Meaning and Definition

Communication as we have read in this Tutorial is sine qua non in a business organization. However, unintelligible and entangled communication fails to achieve the desired result and affect work environment in an organization.

In a layman’s lexicon, communication is understood to be day-to-day talks and discussions we all engage with. Though the broader meaning of communication covers all human interactions, in management parlance, communication is not mere talking, chattering or blabbering in a nonsensical manner. Communication is not as simple as it appears. It is systematic process with an objective that a piece of communication aims to achieve. It can be defined as a process of translating any thought process into simple and meaningful utterances through an appropriate channel.

Communication needs to be effective and efficient for better and smooth functioning of an organization.

Effective communication is defined as communication between two or more persons in which the intended message is −

  • properly encoded

  • delivered through appropriate channel

  • received

  • properly decoded and understood by the recipient(s)

In other words, communication is said to be effective when all the parties (sender and receiver) in the communication, assign similar meanings to the message and listen carefully to what all have been said and make the sender feel heard and understood.

In a business organization, communication is said to be effective when the information or data shared among the employees effectively contribute towards organization’s commercial success.

In the words of R.W. Griffin, "Effective communication is the process of sending a message in such a way that the message received is as close in meaning as possible to the message intended".

American Management Association (AMA) has defined effective communication based on the following ten points −

  • Clear idea regarding topics and receiver of communication.

  • Determination of purpose.

  • Understanding the environment of communication.

  • Planning for communication with consulting others.

  • Consider the content of the message.

  • To make the receiver aware about the value of communication.

  • There must be feedback from the receiver.

  • To define properly whether communication messages are of short-run or long-run importance.

  • All actions must be suitable with communication.

  • Good listening.

Effective Communication is defined as the ability to convey information to another effectively and efficiently. Business managers with good verbal, nonverbal and written communication skills help facilitate the sharing of information between people within a company for its commercial benefit.

Significance of Effective Communication

In this section, we will understand the significance of effective communication −

Construct and Foster Sustainable and Productive Relationship

Effective communication should be the focus in businesses as it becomes largely difficult to properly construct and foster productive relationship without it.

Give space to Innovations

Effective communication facilitates innovations in a business organization by allowing employees and management to come up with innovative ideas that might further help in the overall development of the organization.

Help Build an Effective Team

A work environment enriched with effective or open communication helps in building a cohesive and effective team. Effective communication always boosts the morale of employees. It brings in the zeal in employees to work towards achieving the common objectives of the organization. Regular internal communication can also lead to an improved work ethic if the staff are reminded of achievements and feel that they are working towards a common goal.

Effective Management

When there is hassle-free and open communication between the management and the employees, it leads to a steady rise in the pace of progress of the organization. Effective communication, therefore, yields effective management. Managers come to know the attitude and grievances of the employees and the latter gets to know the managers’ attitudes towards them and also the policies of the organization.

Contributes to the Overall Growth of the Organization

Effective communication builds desired interpersonal, interdepartmental and management-employee relationship which in turn are essential preconditions for realizing the vision of the organization. In other words, effective communication contributes to the overall growth of the business.

At the professional level, it is essential to know how to deal adequately with peers, make good decisions even in stressful situations. This is one of the reasons why effective communication skills are increasingly valued.

Effective communication in the organization enables the employees to deepen their connection with others and improve teamwork, decision-making, and problem-solving capacity.

Characteristics of Effective Communication

The characteristics or principles of effective communication are pivotal for ensuring a productive communication. The major characteristics are as follows −

Completeness of the Message

Communication must be complete so as not to baffle the recipient. Better communication helps in better decision-making by the latter. It develops and enhances the reputation of an organization.

Clearness and Integrity of the Message

The message to be conveyed or sent must have clarity and integrity for better understanding. Clarity of thoughts and ideas enhances the meaning of the message. The pith and substance of the message should be based on honesty and accuracy.

Conciseness of the Message

The intended message must be free from verbosity and should be so written that it is intelligible at the first sight. Short and intelligible message sent to the receiver is ever appealing and comprehensible. It saves time and cost as it is understood at the first instance.

