Communication refers to the exchange of information between people.

Why do business communicate?

1. Marketing purposes
Business needs to communicate with potential and actual customers to research
their needs through primary market research. In many industries, this creates an
ongoing need for two-way communication. Businesses also inform their customers
of the products that they are selling through a variety of promotional activities such
as above-the-line and below-the-line promotional techniques.
2.

Operational purposes
Internal communication will take place to continually ensure that operations are
organized efficiently. For example, meetings will be held to discuss how to respond
to large order or complaints from customers. Alternatively, communication will be
necessary with suppliers to order raw materials or components and to arrange
delivery.

3.

Managing the workplace

Effective communication is essential to the process of recruitment and selection.
Negotiation with trade unions or other employee representatives over pay and
working conditions as well as appraisal interviews are further examples of this
category communication.

4.

Financial communication
Information on a businesss financial information is vital to effective decisions at all
levels within the organization. Junior managers will require budgets to enable them
to control expenditure and act as targets for revenue. More senior managers would
look at data relating to cash flow and profitability produced by the businesss
finance department. Financial communication will also take place externally when
businesses send invoices to customers or receive credit notes.

5.

Legally required communication

Most businesses are obliged to communicate with external parties to provide key
information about business operations. Businesses are obliged to share information
with shareholders during annual general meetings or submit annual financial
statements to government organizations for taxation.
How do business communicate?
A communication channel is the medium through which a message is transmitted
to its intended audience.
Two-way communication exists when information is passed up the organizational
structure as well as down, or outside the organization and back in again.
Vertical communication refers to the exchange of information between individuals
or groups who are at different levels within the organization
Horizontal communication refers to the exchange of information between
individuals or groups at the same hierarchy level.

Mediums of Communication:
Spoken Telephone communication, Meetings, Presentations, Intervies
Written Reports, Business letters, Memoranda
Electronic Electronic mail (Email), Websites, Text messages, Video conferencing
Visual - Use of visual graphics, banners, info-graphics, and charts
Factors affecting the methods of communication
Costs of communication
Speed of communication
Target audience
Keeping a record of the communication

Barriers to effective communication

1. The use of technical jargon or technical terms
Jargons are specialist terms used by people in particular industries which may be used
when communicating with non-specialists
2. Lack of understanding by managers
Managers do not recognize that there is a problem with communication. Senior managers
have access to all the information they require and can communicate easily with all in the
organization they may be unaware that others in the business do not receive information
essential to their jobs.
3. Inappropriate management and leadership styles
Some managers use leadership styles that discourage effective two-way communication
within the business. Some managers prefer to work with an autocratic leadership style and
a traditional organization structure which only promote down-ward vertical communication,
resulting in lack of information at different levels
4. Merger and take over activity
Mergers and takeovers usually create larger and more complex business. This can create
communication problems and alienation of the workforce. This happens when business are
expanding but fail to oversee the necessary actions to maintain or improve communication
effectiveness.
5. Too much reliance on IT systems
In order for IT to be effective, basic IT trainings are required and systems that suit the
precise needs. Simply throwing IT at the problem creates more problems

Effective communication occurs when information is passed on to other people or groups

and feedback is received confirming that the communication has been understood.
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Effective communication makes it easier to implement change

It encourages and develops commitments to the business
Effective communication helps to ensure that the business is coordinated and that
all employees pursue the same corporate objectives

Methods to improve communication

Train employees in communication skills
Satisfactorily employees will require training at regular intervals to maintain
communication effectiveness
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Avoid the danger of generating too much information

Recognize that cultural and linguistic differences exist

Large multinationals often operate in different continents and countries with
different cultural environment and hence employing different employees. Business
needs to be sensitive to the cultural differences when communicating messages .