BUSINESS COMMUNICATION (Unit -1)

INTRODUCTION The word communication originates from the Latin word “communis”, which
means “common” and the word business stands for any economic activity which is undertaken with
a view to earn profit and the communication undertaken in the process of this activity is termed as
"Business communication.”
DEFINITION
Communication is a process of passing information and understanding from one person to another.
---------Keith Davis
Communication is generally defined as the activity of conveying information. Communication has
been derived from the Latin word "communis", meaning to share.
---------- Wikipedia
Communication is something people do. To understand human communication process, one must
understand how people relate to each other.
--------Wilbur Schramm

MEANING
Communication is defined as “The flow of material information perception, understanding and
imagination among various parties”. Business includes those organizations, which are engaged in
the production and distribution of goods and services to earn profit. Therefore Business
communication means, “Flow of information, perception etc. either within a business organization
or outside the organization among different parties”.

The Concept of Communication

The English word ‘communication’ has been derived from the Latin word, ‘Communicare’ which
means to impart or participate or to transmit. The word ‘Communicare’ is derived from the root
‘Communis’ which means to make common or to share.
Communication is 1) the activity or process of sharing or exchanging ideas, feelings, information,
experience between two or more persons; 2) an act or instance of transmitting; 3) the information
actually communicated by some means.

The communication can be defined as the process through which two or more persons come
to exchange ideas and understanding among them.

The definition involves two aspects in communication:

First, there is something, which is transmitted, such as, facts, feelings, ideas, etc. It implies that there
must be a receiver if communication is to occur. The sender of message must consider the receiver
while structuring his message from a technical standpoint as well as in delivering it. When the
receiver is not considered, there is either no response or there is wrong response.

Second, the definition emphasizes the understanding element in the communication. Sharing of
understanding would be possible only when the person, to whom the message is meant,
understands it in the same sense in which the sender of the message wants him to understand.
Thus, communication involves something more than mere transmission of the message or
transmission and physical receipt thereof. The correct interpretation of the message is important
from the point of view of organizational efficiency. As such, the greater the degree of understanding
present in the communication, the more the likelihood that human action will proceed in the
direction of accomplishment of goals.
OBJECTIVES &PURPOSE OF COMMUNICATION

The objectives of business communication would include the following:

● To give and receive information

● To provide advice
● To educate and train customer
● To issue orders and instructions
● To persuade target audience
● To receive suggestion
● To motivate and to integrate
● To relate and to entertain

Business Communication:
● William G. Scott defines business communication, as “Administrative communication is a
process which involves the transmission and accurate replication of ideas ensured by
feedback for the purpose of eliciting actions which will accomplish organizational goals.”

Importance of Business Communication

● Persuasion is one of the factors of marketing communications. Persuasion is the main

reason companies engage in marketing: to persuade their target audience to take action, as
in, buy their product or subscribe to their services, make a phone call, or donate money.
● All marketing communication is goal oriented, as the predetermined objective helps to
create effective marketing communication strategy.
● Every successful marketing communication helps plan the marketing message at every
contact point that are received by the target audience.
● It facilitates in controlling the performance and take necessary remedial actions based on
feedback information from them.
● Communication creates a meeting of minds and improve industrial relations. It helps to
develop mutual co-operation and understanding thereby improving industrial productivity.
● Communication is indispensable for every organization to develop and maintain reputation
or goodwill with its customers, investors, dealers, suppliers etc.

● Principles and Nature of Communication

● A business Organization is a group of people associated to earn profit. Various kinds of

activities have to be performed by the people of an organization to earn profit. Business
Communication is known as backbone of any Organization thus various activities in
business need an effective and systematic communication.