Consideration of Physical Setting and the Recipient

In order to make communication more effective, the overall physical setting, i.e., the media of communication and the work environment, must be considered. The content of the message must take into account the attitude, knowledge, and position of the recipient.

Clarity of the Message

The message should have clarity of thoughts and ideas in order to be understood clearly. Clear message makes use of exact, appropriate and concrete words and symbols.

Courtesy to be Maintained

The sender's message should be so drafted or prepared that it should be polite, reflective, and enthusiastic. It must show the sender's respect for the receiver and be positive and focused at the receiver.

Correctness of the Message

The drafting of the message should be done in such a manner that the final message doesn't have any grammatical errors and repetitions of sentences. The message should be exact, correct and well-timed.

Effective Business Communication

Successful business largely flourishes on effective business communication. Effective communication skills are vital for building active and effective interactions among the colleagues, clients, bosses, and media.

It is of foremost importance for all personnel in all phases of business life in any organization.

Although everyone employed in an organization boasts of having acquired the skills of effective business communication, there is a need ever felt for improving these skills.

Methods of Effective Business Communication

We will now see the different methods of effective business communication in brief −

  • Web-based communication − For better and improved communication, anytime and anywhere.

  • Video conferencing − This allows people in different locations to hold interactive meetings.

  • Reports − This is important in documenting the activities of any department.

  • Presentations − This is a popular method of communication in all types of organizations, usually involving audiovisual material, like copies of reports, or material prepared in Microsoft PowerPoint or Adobe Flash.

  • Telephone meetings − This allows speech over long distance.

  • Forum boards − This allows people to instantly post information at a centralized location.

  • Face-to-face meetings − The nature of such meetings is personal and should be succeeded by a written follow-up.

Effective Business communication can further be categorized into −

  • Effective oral business communication

  • Effective written business communication

Effective Oral Business Communication

Effective business communication mostly involves listening and speaking. Both the speaker and the listener share responsibility of making the message clear and understood. Besides, body language, tone of voice, choice of words and phrases, message clarification and communication style also play a role and impact the effectiveness of interpersonal transaction and interactions.

Techniques of Effective Oral Business Communication

Written Communication

Types of Communication

In this section, we will discuss the different techniques of effective oral business communication. The techniques are described below −

  • Speakers should know how to articulate their message so as to enable the listener to understand it well and deliver it in a manner that is consistent with the message itself.

  • The speech or spoken words should be properly worded and concise.

  • The speech should be contextual like serious issues are best delivered in a serious tone.

  • Knowing the listener(s) and how they react is instrumental in conceiving the subject matter of the speech.

  • For effective business communication, quiet location counts much. If one party is distracted by both external and internal distractors like sound, communication fails to yield desired result.

  • Involvement of all the concerned is of vital importance to make communication effective. Involvement means complete attention and dedication to discussion or analysis.

  • Effective or active listening is essential for participants in a communication. It is practiced by both the speaker and the listener in effective communication.

  • In order to become a better listener there is a need to eliminate all distractions during the conversations.

  • Active listening involves eye contact, nods, gestures and brief comments to show understanding. On the basis of these gestures and comments, the listener’s comprehension and reaction can be assessed. In case the listener seems confused, the speaker needs to re-assess the wording or delivery of the message.

  • The listener may ask questions, validate what is being said and provide input if necessary.

  • While speaking or interacting with someone, don’t just listen to whatever they are saying- rather be attentive and make mental notes.

  • Asking questions during discussion or an important conversation adds weightage to communication. It also helps the participants to learn everything they need to know. It shows that they are listening and confirming understanding and giving respect.

  • Questions are powerful instruments to make communication effective. It enables the persons concerned to get required feedbacks.

  • There are usually two types of questions to be asked during a communication process.

  • Close-ended questions, which are often answered with ‘yes’ or ‘no’ are essential when the communicators want to gather basic information quickly or want to obtain an answer without a long or drawn-out explanation.

  • Open-ended questions provide a broader and more comprehensive answer.

