Communication is more than sending information. It is effective only when the intended audience receives and understands the message and, where appropriate, gives feedback. Businesses need communication to coordinate operations, manage employees, serve customers, make decisions and maintain relationships with stakeholders.
You should be able to explain why businesses communicate, compare methods and channels of communication, identify barriers, and evaluate how managers can improve communication. In examination answers, the best method depends on the audience, urgency, cost, complexity of the message and need for feedback or a permanent record.
A business message has several parts. A sender creates a message, chooses a medium, sends it to a receiver or target audience and may receive feedback. The medium is the method used to carry the message, such as a meeting, telephone call or email.
Businesses communicate with actual and potential customers to research needs, promote products, build public relations, arrange deliveries and negotiate prices. This often requires two-way communication because firms need information from customers as well as sending information to them.
Internal communication coordinates production and service activities. Externally, businesses communicate with suppliers about orders, delivery dates, quality and availability. During a crisis, rapid and clear communication can protect customers, employees and the business' reputation.
Recruitment, selection, appraisal, training, negotiation over pay and working conditions, and everyday supervision all depend on communication. Poor communication can weaken motivation and industrial relations.
Managers need budgets, cash-flow information, profit data and other financial reports to make decisions. Businesses also communicate externally through invoices, payments and information for investors and owners.
Businesses may have to provide specified information to tax authorities, regulators and shareholders. Public companies, for example, must publish an annual report containing required information about performance.
Managers require relevant, timely and accurate information. Communication supports planning, coordination and control by helping managers understand what is happening and what action is needed.
Information exchanged within the organisation, such as a manager sending instructions to a team, a budget being issued to a department or employees discussing a project.
Information exchanged between the organisation and outside stakeholders, such as customers, suppliers, government bodies, local residents or potential employees.
Businesses use spoken, written, electronic and visual methods. No method is automatically best. Managers should match the method to the purpose and audience.
Fast and useful for simple messages and immediate feedback. It normally provides no visual information and no automatic written record.
Allow detailed discussion, questioning and feedback. They can be expensive and time-consuming, particularly when people must travel.
Useful for explaining projects, ideas, products or performance to groups. Slides and other visual material can help communicate complex information.
Formal two-way communication commonly used in recruitment, appraisal, disciplinary or grievance situations. They allow detail but involve relatively few people.
Suitable for detailed analysis and information that needs to be recorded. Reports may cover financial performance, investigations or business proposals.
Provide a formal written record and can be appropriate for external communication, although they are slower than many electronic methods.
Short internal written communications used to pass information quickly and concisely. In many organisations, email has replaced much of this use.
Written communication can be checked, stored and referred to later, making it useful when detail, accountability or evidence is important.
Fast, low-cost and useful across time zones. It can be personalised or sent widely, but excessive email can create information overload.
Used to publicise products, collect information, make sales and provide customer support. Even small businesses can communicate with a large audience through a website.
Allows targeted communication, customer interaction, promotion and public relations. Mistakes can become public quickly and managing accounts requires staff time.
Cheap and suitable for short, simple messages sent to many people. They are less suitable for complex detail.
Human agents can respond directly to customers and provide feedback, but staffing many simultaneous conversations can be costly.
Computer-based systems can handle many customer enquiries at once and provide consistent responses, although unusual questions may be handled poorly.
Internal electronic networks that can give employees access to messages, documents and information across different locations.
Video meetings reduce travel and allow face-to-face communication across locations. Messaging tools support quick exchanges, file sharing and digital teamwork.
Posters, displays, webpages, photographs, symbols and other images can communicate simple messages quickly and can make information easier to remember. A weakness is that some visual communication is one-way, so the sender may not receive feedback.
Managers consider technology, training, staff time and opportunity costs. The cheapest method is not always best if poor communication causes costly errors.
Urgent messages may require telephone, instant messaging, email or video communication. Less urgent, formal or detailed matters may justify slower methods.
The size, location and characteristics of the audience matter. A message to one employee may suit a conversation, while a message to thousands of staff in many countries may require electronic distribution.
Complex or sensitive messages may need two-way discussion, visual support or a permanent record. Simple information may be communicated effectively with a shorter method.
Communication can be between two people, from one person to a group, or between groups. The direction and opportunity for feedback affect the quality and speed of communication.
Information travels in one direction and no feedback is received. It can be quick, but the sender cannot be sure that the receiver has understood the message.
Information is exchanged and feedback is possible. This can improve understanding and decision quality, but may take longer and can generate excessive information.
Vertical: information moves up or down between different levels of hierarchy. Horizontal: information is exchanged between people or groups at the same level.
Horizontal communication may occur alongside this vertical flow, for example when managers from different departments coordinate a project.
| Channel | Possible problem | Business consequence |
|---|---|---|
| One-way | No feedback or employee input. | Misunderstanding may go unnoticed and decision quality may be lower. |
| Two-way | Large quantities of responses or prolonged discussion. | Managers may face information overload and urgent decisions may be delayed. |
| Vertical | Information may be altered, delayed or blocked as it passes through levels. | Tall structures can suffer slower or less accurate communication. |
| Horizontal | Informal discussion may conflict with decisions made through official vertical channels. | Coordination can weaken, and decisions may require additional approval. |
A barrier is any factor that prevents information from moving accurately and efficiently to the intended audience. Managers need to diagnose the barrier before choosing a solution.
Useful for policies, instructions, official decisions and information where accuracy, accountability or a record matters. They help ensure that important messages are consistent.
Moves quickly through social relationships and can reveal employee attitudes. It may become stronger when formal communication is weak or when the organisation is going through change.
| Possible advantages | Possible disadvantages |
|---|---|
| Can improve working relationships and team understanding. | Information can be inaccurate or distorted. |
| Can give managers quick feedback on employee reactions. | Rumours can contradict formal messages and create confusion. |
| Can support job satisfaction by allowing employees to share ideas and concerns. | Managers may have to spend time correcting misinformation. |
| Can supplement formal communication. | It should not replace official channels for important matters. |
Listening, praise, clear instructions and feedback can improve motivation, commitment and productivity.
Two-way communication helps identify needs, solve problems and improve customer service, which may support sales and loyalty.
Reliable information about orders, timing and quality supports efficient production, especially where the business uses just-in-time systems.
Relevant information improves planning, coordination, prioritisation and control, leading to better-quality decisions.
Good external communication helps the business understand social change and present itself clearly to potential employees, communities, investors and the media.
Effective communication keeps departments focused on common corporate objectives and makes strategic and operational change easier to implement.
Communication requires listening, speaking, writing, reading and increasingly technological skills. Training should be updated rather than treated as a one-off event.
Managers should evaluate communication needs before adding new technology or sending more messages. More information is not automatically better information.
International organisations should make employees aware of cultural differences and avoid assumptions when communicating across countries and groups.
Managers should create routes for employees and other stakeholders to ask questions, clarify meaning and provide information that improves decisions.
Formal communication should handle important business information, while managers can still listen to informal channels to understand attitudes and concerns.
Urgency, cost, audience, complexity, record-keeping and feedback requirements should determine the method used.
Questions open in a pop-up. Each answer is marked immediately, with an explanation so you know why it is correct or incorrect.