● Without efficient communication, one cannot even imagine to do work and hence will be
unable to earn profit. Since the aim of business organization is to earn profit, the
organization will die without profit and this death is a result of the absence of
communication. This is why communication is called lifeblood of a business organization.
We can prove this statement more clearly through following points.
● Gain clarity over - WHO? WHERE? WHAT? HOW MUCH? FORM, CHANNEL, PERIOD and
WHAT WAS IT?
● Communication involves plurality of persons
● Existence of message is essential which may be the orders, instructions or information
about the managerial plans, policies, programs
● It’s a two way and continuous process
● Its primary purpose is to motivate a response
● Communication may be formal, controllable or informal uncontrollable
● It can be in vertical, horizontal or diagonal

The Seven Cs of Communication help overcome barriers:

1. Consideration: Consideration states that every message should be prepared keeping in mind the
person who will be the receiver of the message. Receiver's interest should be kept in mind while
drafting the message. Specific ways to indicate candidness are: -

● Focus on "you" attitude instead of "I" or "We"

● Material or content of the message should be from reader's point of view.
● Use of positive words should be allowed so that the readers could receive positive reaction.
● Benefits of readers should be the prominent part of message.

Examples:
We Attitude: I am delighted to announce that there will be extra classes for the students in college
to clarify their problems.
You Attitude: You will be able to clarify your problems in the extra classes organized in college.

2. Clarity: Clarity is the most important characteristic of communication especially in case of

Oral Communication/Presentation. Clarity in words, language of expression is very important to
ensure proper presentation of ideas, message one wants to communicate during conversation.
Clarity can be achieved through following ways:

● Precise, familiar use of words or language during communication, Effective sentences

should be framed,

● There should be unity in all words of message so that the main idea of message can be
properly communicated.
● Short length sentences of average 17 to 20 words should be preferred.

3. Completeness: Complete message is very important to communicate the main idea or

information behind the message. Oral presentations should be as far as possible planned or
restructured and all the information related to message should be properly communicated.
Guidelines for ensuring completeness are as follows:

● Provide all necessary information required for accurate understanding of message.

● Presenter should properly answer all Questions asked by the audience during oral
presentation/communication.
● Some extra information whenever desirable should be given to audience to make the
presentation topic clearer, specific or complete.

4. Conciseness: Conciseness is the essential requirement of oral communication. Concise message

saves time on expense for both sender and receiver. Concise means brief, short and informative
message, which is able to explain the idea of message with minimum words. Words in message
should not be repetitive in nature & only relevant information should be communicated in message.

5. Correctness: In oral communication, grammatical errors should be avoided. Right level of

language should be used both in formal & informal communication. Use of accurate words and
spellings should be considered.

6. Concreteness: It means specific, definite on valid use of information than vague or general.
Concrete facts or figures should be used to make the receivers know exactly what is required or
desired. Concrete language on information helps in interpreting the message in the same way as
communicator intends to communicate the message.

7. Courtesy: A proper decorum of speaking should be maintained while making oral

communication/ presentation. One should say things with force or being assertive without being
rude. Polite or humble language should be used which should not be insulting, against the religious,
social as personal values of listener. Discriminatory language based, on gender, race, age, color,
caste, creed, religion etc. should be avoided.

ELEMENTS IN COMMUNICATION

Communication is the exchange of ideas between two minds. This process of exchanging

idea is based on following five factors.

1. Sender:-

Sender is the person who initiates the process of communication. He generates an idea in

his mind regarding production, invention, innovation, request, order, enquiry etc. Therefore, he is the
first factor of communication process and his function is to generate an idea. Therefore, it is
necessary that the idea should be clear, and convertible into message. For this purpose, the sender
needs to apply his knowledge and imaginative power.

2. Message:-

The idea in the mind of sender is transformed into words that is called message. The sender

decides on the length, style, organization and tone of the message. The message may be presented in
many ways, depending on the subject, purpose, audience, personal style, mood and cultural

background.

3. Media:-

The media of transmission of message are electronic media as T.V., radio, computer and

print media as newspapers, letter, magazine etc. Media plays a very important role in helping the

receiver to understand the message. A wrongly chosen medium can interrupt the process of

communication, Selection of medium depends upon message, audience, urgency and situation.

4. Receiver:-

Receiver is the person who gets the message from the sender, decodes it, understands it and

interprets it.

5. Feed Back:-
Having understood the message, the receiver responds to the sender in yes or no or asks further
questions. This process is called feedback.

PROCESS OF COMMUNICATION
The process of communication involves two or more persons participating through a medium that
carries the information or message for a particular purpose, which is mutually understood by both
the sender and receiver. Only when these conditions are fulfilled, a significant communicative
situation will take shape.

