What Is Business Communication and Why Do You Need It?


Everyone has heard the expression “communication is vital.”, especially in business. Effective and productive business communication can rise or ruin the company’s performance, whether you’re a manager delivering internal goals to your staff or a virtual office manager addressing clients. 

Effective communication is critical in business, and the key is to ensure that your workforce interacts effectively all of the time. Organizations with connected employees show productivity increases of 20-25%. So here we will comprehend “what is communication?” and learn many types of business communication to assist your business effectively and personalize communication to every scenario. 

Read this article thoroughly to understand business communication and why you need it. 

What Is Business Communication?  

Business communications involve the information exchange between personnel within and outside of an organization. 

Employees and administration must connect effectively to achieve organizational goals and better align with fundamental corporate values. Its primary goal is to enhance organizational procedures, remove silos, keep people informed, and decrease mistakes. 

Norms, values, laws, and policies must be conveyed to individuals inside and outside the business to be successful. 

Why Do We Need Business Communication?  

Maintaining strong workplace interactions between employers and workers requires an efficient company communication plan. But it doesn’t end there; here are some reasons we need business communication and its purpose. 

  • The Basis of Coordination 
    In this day and age of specialization, businesses include departments such as research, production, marketing, and management. There will be no integration if these departments do not interact with one another and with Managers. Business communication is essential in firms to ensure synchronization across divisions. 
  • Fluent Working
    A manager coordinates a company’s human and physical aspects to function seamlessly and effectively. This cooperation is impossible to achieve without effective communication. 
  • The Basis of Decision Making
    Good communication offers information to the management that can be used to make decisions. When the details are insufficient, the right decisions can not be made. Thus, communication is the foundation for making wise decisions. 
  • Increases Managerial Efficiency
    Management’s performance primarily depends on its ability to get things done adequately by its people. Management uses motivating strategies through communication to influence workforce behavior. Thus, Business Communication improves management efficiency.
  • Increases Cooperation and Organizational Peace 
    The two-way communication method fosters collaboration and mutual understanding among employees and between employees and management. This leads to less conflict, peace, and efficacious procedures in the industry. 
  • Boosts the Morale of the Employees
    Employee morale refers to the workforce’s individual and collective moral state regarding integrity and optimism. Employees get irritable and enraged when morale is low. Management should always aim to boost employee morale through Business Communication so that they sense they are valuable to the firm. 

Types of Business Communication  

Business communication entails the flow of information among members of the organization, between the organization and outside parties. 

The five main types include 

  • Formal Communication  
  • Informal Communication  
  • Unofficial Communication  
  • Oral Communication  
  • Written Communication


Formal Communication  

It is a systematic and planned channel of work-related interaction within a business where staff interacts among themselves through an appropriate medium. 

Types of Formal Communication Networks: 

A communication network is a structure that is created to comprehend how information goes from one person to another. 

  • Chain: A chain pattern is formed when an employee conveys official information to another employee, who then conveys it to a subsequent employee. 
  • Wheel: A wheel pattern is produced when a single employee distributes any administrative information to a large group of employees. 
  • Circular: An employee sends the knowledge to a coworker, who then passes it on to another coworker, and so on. The message is passed from one employee to the following until it reaches the person who started the procedure. 
  • Free Flow: No particular pattern is followed in this sort of network. Anyone can share information in an ad hoc fashion.  
  • Inverted V: Subordinates can connect directly with both their immediate superior and their superior or top management.


Informal Communication  

It is an unofficial kind of communication resulting from companionship or casual relationships, in which conversations may or may not be pertinent to work or the business. 

Types of Informal Communication Networks 

  • Single Strand: Information is sent from one person to another, then to the next, and so on, similarly to the chain pattern. 
  • Gossip / Grapevine:  A single individual disseminates information inside an informal group, where the information may or may not be accurate. This is also known as the grapevine arrangement. 
  • Probability: Identical to the gossip pattern, but no one is required to participate in the communication. 
  • Cluster: When a person gives information to just his trusted individuals, expecting that they would not reveal it to anybody else. As a result, the information passes to a specific set of people; this network is referred to as a cluster. 


Unofficial Communication  

Employee communication beyond the workplace on subjects irrelevant to work is referred to as unofficial communication. Unofficial communication routes include casual meetings, dinner parties, and social events among employees. The presence of such a channel and the information passing must be acknowledged by management. 

