Meaning and Significance of 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 a constant flow of information. Feedback is an integral part of business communication. Organizations these days are very large and involve a large number of people. There are various levels of hierarchy in an organization. More significant the number of levels, the more difficult it is to manage the organization. Communication here plays a very important role in the process of directing and controlling the people in the organization. Immediate feedback can be obtained and misunderstandings if any can be avoided. There should be effective communication between superiors and subordinates in an organization, between the organization and society at large (for example between management and trade unions). It is essential for the 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 paperwork, telephone calls etc. But now with the advent of technology, we have cell phones, video conferencing, emails, and satellite communication to support business communication. Effective business communication helps in building goodwill in an organization.

Business Communication can be of two types:

Oral Communication: Oral communication can be formal or informal. Generally, business communication is a legal means of communication, like meetings, interviews, group discussions, speeches etc. An example of Informal business communication would be – Grapevine.

Advantages of Oral Communication

  1. There is a high level of understanding and transparency in oral communication as it is interpersonal.

  2. There is no element of rigidity in oral communication. There is flexibility for allowing changes in the decisions previously taken.

  3. The feedback is spontaneous in the case of oral communication. Thus, decisions can be made quickly without any delay.

  4. Oral communication is not only time-saving, but it also saves money and effort.

  5. 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.

  6. Oral communication is essential for teamwork and group energy.

  7. Oral communication promotes receptive and encouraging morale among organizational employees.

  8. Oral communication can be best used to transfer private and confidential information/matters.

Disadvantages/Limitations of Oral Communication

  1. Relying only on oral communication may not be sufficient as business communication is formal and very organized.

  2. Oral communication is less authentic than written communication as they are informal and not as organized as written communication.

  3. Oral communication is time-saving as far as daily interactions are concerned, but in the case of meetings, long speeches consume a lot of time and are unproductive at times.

  4. Oral communications are not easy to maintain and thus they are unsteady.

  5. There may be misunderstandings as the information is not complete and may lack essentials.

  6. It requires attentiveness and great receptivity on part of the receivers/audience.

  7. Oral communication (such as speeches) is not frequently used as legal records except in investigation work.

Written Communication: Written means of business communication includes – agenda, reports, manuals etc.

Advantages of Written Communication

  1. Written communication helps in laying down apparent principles, policies and rules for running an organization.

  2. It is a permanent means of communication. Thus, it is useful where record maintenance is required.

  3. It assists in the proper delegation of responsibilities. While in the 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.

  4. Written communication is more precise and explicit.

  5. Effective written communication develops and enhances an organization’s image.

  6. It provides ready records and references.

  7. Legal defences can depend upon written communication as it provides accurate records.

Disadvantages of Written Communication

  1. Written communication does not save on costs. It costs huge in terms of stationery and the manpower employed in writing/typing and delivering letters.

  2. 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.

  3. Written communication is time-consuming as the feedback is not immediate. The encoding and sending of messages take time.

  4. Effective written communication requires great skills and competencies in language and vocabulary use. Poor writing skills and quality hurt an organization's reputation.

  5. Too much paperwork and email burden are involved.

Communication is a process of exchanging verbal and non-verbal messages. It is a continuous process. A prerequisite of communication is a message. This message must be conveyed through some medium to the recipient. This message must be understood by the recipient in the 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 feedback from the recipient to the sender on how well the message is understood by him.


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