The receiver is anyone who is exposed to a message. Once receiver, receives a message, he/she
decodes it. Decoding is the process of interpreting what a message means. After customers decode a
message, they respond in some way, indicating to what extent the message was received, properly
decoded and responded. This response is called feedback, which is a response that conveys a
message back to the source. The communication process occurs in a context or environment where
other things are going on-competitive brand message, people walking by, a telephone ringing, as
well as thoughts inside customers’ heads. These “other things” are called noise-interferences or
distractions that can negatively affect the transmission and reception of a message.
Verbal and non-verbal communication

VERBAL COMMUNICATION: Verbal communication means such a communication

that takes place by means of a language or words. It includes the following contents.

a. Oral communication (Speaking & listening)

b. Written communication

1. Speaking:-

In order to send message in business, speaking plays a vital role. Giving instruction, conducting
interviews, attending meetings, sending orders through telephone calls are very common in today’s
business.

2. Writing:-

It is used when a complex message is sent. Placing order through letters, informing

employees through circulars, sending reports and memos, filling different government forms,
keeping records in writing are some examples of this aspect of verbal communication.

3. Listening:-

People in business spend more time in obtaining information then transmitting it. Listening
is the most important way to receive information like information regarding order of employers,

instructions, rules and regulations, customer trend etc., are obtained through listening. But in
listening, people generally forget 75% of the message after few days.

4. Reading:-

Reading reports, memos, policies, circulars, and different business statements are essential.

NON-VERBAL COMMUNICATION: It means communication without the use of language

or words. It includes appearance, body language, silence, etc. Its explanation is as follows:

∙ Body language: personal appearance, walk, gestures, facial expressions, hand movements,
posture and eye contact.

 Paralinguistic features: a person’s voice, volume, pitch, rate, pauses, articulation, voice
modulation, etc.

Dimensions of Communication

In an organization, communication flows in five main directions-

1. Downward

2. Upward

3. Horizontal /Lateral

4. Diagonal

5. Grapevine Communication

Downward Communication:

Communication that flows from a higher level in an organization to a lower level is a downward
communication. In other words, communication from superiors to subordinates in a chain of
command is a downward communication. The managers to transmit work-related information to
the employees at lower levels use this communication flow. Employees require this information
for performing their jobs and for meeting the expectations of their managers. The managers use
downward communication for the following purposes –

Providing feedback on employees’ performance.

⮚ Giving job instructions.

⮚ Providing a complete understanding of the employees’ job as well as to communicate them how
their job is related to other jobs in the organization

 Communicating the organization’s mission and vision to the employees.

 Highlighting the areas of attention.

Organizational publications, circulars, letter to employees, group meetings etc. are all examples of
downward communication. In order to have effective and error-free downward communication,
managers must:

⮚ Specify communication objective.

⮚ Ensure that the message is accurate, specific and unambiguous.

⮚ Utilize the best communication technique to convey the message to the receiver in right form

Merits of downward communication

● Delegating authority and responsibility: Delegation means entrusting the subordinates

with some responsibilities along with due authority. It is essential to make the subordinates
capable in performing their jobs. Since downward communication, starts form higher level;
it helps mangers in delegating authority and responsibility to the right persons
● .Maintaining discipline: Downward communication occurs in conformity with officially
recognized rules and regulations. Therefore, it helps in establishing official discipline in the
organization.
● Increasing efficiency: Downward communication provides necessary guidance, orders,
instructions and explanations of various complex issues to the subordinates that ultimately
increase the efficiency of the employees.
● Informing organizational plans and procedures: In an organization, the top-level
executives develop the plans, policies, strategies, procedures etc. Downward
communication plays a significant role in communicating those plans, policies, strategies’
and procedures to the lower levels of the organization.
● Explaining the complex issues: Sometimes subordinates need explanation of
organizational policies and procedures. In such situations, managers rely on downward
communication to provide necessary explanations and analysis.
● Issuing orders and instructions: Downward communication is the only means to circulate
various orders, instructions, guidance, and advices to the subordinates. Without downward
communication, organization is like a boat without a boatman.
● Avoiding bypassing of hierarchy: Downward communication takes place by following the
established chain of command of the organization. Thus, it reduces the chance of sending
message to someone through bypassing the immediate subordinate.
● Maintaining good labor-management relationship: Downward communication helps to
create and maintain good labor-management relationships in the organization. When top-
level executives communicate with their subordinates sincerely and courteously, it
develops good interpersonal and inter-group relationships between management and work.
In turn, this will motivate the employees and ensure good labor-management relation in the
organization.

