What is Business Communication? Process, Types, Importance

  • Post last modified:7 September 2022
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What is Business Communication?

Business communication is the process of expression, channelling, receiving and interchanging of ideas in commerce and industry.

Business Communication
Business Communication

In simple words, Business communication is the process of sharing information between people within and outside a company in order to promote an organization’s goals, objectives, aims, and activities, as well as increase profits.

What is Communication?

Communication is the process of passing information and understanding the same from one person to another. Thus, communication means to understand information, facts or opinions of someone.

Business Communication Definition

Business communication can be defined as the sharing of information between people within and outside the organization that is performed for the commercial benefit of the organization. It can also be defined as relaying of information within a business by its people.Wikipedia

Types of Communication

Communication implies an exchange of information.

Forms of Communications are:

  1. On the basis of Organisational Structure
  2. On the basis of Direction
  3. On the basis of Mode of Expression
  1. Organisational Structure
  2. Direction
  3. Mode of Expression

Success of Business through Communication

Business communication may make relations or may break relations. Business communication asserts, sustains and animates business relations.

It can figure out the problems of the organization and it can produce problems if the executives are not perfect in communication with employees, suppliers and customers.

Business communication can contribute to industrial turbulence and at the same time can bring industrial peace. Following summarized points further rationalize the need or implication of communication.

Communication is:

  • Basis of planning
  • Basis of decision making
  • Creating coordination and cooperation
  • Establishment of effective leadership
  • Development of human relations
  • Helpful in building image
  • Helpful in achieving peace and effective control
  • Leading to high morale and motivation
  • Unseen infrastructure of an organization
  • Helpful in delegation of authority.

Importance of Business Communication

Communication is a vital force, it is an important aspect of effective business organization

Importance of Business Communication are:

  1. Efficient functioning of the undertaking
  2. Facilitates decision making
  3. Proper planning
  4. Minimize organisational conflicts
  5. Job satisfaction and higher productivity
  6. Democratic management
  7. To establish better labour relations
  8. Effective organizing
  9. Enhance motivation and morale
  10. Sound human and industrial relation

Efficient functioning of the undertaking

Every type of organization whether small or big, public or private, communication plays a vital role. It is said that “good communication is good business.” The efficient performance of employees of an organization depends on effective communication within the organization.

Facilitates decision making

Desired results of an organization largely depend on the right decision at the right time. A communication system is a prerequisite for making a sound decision.

The quality of decision-based on the availability of data, facts, reports discussions and other means of communication. It is also essential to communicate a decision to the person concerned for effective implementation.

Proper planning

Communication also facilitates effective planning According to Koontz and O’Donnell “Effective planning occurs when everyone responsible for it has access to complete information affecting areas of planning.” Thus, communication is required not only for effective planning but also to ensure its better implementation.

Minimize organisational conflicts

In an organisation where various employees are working at different level, the conflicts arise due to one or more reasons. Proper communication reduces the conflicts by developing understanding. Communication helps them to know the views, problems, and thoughts of others.

Shobhana Khandwala writes “most of the conflicts in a business are not basic but are caused by misunderstanding and ignorance of the facts, proper communication between the interested parties reduce the point of friction and minimize those that inevitably arise.”

Job satisfaction and higher productivity

Effective communication promotes better performance as people are able to understand their jobs and roles in a better manner. Various sources of production such as machine, material, money does not resulted into productivity unless highly motivated men are there, and it is done with the help of co

Democratic management

Modern business organization are following democratic system of management. It requires good channels of communication so that employees, consumers and other stakeholders share information and participate in discussion, consultation and decision making.

To establish better labor relations

Industrial peace is the need of the day. An effective communication creates better management and labour relationship. Labour communicates their problems, suggestion and expectations to the organizational head, on the other hand manager share their policies, programmes with subordinate and explain them that and how they are beneficial to them also. It results into better labour relationship.

Effective organizing

Organizing involves delegation of authority, assigning liability, decentralization and establishes relationship between the members which cannot be done in absence of communication.

According to Dale Yoder “Communication is at the very heart of the process of organising.” Thus, communication is important for effective organization as success or failure of organization depends on it.

Enhance motivation and morale

Communication helps in enhancing morale of the employees, because they are aware of their role in business firm. It awakens a sense of security and encourages them to work. Effective communication plays critical role in enhancing the motivation and morale of employees.

Sound human and industrial relation

Robert D. Berth states “It is impossible to have human relations without communication.” The basic reason of disputes between the labour and management is communication gap. With the help of effective communication sound relations can be maintained as it promotes mutual understanding, cooperation and goodwill.

Role of Communication in Business

Peter Ferdinand Drucker (November 19, 1909–November 11, 2005) was an Austrian-born American management consultant, educator, and author, whose writings added to the philosophical and practical foundations of the advanced business corporation.

