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DOCUMENT ON COMMUNICATION (PHASE II-

FINANCE AND MANAGEMENT)
 PHASE II- FINANCE AND MANAGEMENT
TOPIC
Communication: Steps in the Communication Process; Communication Channels; Oral versus
Written Communication; Verbal versus non-verbal Communication; upward, downward and
lateral communication; Barriers to Communication, Role of Information Technology.

INTRODUCTION

Communication is one of the main principles of organisation. It has been considered as an effective tool for
achieving the goals of an organisation. All organisations, may be small or big, simple or complex, general or
technical, have the necessity of communication network. It plays a vital role, as functioning of all other
Important principles of the organisation depends upon its availability and effectivity.

Ineffective communication has been identified as the root cause of many problems in the world. The concept
of communication is interrelated with concepts such as motivation, coordination, leadership, structure; and
decision making in organisations.

The term communication is, generally applied in the sense of imparting knowledge or transmitting
information, however, in its wider connotation, it includes inter-change of thoughts, partaking of ideas and
a sense of participating and sharing. Thus, the essence of communication is, not information but
understanding.

SOME DEFINITIONS
"Communication is the process of effecting an inter-change of understanding between two or more people".
"Communication is the mutual inter-change of ideas by any effective means".
"....the imparting or inter-change of thoughts, opinions, or information by speech, writing, or signs".
"Communication is the arrangement of environmental stimuli to produce certain desired behavior on the
part of the organism".
In brief communication means "shared understanding of a shared purpose".

ELEMENTS OF A COMMUNICATION SYSTEM

There are five main elements of a communication system.

The first among these is a communicator, he may be called as the speaker or sender.
Transmission procedure is the second element. It is the responsibility of transmission centre to ensure proper
delivery and distribution of messages in the organisation. It can be done through radio, mail, telephone, etc
Form of the communication is the third element and it may be an order, regulation, manual, letter, report,
ruling, circular, etc.
Recipient is the fourth element. Every communication should reach to all those who are tobe involved in
effecting their behaviour.
Desired response is recognised as the fifth and last element of communication. Under it, the higher authority
requires evidence of compliance with instructions through formal replies and reports to determine whether the
information or instruction has influenced the administrative behaviour of the recipients or not.

STEPS IN THE COMMUNICATION PROCESS

Claude Shannon and Warren Weaver have developed the most widely used model of communication
process.
It consists of eight components:
 1. Source
2. Encoding
3. Message
4. Channel
5. Decoding
6. Feedback
7. Noise

The source is the initiator of communication, who wants to transmit his ideas, thoughts, needs, intentions to
another person
Encoding is the process in which the ideas to be conveyed are translated into a code or set of symbols or some
other format or expression
The message is the actual physical product representing the meaning which the source wants to convey
The channel is the medium through which the message is transmitted. It is the connecting link between the
sender (source) and the receiver
Decoding is the process which translates the message into a form that can be understood by the receiver
Receiver is the person to whom the message is directed
Feedback is the response from the receiver which enables the sender (source) to determine whether the
message was received and understood as originally intended
Noise includes those factors in each of the components of communication that reduces the accuracy of the
message. It can occur in any stage of the communication process

CHANNELS OF COMMUNCATION
The channels (also called networks) of communication are of 2 types:
1. Formal
2. Informal

A formal channel is deliberately established by the management for the transmission of official information.

An informal channel, on the other hand, is an unofficial channel and is the result of operations of social
forces at the workplace. It is also known as grapevine communication and acts as a supplement to the
formal communication.
The greatest danger of informal channels is that they can distort the information. If the administrators know
what type of informal channels are working in the organisation anti what sort of information is circulated, it
helps them in coordinating the affairs. Excessive dependence of the employees on informal channels is an
indicator of weak coordination in the organisation. Some times informal channels work to sabotage the
organisational purpose. To counter this danger, organisations have to develop openness in information sharing
and socialisation practices.
But often they play a very constructive role. For example, take the case of a person in an organisation who is
worried over a particular matter, but has no access to such information which will relieve hirn of his tension. In
such circumstances, the informal channels which have an access to that information will help the employees by
furnishing the information or by informing to higher ups about his genuine concern over the matter.