Disadvantages or demerits of downward communication

● Time-consuming: Downward communication is a delayed process. In this communication,

information flows through different levels of hierarchy. As a result, when information
reaches to the lower level workers, it may have lost its significance or utility.
● Distortion of information: Downward communication also suffers form problem of
distortion of message. People have a tendency to modify or manipulate information.
Therefore, information is passed from one individual to another or from one level to
another, authenticity of information is lost.
● Lack of explanation: In most cases, downward communication contains messages without
necessary explanation and clarification. For this reason, subordinates fail to understand the
message accurately.
● Deterioration of relationship: Heavy reliance on downward communication also
deteriorates the labor-management relationships. Because it does not provide any scope of
direct communication between them.
● Lack of feedback: Absence of feedback is another major drawback of downward
communication. The top-level executives usually place little or no importance to the
messages received from subordinates. Superiors hardly seek feedback from the
subordinates. Due to negligence of the superiors, subordinates also seldom send feedback.
As a result, communication becomes ineffective.
● Lack of enthusiasm: Managers send orders, instructions and advices to the subordinates
through downward communication. This form of communication energizes and activates
the employees. Therefore, delay in the downward flow of information adversely affects the
enthusiasm of the employees.
● Creation of frustration: Downward communication is directive in nature. This type of
communication hardly allows the subordinates to discuss any matter with their superiors.
Moreover, the subordinates are compelled to follow the orders and instructions of the
superiors. Such coercion creates frustration in the mind of the employees.

Upward Flow of Communication: Communication that flows to a higher level in

an organization is called upward communication. It provides feedback on how well the
organization is functioning. The subordinates use upward communication to convey their
problems and performances to their superiors.

● The subordinates also use upward communication to tell how well they have understood
the downward communication. The employees to share their views and ideas and to
participate in the decision-making process can also use it. Upward communication leads to a
more committed and loyal workforce in an organization because the employees are given a
chance to raise and speak dissatisfaction issues to the higher levels. The managers get to
know about the employees’ feelings towards their jobs, peers, supervisor and organization
in general. Managers can thus accordingly take actions for improving things.

● Grievance Redressal System, Complaint and Suggestion Box, Job Satisfaction surveys etc. all
help in improving upward communication. Other examples of Upward Communication are
-performance reports made by low level management for reviewing by higher level
management, employee attitude surveys, letters from employees, employee-manager
discussions etc.

Advantages of upward communication

● Development of plan: The information received from subordinate plays important role to
help development of planning of the organization.
● Providing suggestions and opinions: By upward communication system, subordinate
gives necessary suggestions and opinions to superiors about the work-related issues of the
organization.
● Motivating to employees: Upward communication system allows lower level staff to
express their attitude or opinion to upper-level staff. As a result, sub-ordinates are
influenced to work more towards fulfillment to target .
● Providing constructive suggestion: All employees are supplied with constructive and
important messages that can help to implement the goals or objectives .
● Good labor-management relationship: Upward communication is participative in nature.
Here, information is invited from lower level executives and employees and based on this
information top executive makes a decision. Therefore, good relation between subordinates
and bosses is created for the betterment of the organization.
● Providing feedback: The subordinate’s reaction is returned to the superior in this
communication system. Therefore, top-level management can decide what to do and what
not to do clearly.
● Creating favorable environment: Upward communication helps to develop a favorable
working situation in an organization by creating a good relation among all employees.
● Promote harmony: Upward communication creates a friendly environment in the
organization, which leads to a peaceful and harmonious relationship among the
subordinates and superiors.
● Decision-making: Top-level executives or superiors needed much information before
taking a decision on a particular issue. Subordinates supply this information through the
help of upward communication.
● Developing creative and innovative ideas: Upward communication facilitates easy excess
of the employees or subordinate to the superiors in providing necessary constructive
suggestions and opinions about the work-related issues of the organization.

