Business communication refers to the exchange of information between individuals, departments, or organizations to conduct business activities. Effective communication is vital for the success of any business. There are various types of business communication used in the corporate world.
Overview of Business Communication
Business communication can occur in different forms and serve various functions. The main goal is to exchange information between parties clearly and efficiently. The types of business communication include formal communication, informal communication, horizontal communication, vertical communication, diagonal communication and external communication.
Key Aspects of Business Communication
|Facilitates information exchange for decision-making and collaboration.
|Verbal, Written (emails), Electronic (video conferencing).
|Internal (employees, management) and external (customers, suppliers, investors).
|Formal (reports), Informal (social media).
|Upward, Downward, Horizontal.
|Text, oral, visual, and electronic communication.
|Synchronous (real-time), Asynchronous (delayed).
|Awareness of cultural differences in language and communication styles.
|Importance in Crisis
|Vital for timely information, addressing concerns, and maintaining transparency.
|Tools and Technologies
|Communication platforms, video conferencing, email, social media.
|Written records for clarity, accountability, and reference.
|Systems for obtaining responses, enhancing effectiveness, and addressing concerns.
|Training and Development
Formal communication follows the formal lines of authority and communication flow in an organization. There are established chains of command, and communications flow vertically between different levels. Some examples include:
Memos are written communications used to share information and give instructions among teams or departments. They follow a specific business format and style. Though emails are used more frequently today, memos continue to be used for official records.
Official letters are sent to communicate with external stakeholders like customers, vendors, clients, government agencies, etc. They could be letters placing orders and making requests, responding to inquiries, settling claims, etc.
Proposals are detailed documents sent by businesses to pitch their products or services to potential clients. They need to follow certain guidelines and formats.
Reports communicate data collected and convey research findings and results. They are factual and structured documents submitted at regular intervals or as required.
Informal business communication does not follow official channels and rigid guidelines. While formal communications require strict adherence to protocol, informal ones promote free exchange of information. Some examples are:
Meetings allow multiple employees to come together and brainstorm, collaborate, provide updates, etc. They could be department meetings or interdepartmental. Though structured, they promote two-way communication.
The business grapevine, or informal rumor mill, involves employees discussing official and unofficial news not communicated formally by the management. Though the accuracy of rumors may vary, the grapevine helps spread information fast across the organization.
Horizontal communication refers to the communication between different departments, groups, and teams at the same level of an organizational structure. Some examples include:
When the marketing, finance, HR, production, and other departments at the same level communicate, coordinate, and collaborate with each other, it is termed cross-departmental horizontal communication.
Communication between members of the same team or employees at the same designation across different teams is also horizontal communication.
As the name suggests, vertical business communication involves information flowing up and down the hierarchy between managers and subordinates. Some examples are:
When information flows from the upper managerial levels down to the lower levels, it is called downward vertical communication. Instructions, guidelines, company policies, feedback, etc. get conveyed down the chain of command through various channels.
Upward communication moves from subordinates to higher authority levels, like employees providing progress reports, performance metrics, project updates, grievances, suggestions, etc. to their reporting managers and senior management.
Diagonal communication cuts diagonally across the horizontal and vertical chains of command. Communications between a department head and employees in other departments that don’t report directly to the executive would be a diagonal flow of communication. It facilitates coordination between employees outside the formal chain of command.
External Business Communication
Communications with parties outside the organization are termed external business communications. They include interactions with customers, investors, media, government, vendors, partners and other stakeholders in the external environment. Some common mediums include:
Company websites provide information about products, services, brand values and culture to potential and current customers and clients. Websites allow one-way communication on a large scale.
Companies leverage popular social media networks like Facebook, Instagram, X/Twitter, LinkedIn, etc. for promotions, customer engagement and external marketing communication. They allow two-way communication.
Advertisements on TV, radio, print, online, etc. help brands inform and persuade consumers to buy their products and services. Advertising enables one-way mass communication.
PR and Media Communications
Press releases, interviews, press meets and public relations help brands provide information to and communicate with the media, investors and external stakeholders.
Efficient communication, both internally between employees and departments and externally with other stakeholders, is vital for any company to operate well. Understanding the types of communications taking place and choosing suitable mediums is essential for businesses aiming to achieve their goals and objectives. A robust communication system boosts productivity, keeps everyone informed, helps address issues promptly, and promotes collaboration.
What are the four main types of business communication?
The four main types are formal communication, informal communication, horizontal communication, and vertical communication.
What are examples of external business communication?
External business communications include company websites, advertising, social media, PR, sales letters, customer service calls, conferences, etc.
Why is informal communication important in an organization?
Informal communication supplements formal channels, spreads information quickly, addresses rumors, promotes free exchange of thoughts, and improves understanding between employees.
What are barriers to effective business communication?
Barriers include organizational structures, language differences, information overload, personality clashes, lack of planning, wrong medium, technical issues, bias and assumptions.
How can businesses improve communication effectiveness?
Clearly defining objectives, using appropriate mediums, active listening, providing context and background, confirming receipt of communication, encouraging feedback, following up are some ways businesses can improve communication effectiveness.
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