He was also a leader in the development of management education, and he devised the concept known as Management by Objectives (MBO).

Communication is not just significant for business. It is essential for the very existence and operation of any business or any other coordinated effort.

  1. Communication Dimensions
  2. Communication With Your Directs
  3. Communication With Your Peers
  4. Communication With Your Boss

Communication Dimensions

According to Drucker, there are three dimensions to being an effective communicator in all spheres of management. They are as follows:

Communication With Your Directs

A manager’s success is decided by the level of output from his/her directs. The first rule of understanding is do they understand their JD (job description) and the value they provide to the organization?

For if this is not determined, any communication will be hard to process and applied to work more slowly. In a worst case scenario a manager can misdirect, rather than direct if the employee does not realize their contribution.

Communication With Your Peers

Communicate what you are working on and what is going well and not as well. Your peers may not report to you, but they can render valued assistance and expertise. Inquire if there is anything you or your team is doing to keep them back.

If one department is doing well at the expense of others, the organization cannot improve and loses traction. With this question about feedback, your peers may also ask you what they are doing to hold you back. This criss-cross communication will assure you both have the information needed to improve yourselves and your teams.

Communication With Your Boss

Determine what communication techniques your boss finds effective. Are they a reader or a listener? Do they value verbal communication or hardcopy communication? Sending weekly reports to a boss that understands more verbally will be ineffective for the both of you, as you’ll keep writing and he’ll keep on deleting not knowing what to look for.

Invite feedbacks: Discover what you or your team could work on, what the priorities are and if there is any news that can affect you or your team.

For without direction, you will be mistaken. Your boss will most likely ask the same question with feedback, part your insights and ask for possible answers for the future. Once there is an understanding of what you and your manager need or do not require to perform on key targets, the question that follows is always: “Why didn’t we share each other’s feedback before?”

Success in an organization depends on all three spheres of communication: your directs, your peers and your boss. Drawing these spheres closer to the centre so they overlap more and more with uninterrupted communication and improvement will result not only in you being successful, but everybody around you as well.

7 C of Communication

There are 7 C of effective communication which are relevant to both written as well as oral communication. These are as follows:

  • Completeness: The communication must be complete. It should convey all facts required by the audience.

  • Conciseness: means communicating what you want to express in the least possible words without forgoing the other C’s of communication.

  • Consideration: implies “stepping into the shoes of others”. Effective communication must take the audience into consideration.

  • Clarity: implies stressing on a particular message or goal at a time, rather than trying to achieve too much at once.

  • Concreteness: Concrete communication means being particular and clear rather than fuzzy and general. Concreteness strengthens confidence.

  • Courtesy: in message entails the message should show the sender’s expression as well as should respect the receiver. The sender of the message should be sincerely polite, judicious, reflective and keen.

  • Correctness: in communication means that there are no grammatical errors in communication.

Barriers To Communication

Noise as a Barrier

“Noise” is the disruption or hindrance in communication process anywhere along the way

Perceptual and Language Differences

Perception is in general how each individual interprets the world around him. People generally want to receive messages which are significant to them.

Perception is in general how each individual interprets the world around him. People generally want to receive messages which are significant to them. In a corporate setting, this can be a little more difficult because the language used in a business context can often be seen as impersonal, or jargon-filled. This is why business language training is important to help employees learn how to communicate more effectively in the workplace.

Information Overload

Managers are bordered with a pool of information. It is necessary to control this information flow else the information is likely to be misinterpreted or forgotten or overlooked. As a consequence, communication is less effective.


At times we just not listen, but only hear.

Time Pressures

Frequently in an organization, the targets have to be achieved within a specified time period, the failure of which has adverse consequences.


Emotional state at a peculiar point of time also affects communication. If the receiver feels that communicator is angry he understands that the information being sent is very bad.

Complexity in Organizational Structure

Greater the power structure in an organization, more are the chances of communication getting lost.

Poor Retention

Human memory cannot function outside a limit. One can’t always retain what is being told especially if he is not interested or not attentive. This leads to communication collapse.

Characteristics of Non-verbal Communication in Organization

  • Non-verbal communication indicates the attitude and feeling in addition to what is being expressed through words.

  • Non-verbal communication relies on observation and interpretation.

  • Non-verbal message may compliment or contradict.

  • All body movements with exception of instrument movements are meaningful.

  • Dress or language used will reveal the communicator states or education.

  • Body movement and facial expressions often occurs spontaneously and can support or contradict the verbal message.

  • It has been found that non-verbal communication forms the larger part of the overall communication activity.

Business Communication Notes

(Click on Topic to Read)


  1. Business Communication: “ K.K. Sinha, Golgotia Publishing Company.
  2. Business Communication: “M.K. Sehgal, Vandana Khetrapal, Excel Books.
  3. Essentials of Business Communication: Rajendra Pal, J.S Korlahalli, Sultan Chand & Sons.

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