Disadvantages of upward communication

● Changes of information: In upward communication, subordinates may change their
accurate information. Therefore, the top executive cannot take an accurate decision.
● Unwillingness: Sometimes subordinates do not send the information to their superior
willingly. So, the communication system may be disrupted.
● Fear of inefficiency: The main problem of upward communication is fair to superiors.
Generally, superiors make a question about the employees work position and efficiency.
Many employees fear to communicate and share their ideas, constructive suggestions and
opinions with the superiors.
● Indiscipline: Sometimes employees communicate directly to superior by avoiding proper
channel or chain of command. Here discipline is not properly maintained.
● Bypassing: In the process of upward communication, sometimes workers directly approach
the topmost authority with their suggestions or bypassing their immediate boss. This is
harmful to any organization.
● Flattery: In order to convince the superior bosses, subordinates can take the help of
flattery and for this reason; subordinates may conceal the truth and provide incomplete
information to top level.
● Lack of initiative: Generally subordinate is reluctant to take the initiative to participate in
upward communication for a different reason.
● Risk of distortion of messages: In upward communication, subordinates willingly distort
the message because they fear if they tell the original fact to their bosses, they may face
some problems.
● Delay: It is an important limitation of upward communication. It is a long and slow
movement of information to the higher authority.
● Supervisor’s negligence: Sometimes top-level executives discourage the upward flow of
information and neglect the constructive suggestions and opinions about the work-related
issues of the organization

Lateral / Horizontal Communication: Communication that takes place at same levels of hierarchy
in an organization is called lateral communication, i.e., communication between peers, between
managers at same levels or between any horizontally equivalent organizational member. The
advantages of horizontal communication are as follows:

⮚ It is time saving.
⮚ It facilitates co-ordination of the task.

⮚ It facilitates co-operation among team members.

⮚ It provides emotional and social assistance to the organizational members.

⮚ It helps in solving various organizational problems.

⮚ It is a means of information sharing.

⮚ It can also be used for resolving conflicts of a department with other department or conflicts within
a department.

Limitations

● Creates Confusion
● Leads to Disruption
● Creates Conflicts
Diagonal Communication or crosswise communication: Communication that takes place
between a manager and employees of other workgroups is called diagonal communication. It
generally does not appear on organizational chart. For instance - To design a training module a
training manager interacts with an Operation personnel to enquire about the way they perform
their task. The Accounts people of an organization visiting different employees in various
departments for their IT calculation, bonus for workers etc. fall under diagonal communication.

Advantages of diagonal communication-

1. Spread information more quickly than the traditional forms of communication.

2. Serve to link groups that otherwise would have to either communicate through the much slower
upward— downward organization communication channels or not communicate at all.

3. Enable individuals with diverse knowledge in different parts of the organization to contribute to
problem solution, enhancing the effectiveness of the use of resources within the organization.

