Communication is the process of transmitting information

and understanding from one person to another or from one

unit to other unit with a view to getting the desired response
from the receiver. Through this process two or more
persons exchange ideas and understanding among
themselves to achieve the desired effect in the behaviour of
another person.

It is a two-way channel for transmitting ideas, feelings,

plans, commands, instructions, reports and suggestions
that influence the attitude towards an organisation’s
objectives. The communicator’s goal is to convey the
meanings or ideas without distortion. Success of the leader
and the enterprise depends upon adequacy of
communication.

It is the responsibility of the managers to establish and

maintain the channels whereby they can convey their own
thinking and policies to the subordinates, and can receive
their reactions and an account of their problems.

DEFINITION

“Communication is an exchange of facts, ideas, opinions, or

emotions by two or more persons.” W. H. Newman

“Communication is the process of passing information and

understanding from one person to another.” Keith Davis
1. Sender’s Idea:
The first thing in communication process is to be familiar with the
idea or problem to be communicated. If the communicator has no
clear view of this idea or problem, its reception on the other end
may give similar obscure idea and may thus be misunderstood. So,
the process of communication demands full and clear view of the
idea or problem to be communicated.

2. Encoding the Idea:

When the idea is converted into a symbolic form in terms of some
kind of language, it may be termed as the encoding of the idea. The
language may consist of words, symbols, charts, diagrams, gestures,
etc. This encoding depends upon the personal characteristics of the
sender as well as the receiver. The style, length, form, clarity, etc. of
the message varies from person to person.

3. Transmission:
In transmitting the ideas or decisions, certain matters are to be
taken into consideration. The first consideration should be to select
an appropriate channel (i.e., verbal, non-verbal, written, etc.) and a
medium (telephone, e-mail, letter, face to face conversation, etc.).

This selection depends upon urgency, distance, availability of

means, cost and time factor, etc. Next thing is to determine the
person or persons to whom such ideas or decisions are to be
communicated. So, the selection of right course and right person for
communication is essential for its effectiveness.

4. Getting the Message by the Receiver:

The receiver must get the message to make the communication
fruitful. Suppose a letter or e-mail is sent to a person. It is not
possible for him/her to go through it and understand its meaning
unless it is received by him/her.

5. Decoding the Message:

Decoding means understanding or bringing out the meaning of the
message. It is very vital. If the receiver understands the message in
the same sense as the sender intends, the objective of
communication is presumed to be fulfilled.

6. Sending Feedback:
Feedback is the receiver’s response to the message. Having
understood the message the receiver reacts to it and responds
accordingly. The feedback evaluates the effectiveness of the
message. If the sense of the message is realist properly, the feedback
or the response will be desirable and, if it is not, one has to
understand that there are some barriers in the process. Steps are
required to be taken for the removal of such barriers.

7. Channel:
Channels are the routes or paths of the communication. The
sender’s idea is transmitted to the receiver through this path. Again,
the receiver sends feedback to the sender through the channel.
Thus, channel is used at least twice in the process of
communication. Oral or telephonic message, letter, different audio
and video media, computer, e-mail, fax, etc. are the popular
channels of communication. Selection of channel depends upon the
nature of the message, necessity, urgency and situational
conditions.
8. Noise:
It is not a separate step in the process. It may be present at every
step and make the communication less effective or ineffective. Noise
distorts the message and conveys ideas not intended by the sender
resulting in chaos, confusion and complexity.

Classification of Channels of Business

Communication:
Channels of business communication may be classified
from different viewpoints as follows:

1. On the basis of Organisational Structure:

On the basis of organisational structure, the channels of
business communication may be divided into:
(i) Formal, and

(ii) Informal.

2. On the basis of Direction:

The direction of business communication channels may
be:
i. Downward,

When information flows from the persons occupying higher

positions to those at lower levels, it is called ‘Lower Level
Communication’. The flow of communication being
downward it is also called ‘Downward Communication’. It is
 usually conveyed through oral or written orders, reports,
manuals, etc. and is the most common practice in all
business organisations.

ii. Upward and

When communication moves upward from the subordinates to

the superiors, it is called ‘Upper Level Communication’. The
means of upper level communication includes the submission of
reports and suggestion, opinions and attitudes, complaints and
grievances, etc.

The upper level employees can understand the pulse of the lower
level employees through such communication.

The effectiveness of such communication depends upon good

superior-subordinate relationship and intention of the superiors
to remove the grievances and honour the emotions of the
subordinates. The subordinates should also be co-operative and
avoid unnecessary criticism, fault-finding attitude, complaining
for fake or baseless grievances, etc.

iii. Horizontal or Lateral.

‘Horizontal or Sidewise or Lateral Communication’ takes

place between the people of same level in the positional
hierarchy of the organisation through oral or written
method. Communication between the employees or
supervisors or managers of the same department or another
department is examples of horizontal or lateral
communication. It helps to promote understanding and co-
 ordination in the organisation. It is especially important in
large or decentralised organisation.

3. On the basis of Way of Expression:

On the basis of the ways or means of expression business
communication channels are of two types:
(I) Written, and

(II) Oral.

IMPORTANCE OF COMMUNICATION

Basis of Decision-Making:
Communication helps the managers to take essential
decisions and conduct vital operations. The quality of
decisions made in an organisation entirely depends on the
volume and quality of information available to the
management authority. In the absence of effective
communication it may not be possible for top management
personnel to come in closer contact with their subordinates.
Job Satisfaction:
Proper communication system extends mutual trust and
faith. It thus creates confidence in the ability of their
manager, promotes their loyalty to the enterprise and
stimulates their job interest. Proper communication system
enables the subordinates to bring to the notice of the
managers their viewpoints, grievances and troubles. This
facility raises the morale of the workers and, ultimately,
leads to job satisfaction for high performance.
Means of Co-Ordination:
Co-ordination implies orderly group efforts to provide unity
of action. This unity of action is the result of team work
which, in turn, depends, to a great extent, upon clear
understanding of the organisational goals, the mode of their
achievement and situation of the work. The function of the
business communication is to get the workers fully
informed of everything relating to the work and bring a
perfectly tuned harmony in their work.
Establishment of Effective Leadership:
Effective leadership is established through communication.
The ideas, orders, instructions, direction, etc., of the leader
or manager is transmitted to the subordinate employees
through communication. The manager can influence them
and create a healthy relation by wiping out
misunderstanding and distrust between management
authority and subordinates through communication.
Proper Planning:
Communication is very helpful in planning the activities of
business. It provides the managers information and ideas
necessary for sound planning. According to Theo Haimann
“Only through good communication can company policies
and practices be formulated and administered.” Secrecy of
information creates suspicion among the workers and
separates them. Understanding of the common problems
unites them for showing a better record of their
performance.