Feedback is a crucial part of communication and is vitally required by all concerned in a communication process. It marks the end of a communication process. The communicator on one side should convey his/her information in such a way that his/her targets can offer feedback or criticism on the information given.

During a particular conversation, a discussion or meeting proper and relevant communication types and the mediums should be put in place. Visuals should be shown to present information in a pleasant and palatable manner.

Reinforcing a positive and supportive culture will develop a clear understanding between employees. One of the very effective ways of communicating company’s culture is by taking help of the culture deck.

It is hard to have open communication if both sides fold their arms, clench their jaws and refuse to look each other in the eye. Nonverbal communications like gesture, tone of voice, eye contact are more meaningful than spoken words. If nonverbal messages are overwhelming the conversation, it might be better to wait until things settle. Nod your head and maintain an open posture to show you're absorbing what the other person is saying.

Effective Written Business Communication

Effective written business communication is an integral part of communication system in a business organization. Not all the communications can be oral. There has to be a number of mediums through which an organization can communicate in the written form.

E-mails, brochures, reports, letters, ads, speeches, articles, PowerPoint presentations are instances of business written communication.

Despite the fact that an overwhelming percentage of written communication is now produced online the need to write well has not diminished. Organizations produce ever increasing volumes of written communication in the form of emails, social media posts, guides, brochures, manuals, reports, and proposals.

Pros of Written Business Communication

Following are the pros of written business communication −

  • Written business communications can be edited and revised.

  • They provide a permanent record of the messages and can be used as precedents.

  • Enable the recipients to review the message and provide appropriate feedback

  • They are considered more effective for complex business communication that include facts and figures

  • They improve inter-organizational efficiency and enhance the image of the organization

  • They can be preserved as precedents in hard copy.

Cons of Written Business Communication

Following are the cons of written business communication −

  • Delay in getting feedbacks unlike in face-to-face communication; it leads to frustration and uncertainty in business situations where a quick response is desired.

  • Time consuming when it comes to composing the message

Types of Communication

In this section, we will discuss the different types of communication. The different types are as follows −

  • Verbal and Non-Verbal Communication

  • Formal and Informal Communication

  • Downward and Upward Communication

Communication is pivotal for any business to be successful. Depending upon the circumstances and business needs, the type of communication varies.

Communication is usually based on the nature and characteristics of the message and its context in which it is being sent. The choice of communication channel and the style of communicating affect communication.

Verbal Communication

Verbal communication refers to the form of communication in which message is transmitted verbally; where communication is carried out either by word of mouth or by writing.

Components of Verbal Communication

Following are the different components of verbal communication −

  • Understandable Language

  • Word choice

  • Inflection (pattern of stress in oral speech)

  • Tone

  • Body language

  • Eye behavior (oculesics)

  • Visuals (pictures, maps, charts, graphs, colors, signs, etc.)

  • Auditory elements (sounds, tunes, whistles, etc.)

Nonverbal Communication

Nonverbal Communication refers to communications made through various wordless or unspoken mediums.

Formal and Informal Communication

There are two channels of communication that exist in an organization – formal and informal.

Formal communications are those that are formal or ‘official’. These are a part of the recognized communication system which is engaged in the operation of the organization.

Informal communications grow out of social interactions among the people who work together within an organization. These are based upon conventions, customs and culture prevalent therein.

The following table shows the difference between formal and informal communication.

Bases Formal communication Informal communication
Definitions In formal communication, the interchange of information is carried out by means of pre-defined and formal channels of the organizational structure along the lines of authority. In informal communication, information spreads through informal channels i.e. in the form of grapevine (informal person to person communication; gossip). It is built around the social relationships of members of the organization. Doesn’t follow authority lines.
Also Known as Official Communication Grapevine Communication
Dependability More and well-acknowledged Comparatively less and tend to be inaccurate
Speed Time-taking; hence, slow Faster
Authenticity As this type of communication is mostly carried out in written orders and documents evidence and authenticity is present. Lack of documentary evidence makes it distorted and hence, inaccurate and unreliable.
  • It is more likely to be need in businesses as it is more evidential and dependable.

