What is 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. 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 verly 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. In early times, business communication was limited to
paper-work, telephone calls etc. But now with advent of technology, we have cell phones, video
conferencing, emails, satellite communication to support business communication. Effective
business communication helps in building goodwill of an organization.

Business Communication can be of two types:

1. Oral 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. An example of Informal business
communication would be - Grapevine.
2. Written Communication - Written means of business communication includes - agenda,
reports, manuals etc.
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.

Communication Process

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 to communicate 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. For instance - a training manager conducting training for
new batch of employees. Sender may be an individual or a group or an organization. The
views, background, approach, skills, competencies, and knowledge of the sender have a
great impact on the message. The verbal and non verbal symbols chosen are essential in
ascertaining interpretation of the message by the recipient in the same terms as
intended by the sender.
3. Message - Message is a key idea that the sender wants to communicate. It is a sign that
elicits the response of recipient. Communication process begins with deciding about the
message to be conveyed. It must be ensured that the main objective of the message is
clear.
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. This choice of communication medium varies depending upon the
features of communication. For instance - Written medium is chosen when a message
 has to be conveyed to a small group of people, while an oral medium is chosen when
spontaneous feedback is required from the recipient as misunderstandings are cleared
then and there.
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 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.
Oral Communication
Oral 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. Oral communication 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.
 Oral communication 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.
 Oral communication is an essential for teamwork and group energy.
 Oral communication promotes a receptive and encouraging morale among organizational
employees.
 Oral communication 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.
 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 and 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.

Written communication is more precise and explicit.

Effective written communication develops and 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.

Non Verbal Communication - Actions Speak Louder than Words

Scenario 1 – You are sitting in front of an interview panel with arms crossed. So far you have
not been asked a single question, however, your crossed arms have spoken louder than the
words.
Tip 1 – Never keep your arms crossed especially during formal one-on-one meetings. It suggests
you are not open to feedback and could also suggest that you are trying to dominate the
situation.

Scenario 2 – You are giving a presentation to a group of 20 people. You keep your gaze fixed at
the centre of the class / room through the presentation – your gaze has spoken louder than
your words.

Tip 2 – Your gaze at one person should not be more than 4 - 5 seconds while delivering a
presentation / communicating with a large group unless you are addressing an individual.

Scenario 1 and 2 clearly demonstrate the importance of Non Verbal Communication.

What is Non Verbal Communication ?

It is communication of feelings, emotions, attitudes, and thoughts through body movements /

gestures / eye contact, etc.

The components of Non Verbal Communication are:

 Kinesics: It is the study of facial expressions, postures & gestures. Did you know that
while in Argentina to raise a fist in the air with knuckles pointing outwards expresses
victory, in Lebanon, raising a closed fist is considered rude?
 Oculesics: It is the study of the role of eye contact in non verbal communication. Did you
know that in the first 90 sec - 4 min you decide that you are interested in someone or
not. Studies reveal that 50% of this first impression comes from non-verbal
communication which includes oculesics. Only 7% of comes from words - that we
actually say.
 Haptics: It is the study of touching. Did you know that acceptable level of touching vary
from one culture to another? In Thailand, touching someone's head may be considered
as rude.
 Proxemics: It is the study of measurable distance between people as they interact. Did
you know that the amount of personal space when having an informal conversation
should vary between 18 inches - 4 feet while, the personal distance needed when
speaking to a crowd of people should be around 10-12 feet?
 Chronemics: It is the study of use of time in non verbal communication. Have you ever
observed that while AN employee will not worry about running a few minutes late to
meet a colleague, a manager who has a meeting with the CEO, a late arrival will be
considered as a nonverbal cue that he / she does not give adequate respect to his
superior?
  Paralinguistics: It is the study of variations in pitch, speed, volume, and pauses to
convey meaning. Interestingly, when the speaker is making a presentation and is looking
for a response, he will pause. However, when no response is desired, he will talk faster
with minimal pause.
 Physical Appearance: Your physical appearance always contributes towards how people
perceive you. Neatly combed hair, ironed clothes and a lively smile will always carry
more weight than words.

Remember, “what we say” is less important than “how we say it” as words are only 7% of our
communication. Understand and enjoy non verbal communication as it helps forming better
first impressions. Good luck!

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.

The importance of communication in an organization can be summarized as follows:

1. 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.
2. Communication is a source of information to the organizational members for decision-
making process as it helps identifying and assessing alternative course of actions.
3. Communication also 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.
4. Communication also helps in socializing. In todays life the only presence of another
individual fosters communication. It is also said that one cannot survive without
communication.
5. 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 in an
organization. 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.