Forms of Communication

Business communication can be both formal or informal and internal or external. As you can
see from the following chart, many of the same tools can be used in any of these four
situations.

Internal
Formal Planned communication
among insiders that follows
the company’s chain of
command.
Examples: memos, reports,
e-mails, etc.
Inform Casual communication
al among employees that do
not follow the company’s
chain of command.
Examples: phone calls, face
to face conversation, instant
messages, etc.
External
Planned communication with
outsiders.
Examples: letters, advertising,
websites, etc.
Casual communication with
suppliers, customers, investors,
and other outsiders.
Examples: phone calls, face to
face conversation, instant
messages, etc.

Formal communication networks

Formal communication networks are systems designed by management to dictate who should
talk to whom to get a job done. Every organization has a formal communication network, in
which ideas and information flow along the lines of command (the hierarchical levels) in the
company’s organization structure. Throughout the internal formal network, information flows
in three directions - Upward communication, downward communication, and horizontal
communication.
Upward Communication
Communication that flows from subordinates to superiors or from employees to management
is known as upward communication.
Some ways of carrying out upward communication include reports, petitions, meetings etc.
Objectives of upward communication are as follows:
● Provide information
● Provide feedback
● Give Suggestion
● Put forward problems and grievances
● Reporting
Importance of upward communication:
Through upward communication employees can express their ideas and suggestions for
improvements on different matters which help the organization as well as boost morale of the
employees. Also, through upward communication employees can place their individual or
collective problems and grievances before the management for redress. Through upward
communication management gets feedback from employees. Management can monitor and
analyze organizational performance using regular operational reports.
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Potential benefits of upward communication:
● Prevention of new problems and solution of old ones
● Increased acceptance of management decisions
Downward Communication
Communication that flows from the superiors to subordinates or from management to
employees is known as downward communication.
Some ways of carrying out downward communication include notice, handbooks,
loudspeaker announcements etc.
Objectives of downward communication are as follows:
● Give instructions
● Announce decisions
● Explain policies and procedures
● Provide motivation
● Apprise performance
Importance of downward communication:
All the strategic decisions take place at the top of the organization. It is imperative that this
information is disseminated at all levels and downward communication is the way to do it.
Downward communication clearly tells the employees how to work and informs them about
the dos and don’ts of the business which results in less confusion. The role of top
management is very important in motivating employees so that they perform well and for that
the downward channel of communication is used.
Potential benefits of downward communication:
● Prevention/correction of employee errors
● Greater job satisfaction
● Improved morale
Horizontal communication
Communication between co-workers with different areas of responsibility is called horizontal
communication.
Some ways of carrying out horizontal communication include face-to-face discussions,
telephonic talks, memos etc.
Objectives of horizontal communication are as follows:
● Task coordination
● Problem solving
● Sharing information
● Conflict resolution
● Building connection
Importance of horizontal communication:
Horizontal Communication is very important for the smooth functioning of every
organization as it promotes understanding and coordination between various departments.
Horizontal communication helps getting a job done quickly by overcoming departmental
barriers and bureaucracy. Horizontal communication is essential in teamwork.

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Potential benefits of horizontal communication:
● Increased cooperation among employees with different duties
● Greater understanding of organization’s mission
Informal Communication Networks
Alongside the formal networks, every organization also has informal communication
networks—patterns of interaction based on friendships, shared personal or career interests,
and proximity. Informal relationships within organizations operate in ways that have little to
do with the formal relationships laid out in organizational charts. Two colleagues who are
avid cricket fans or share passion for travelling are more likely to swap information on work
than co-workers who have no such bonds. Beyond any sort of organizational connection,
people are connected with one another through informal personal networks—with friends,
neighbors, family members, and all sorts of other relationships.
Functions of Informal Networks within Organizations:
● Confirming. Some informal communication confirms formal messages.
● Expanding. Information communication can fill in the gaps left by incomplete formal
messages.
● Expediting. Informal networks can often deliver messages more quickly than official
channels can.
● Contradicting. Sometimes informal networks contradict official messages.
● Circumventing. Informal contacts can sometimes help you bypass official channels that
are unnecessarily cumbersome and time-consuming.
● Supplementing. Sometimes even management realizes that informal communication can
get the job done better and encourage open, unstructured contacts between people from
various parts of the organization.
Grapevine
A grapevine is an informal and unofficial communication network within the organization. It
arises due to co-existence of people. Therefore, it is found in all organizations. It operates
wherever two or more employees are in contact, from the lunchroom to the golf course to the
company’s e-mail and instant messaging systems. Grapevine becomes strong if formal
channels have structural weaknesses or do not work properly for some reasons and
employees believe that the formal networks are not providing the information they need.
Grapevine channels carry information rapidly. As soon as an employee comes across some
information of interest unofficially he passes it immediately to his closest friend who in turn
passes it to others and thus, it spreads quickly. Often the managers use grapevine to know the
reactions of their subordinates on their policies or plans. Thus, the feedback obtained is quick
compared to formal channel of communication.
The grapevine is not trustworthy always and is sometimes damaging as it spreads information
more by gossips and unconfirmed reports.
External Communication Networks
External communication flows into and out of the organization by both formal and informal
means. Formal means include carefully prepared letters, announcements, etc. and informal
means include meeting potential sales contacts at industry gatherings or networking at social
events, etc. Informal exchanges are now considered so important that a new class of

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technology has sprung up to enable them. Just as Facebook, MySpace, and similar social
networking websites such as Spoke, LinkedIn, and Ryze help businesspeople connect.

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