  • It helps in the fixation of responsibility and maintaining of the authority relationship in an organization.

  • No scope for creating and spreading rumors.

  • It acts as an efficient medium of expressing certain information that cannot be channeled via official channel. It is implicit, spontaneous, multidimensional and diverse.

  • It satisfies the people desires to identify what is happening in the organization and offers an opportunity to express dreads, worries and complaints.

  • It is highly flexible and flows freely to all directions.

  • Generally time consuming, cumbersome and sometimes leads to good deal of distortion.

  • It is expensive and less flexible.

  • It can flow only upward and downward direction.

  • It is obligatory to follow.

  • Not officially recognized channels of communication.

  • It has no role in delegating authority.

  • Greater scope of creating and spreading rumors. Message is often distorted.

  • May create indiscipline in the organization.

  • It has no evidential authenticity.

What is Grapevine?

Grapevine refers to an informal communication method in an organization. It is a person-to-person method of disseminating information by informal conversion or gossip. It is found to be more efficient than the formal one.

Types of Informal Communication

In this section, we will discuss the different types of informal communication.

Single-stranded Chain

In a single-stranded chain, information is passed by one person to another, who in turn passes it to some other and the process continues.

Cluster Chain

In a cluster chain, information is passed by one person to his/her reliable ones, and the latter passes it to their reliable friends and the communication continues.

Cluster Chain

Probability Chain

In a probability chain, a person passes the information to a randomly chosen person and the communication goes on.

Gossip Chain

In a gossip chain, a person passes the information to a group of people and the members of the group passes it to some more people and the information spreads.

Downward and Upward Communication

Communication passes on in different directions – downward, upward, or lateral in any organization. In this section, we will discuss the downward and upward communication directions and the basic differences that exist between them.

Downward Communication

  • When communication flows or starts from people at higher levels to those at lower levels in the organizational hierarchy.

  • Downward communication can be both oral and written.

  • The oral downward communication media are, for example, instructions, speeches, meetings, telephonic talks, louder-speakers and also the grapevine.

  • The written downward communication media are, for example, memoranda, letters, emails, handbooks, pamphlets, policy statement, procedures, notices, and electronic news display.

  • Higher authority or Top level of organization takes the initiative to start such communication.

  • Downward communication flows from the superior authority downward to subordinates till the bottom level in the hierarchy. Responses to downward communications move up along the same path.

  • Downward communication is called as instruction type communication system.

  • It is suitable in an authoritarian environment exists in an organization.

Upward Communication

  • Upward communication flows from subordinates to superiors and continues up the organizational hierarchy.

  • It is known as subordinate-initiated communication as the process of upward communication starts with the personnel at the bottom level of the organization.

  • Unlike the downward communication, upward communication is non-directive in nature.

  • It establishes a participatory work culture in the organization as under this communication process employees feel free to communicate their grievances and reservations upward.

  • It enables the top level management to get feedback from lower level employees and thereby improve organizational progress and prosperity.

  • It yields mutual trust among the management and the employees and bodes well for the growth of a strong interpersonal relationship in the organization leading to overall organizational development.

  • With this communication process, employees can be instrumental in forming new policies or changing those that are outdated.

  • Typical means of upward communication besides the chain of command are suggestions, appeal and grievance procedures, complaint systems, counseling sessions, the grapevine, group meetings etc.

  • Upward communication is also called consultative management.


  • Communication is sine qua non in a business organization.

  • In the words of R.W. Griffin, "Effective communication is the process of sending a message in such a way that the message received is as close in meaning as possible to the message intended".

  • Successful business largely flourishes on effective business communication.

  • Effective Business communication can further be categorized into −

    • Effective oral business communication

    • Effective written business communication

  • Effective written business communication is an integral part of communication system in a business organization.

  • The different types are as follows −

    • Verbal and Non-Verbal Communication

    • Formal and Informal Communication

    • Downward and Upward Communication

  • Grapevine refers to an informal communication method in an organization.