TYPES OF FORMAL CVOMMUNICATION NETWORKS (CHANNELS):

There are 6 types of formal communication networks or channels.

1. Chain
2. Star/Wheel
3. Circle
4. All channel/Completely connected
5. Inverted V
6. Inverted Y

Under the Chain network/ channel, the information and message flows only up or down in a hierarchical chain
of command i.e. it rigidly follows the formal chain of command in the organization

Under the Star /Wheel network/channel, the information and message flows among group members through a
leader (who acts as the central point). The group members do not communicate with each other directly but rely
in the leader as the central conduit. It is the most centralised type of formal communication network.

Under the Circle network, the group members interact with the adjoining members only i.e. the information is
transmitted laterally among the group members
Under the All Channel network, all members of a group actively communicate with each other freely. It is the
most decentralized type of formal communication network.

Under the Inverted V network, a subordinate communicates with his immediate superior as well as a second
superior. (superior's superior). However, the matters on which the information and message can be sent in the
second case (i.e. superior's superior) are limited and specified clearly
Under the Inverted Y network, two subordinates through the hierarchical chain communicate with a superior. In
turn, the superior communicates with two superiors who are above him. This network is less centralized than
the star network.

VERBAL AND NON VERBAL COMMUNICATION

Verbal is a form of communication in which the message is transmitted verbally ; communication is done by word
of mouth (Oral) or a piece of writing (Written)

Verbal
Communication

Oral Written
Communication Communicaton

ORAL AND WRITTEN COMMUNICATION

Oral communication is the process of communication in which messages or information is exchanged or
communicated within sender and receiver through the word of mouth. The various methods of oral communication
include face to face communication, interviews, telephonic conversation, etc Similarly, in case of groups, oral
communication can be carried out via meetings, conferences, presentations, etc
On the other hand, Written communication is the process of communication in which messages or information is
exchanged or communicated within sender and receiver through written form. For internal purposes, common
methods used are memos, reports, bulletins, e mails, etc. For external purposes, websites, e mails, advertisements,
etc are some common methods of written communication.

DIFFERENCES BETWEEN ORAL AND WRITTEN COMMUNICATION

EFFECTIVE WRITTEN LANGUAGE is ORAL LANGUAGE is
 Precise and direct.  A dynamic transfer of information.
 Chosen with greater deliberation and thought..  Everyday spoken language, including some
 More sophisticated, and developed. cultural expressions, such as “go crazy.”
 Less personal.  Able to engage the audience psychologically
 Driven by logic, organization, and and to use complex forms of non-verbal
explicitness communication.
 Achieved through sentence length, complex  Retractable (one can apologize for a mistake or
language style. offer clarification)
 Validated by author’s credibility.  Highly subjective
 Objective.  Spontaneous
 Non-retractable (it’s forever… and so are  Dependent upon orientation signals (for
mistakes and flaws). example, “Well, in the first place”), and
 Planned and deliberate. projection terms (for example, “It seems to
me”) to soften the tone
 Conversational and indirect

ADVANTAGES OF ORAL COMMUNICATION:

1. It is speedy
2. One can get immediate feedback
3. There is immediate clarification
4. It is most suitable in case of emergency
5. It less formal
6. There is a personal touch to it

DISADVANTAGES:
1. There is no record
2. It is dependent on the speaker's effectiveness
3. Limited human memory acts as a constraint

NON VERBAL COMMUNICATION

Peter F Drucker "The most important thing in communication is to hear what isn't being said"
It is defined as the sending and receiving of wordless messages. It includes gestures, body language, eye
contact, gestures, posture, tone or facial expressions. It is all about the body language of the speaker. It helps the
receiver in interpreting the messages received. Often, non verbal messages reflect the situation more
accurately than the verbal messages
Verbal and non verbal modes of communication are inter connected and often operate together in the
communication.
DOWNWARD, UPWARD AND LATERAL COMMUNICATON
Downward communication refers to the instructions and other official messages originating with the top
personnel of an organisation. These are transmitted from top to down through hierarchical set up and reach the
lowest ranking official in the chain.
'In large organisations, downward communication is difficult enough to begin with, because orders must
descend through numerous intermediate levels before the point of execution is reached. Misunderstandings can
easily occur when instructions pass through so many people. If little upward communication exists, the
difficulties are multiplied, because the orders themselves are apt to be unrealistic and are likely to meet with
worker's resistance.'