Disadvantages of a diagonal communication —

1. These interfere with the normal organizational routine, & they cannot be effectively controlled by
the, organization.

2. It leads to the formation of a grapevine.

3. The staff members come to know about all the information even before it is circulated to their
heads or superiors
Channels of communication
A breakdown in the communication channel leads to an inefficient flow of information.
Employees are unaware of what the company expects of them. They are uninformed of what is
going on in the company.
This will cause them to become suspicious of motives and any changes in the company. Also
without effective communication, employees become department minded rather than company
minded, and this affects their decision-making and productivity in the workplace.
Eventually, this harms the overall organizational objectives as well. Hence, in order for an
organization to be run effectively, a good manager should be able to communicate to his/her
employees what is expected of them, make sure they are fully aware of company policies and
any upcoming changes.
Therefore, managers to optimize worker productivity to ensure the smooth running of the
organization should implement an effective communication channel
Formal Channels of Communication
The messages, which are circulating on regulated, preset channels, of an organization, are
creating the formal communication. The content of the communication is related to the
organization’s activity, to the work and to anything, which is related to those. The formal
communication can consist in verbal messages, nonverbal messages, written, under the shape
of letters, telephone messages, radio messages, and printed, internal notes. Even some gestures
can consist in formal communication. The authorized ones transmit the messages: on official
channels, these arrive to the ones who need to react, to people or machines which need to
know the content of these messages. Usually, all formal communications are recorded and kept
in the organization’s evidence.
Informal Channels of Communication
Informal communication arises out of all those channels that fall outside the formal channels
and it is known as grapevine. It is established around the societal affiliation of members of the
organization. Informal communication does not follow authority lines as in the case of formal
communication.
Informal communication takes place due to the individual needs of the members of an
organization and subsists in every organization. Normally, such communication is oral and may
be expressed even by simple glance, sign or silence. Informal communication, is implicit,
spontaneous multidimensional and diverse. It often works in-group of people, i.e. when one
person has some information of interest; he passes it on to his informal group and so on.
An organization can make efficient use of informal channels to fortify the formal channels of
communication. It acts as a valuable purpose in expressing certain information that cannot be
channeled via the official channels. It satisfies the people desires to identify what is happening
in the organization and offers an opportunity to express dreads, worries and complaints.
Informal communication also facilitates to ameliorate managerial decisions, as more people are
involved in the process of decision-making.
Inspite of many advantages, informal communication has certain disadvantages. Informal
communication contains facts, deceptions, rumors and unclear data. The informal channels of
communication may transmit completely imprecise information that may harm rather than
help an organization. In addition, it is impossible to fix the responsibility for its origin or flow of
information. However, for the efficient working of any organization both formal and informal
communications are required.

An example of an informal communication channel is lunchtime at the organization's

cafeteria/canteen. Here, in a relaxed atmosphere, discussions among employees are encouraged.
Also managers walking around, adopting a hands-on approach to handling employee queries is an
example of an informal communication channel. Quality circles, team work, different training
programs are outside of the chain of command and so, fall under the category of informal
communication channels
Grapevine Communication (Informal Communication)
Grapevine is an informal channel of business communication. It is called so because it stretches
throughout the organization in all directions irrespective of the authority levels. Man as we
know is a social animal. Despite existence of formal channels in an organization, the informal
channels tend to develop when he interacts with other people in organization.
It exists more at lower levels of organization. Grapevine generally develops due to various
reasons. One of them is that when an organization is facing recession, the employees sense
uncertainty. In addition, at times employees do not have self-confidence due to which they
form unions. Sometimes the managers show preferential treatment and favor some employees
giving a segregated feeling to other employees. Thus, when employees sense a need to
exchange their views, they go for grapevine network, as they cannot use the formal channel of
communication in that case. Generally, during breaks in cafeteria, the subordinates talk about
their superior’s attitude and behavior and exchange views with their peers. They discuss
rumors about promotion and transfer of other employees. Thus, grapevine spreads like fire and
it is not easy to trace the cause of such communication at times.
Example of Grapevine Network of Communication

1. Suppose the profit amount of a company is known. Rumor is spread that this much profit is
there and on that basis bonus is declared.
2. CEO may be in relation to the Production Manager. They may have friendly relations with
each other.

Advantages of Advantages of Grapevine Communication

1. Grapevine channels carry information rapidly. As soon as an employee gets to know some
confidential information, he becomes inquisitive and passes the details then to his closest
friend who in turn passes it to other. Thus, it spreads hastily.

2. The managers get to know the reactions of their subordinates on their policies. Thus, the
feedback obtained is quick compared to formal channel of communication.

3. The grapevine creates a sense of unity among the employees who share and discuss their
views with each other. Thus, grapevine helps in developing group cohesiveness.

4. The grapevine serves as an emotional supportive value.

5. The grapevine is a supplement in those cases where formal communication does not work.

Disadvantages of Grapevine Communication

1. The grapevine carries partial information at times as it is more based on rumors. Thus, it
does not clearly depicts the complete state of affairs.

2. The grapevine is not trustworthy always as it does not follows official path of communication
and is spread more by gossips and unconfirmed report.
3. The productivity of employees may be hampered as they spend more time talking rather
than working.

4. The grapevine leads to making hostility against the executives.

5. The grapevine may hamper the goodwill of the organization as it may carry false negative
information about the high-level people of the organization.

A smart manager should take care of all the disadvantages of the grapevine and try to minimize
them. At the same time, he should make best possible use of advantages of grapevine.