  • Oral Communication 
    Oral channels rely on the spoken word. They include face-to-face, in-person demonstrations, conferences, presentations, teleconferences, video meetings, lectures, and seminars. As body language and voice intonation offer meaning to the listener, these routes transmit low-distortion information. 
  • Written Communication
    It comprises e-mails, messages, notes, letters, papers, reports, newsletters, spreadsheets, and other forms. They are among the more streamlined forms of commercial communication. When communicating in writing, the writer must offer adequate context so that the words may be easily comprehended. The recipient should enquire about any uncertainty and, if necessary, seek clarification. 

Different Barriers to Communication  

  • Semantic Barriers 
    This refers to linguistic and symbol boundaries, as well as their interpretation. Every language comprises signs and symbols used to communicate the message from one person to another. Morse code and symbols are also utilized in languages for communication. The individual’s language abilities cause communication constraints. 
  • Psychological Barriers 
    The sender’s and recipient’s psychological states of mind significantly impact interpersonal communication. When a person feels emotional, his tonality amplifies the message’s script. This presents an impediment to regular communication, resulting in emotional boundaries. 
  • Organizational Barriers
    This is determined by the overall organizational policy that governs the organization’s communication network. As it is essential to offer a good communication channel to the organization, such a plan can be a written document addressing many communication elements, particularly the upwards, downwards, and lateral. 
  • Personal Barriers
    The sender’s and recipient’s personal characteristics can be a barrier to good communication. If a director believes that a certain message may jeopardize his authority, he may withhold it. Furthermore, if supervisors lack faith in their subordinates’ abilities, they may not seek their counsel. Subordinates may be unwilling to provide valuable recommendations if there is no compensation or recognition for a good proposal.  

Business Challenges That Effective Business Communication Solves 

  • Unclear Roles and Responsibilities
    While many firms strive for a dynamic, team-oriented work environment, failing to effectively convey individual roles and duties can have major implications. When employees are unsure about their responsibilities, they are more inclined to believe that others handle problems. Businesses that fail to convey requirements to each employee, both when they start in a new role and regularly, risk having an inefficient and ultimately dishonest workforce. However, defining core roles, areas of authority, and how success is judged helps firms run more smoothly. It also contributes to better staff morale and retention rates. 
  • Lack of Communication Between Departments
    Even small organizations assign duties to different divisions. This can be efficient as it allows each group to focus on its specific job. However, it is difficult for a corporation to function efficiently if departments do not collaborate—or are unaware of each other’s roles and duties. Interdepartmental communication is also critical in larger organizations to achieve overall goals. For example, suppose the Finance department is unsure of what Marketing is doing. In that case, the marketing division is unsure of what the operations department is anticipating. No one knows what research and development are working on. In such cases, the firm is likely to struggle. It is critical to communicate the big picture to streamline the processes. 
  • Inaccurately Written Communications
    Businesses regularly convey critical information in writing, such as new projects, corporate developments, workforce updates, processes, and even events and social releases. Employees can be confused and frustrated by poorly written messages, regardless of the subject. However, when firms invest the time and money required to create clear, well-written messages, receivers can comprehend the information and take the appropriate action. 
  • Poor Customer Service
    Two things occur with customer service when an organization’s communication is unsatisfactory. First, staff in customer-facing jobs will lack the necessary information. Second, clients will have a terrible experience if they feel low employee morale. 

Steps to Set Up Business Communication Process  

This framework offers detail on each phase of the process in all communication. 

  • Creating the Message 

The sender begins the communication process by composing a message they plan to convey to an individual or group. They take their time crafting the facts they wish to convey. 

  • The Message’s Encoding 

The sender converts the information generated into a format that can be communicated to another person. This entails processing the information into a representation, such as text or video. 

  • Choosing a Channel 

The sender selects the communication channel, and it should be the most appropriate medium for the desired audience.  

Examples are YouTube videos, social media posts, or blogs on a website.  

  • Message Distribution 

The message is then effectively transferred to the recipient by the sender. 

  • Deciphering the Message 

The information received is decoded by the receiver. The sender has endeavored to put themselves in the place of the recipient and write a message that the receiver will interpret as the sender intended. This is the cornerstone of good communication, although transmitters do not know if they have succeeded until this stage is completed. 

  • Feedback  

When senders receive feedback, they understand the effectiveness of the message. However, there is no mechanism for the recipient to send input in one-way communication, which both public relations and marketers wish to avoid. 


This article talks about business communication and its characteristics and importance. We can conclude that business communication is important in any business and should always be one of the most important essential factors of success. Good communication skills in a business setting significantly contribute to personal development, improved work performance, and career satisfaction. Check out UNext Jigsaw’s Executive Program in Strategic Sales Management for in-depth knowledge and expertise. 

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