.

The subordinates also use upward communication to tell how well they have understood
the downward communication. It can also be used by the employees to share their
views and ideas and to participate in the decision-making process.

Upward communication leads to a more committed and loyal workforce in an

organization because the employees are given a chance to raise and speak
dissatisfaction issues to the higher levels. The managers get to know about the
employees feelings towards their jobs, peers, supervisor and organization in general.
Managers can thus accordingly take actions for improving things.

Grievance Redressal System, Complaint and Suggestion Box, Job Satisfaction surveys
etc all help in improving upward communication. Other examples of Upward
Communication are -performance reports made by low level management for reviewing
by higher level management, employee attitude surveys, letters from employees,
employee-manager discussions etc.

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Lateral/Horizontal Communication: 
Communication that takes place at same levels of hierarchy in an organization is called
lateral communication, i.e., communication between peers, between managers at same
levels or between any horizontally equivalent organizational member.

The advantages of horizontal communication are as follows:

It is time saving.

It facilitates co-ordination of the task.

It facilitates co-operation among team members.

It provides emotional and social assistance to the organizational members.

It helps in solving various organizational problems.

It is a means of information sharing

It can also be used for resolving conflicts of a department with other department or conflicts
within a department.

Diagonal Communication: 
Communication that takes place between a manager and employees of other
workgroups is called diagonal communication. It generally does not appear on
organizational chart. For instance - To design a training module a training manager
interacts with an Operations personnel to enquire about the way they perform their task.

External Communication: 
Communication that takes place between a manager and external groups such as -
suppliers, vendors, banks, financial institutes etc. For instance - To raise capital the
Managing director would interact with the Bank Manager.

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