In upward communication, messages are passed by the lower levels in the hierarchy up to those heading the
organisation.
The upward reporting system is often of very limited use or value in finding fault. in the agency's operation
because some times the head of the agency may appear to be unbelievably blind as to what is really going on in
his agency; yet based on the reports he gets everything is fine: these reports simply do not present him with all
the facts.

Lateral communication may take place among officials of the same level in the hierarchy or among the
officials who are out of superior-subordinate relationship. It is also called Across communication. This type is
helpful in bringing together the related but different parts of the organisation. Assuring coordination of
organisational objectives, the officials of the organisation should communicate their plans and interactions to
one another clearly.

BARRIERS TO COMMUNICATION
There are certain factors which come in the way of smooth flow of communication process. With the result, the
communication becomes ineffective.
They are as follows:

1. Semantic barriers:
These barriers are concerned with language difficulties. These occur due to the differences in the
individual interpretations of words and symbols used in the process of communication.

2. Rigidity:
In a conversation, the meaning attached to various words and expressions vary from person to person.
Some people hold stray views on various matters. They hardly listen to other persons, in view of their
rigid stand on certain matters. This leads to ineffective communication. People have to develop the skill
of listening to others. They must have patience to accommodate the view points of others. This leads to
effective communication.

3. Ideological barriers:
The members of the organization do not share the same ideological perspectives and orientation.
Differences in background education and expectation result in different social and political views.
According to Pfiffner, these are probably the greatest handicaps to effective communication and
probably the most difficult to overcome.

4. Filtering:
It refers to sender's purposeful and deliberate manipulation of information to be passed on to the
receiver. The extent of filtering is determined mainly by the number of levels in the organisation's
structure. Thus, more the vertical levels in a hierarchy, the more scope for filtering and vice versa.

5. Generalisations:
Another factor which leads to ineffective communication is generalisation. If an aged person has had a
bad experience with some youth, he considers all youth as unruly. Similarly, if a person had read an
unimpressive poem written by a poet, he considers all that is written by that poet as unworthy. Such
feelings about persons and things in day to
day life act as stereotype ideas on one's personality. This leads to ineffective communication.

6. Dogmatism:
 This means that the attitudes, opinions and beliefs possessed by a person prevents him from accepting
accurate and additional information as it conflicts with the current situation.

7. Halo Effect
It is the result of two valued thinking. In this situation, we see things only as dichotomous i.e. good and
bad, right and wrong, etc. The problem here is that most situations are not dichotomous and therefore,
such thinking may oversimplify most real situations.

8. Stereotyping:
The content of the communication is determined by the expectations due to inadequate distinctions of
objects or events.

HOW TO MAKE COMMUNICATION EFFECTIVE?

There is need to overcome some of these limiting factors and make the communications effective. The
following suggestions are given for the purpose:

1. Communication should express the total needs of the organisation.

2. Communication is effective in a climate of mutual trust and confidence.
3. Communication should be treated as a continuing programme. It should not be equated with a brief
campaign
4. The purpose of communication and the person to whom it is directed should be very clear.
5. Communication should be both ways i.e., upward and downward
6. The language and line of communication should be very clear.
7. Communication should reflect the policies, programmes and practices of management.

More important than the above is the need for mutual understanding and respect and confidence and trust
between communicators. Only this will enable communication of personal feelings and real problems.

Millet has identified seven elements (principles) of effective communication. These are:
1. Clarity- Communication should be clearly and precisely stated
2. Consistency- information in the communication should be consistent with the expectations of the
receiver
3. Adequacy- information in the communication should be sufficient, neither too little nor over burdening
4. Timeliness- communication should be timely
5. Uniformity- communication should not be discriminatory
6. Flexibility- communication should not be rigid, either in form or character
7. Acceptability- communication should stimulate acceptance and positive response in the receiver

ROLE OF IT IN COMMUNICATION

How does technology affect communication?

Ever since the dawn of civilization, technology and communication have gone hand-in-hand. Ancient people
used to write on stone, which remained immobile. The invention of paper, and printing press spread the
communication over long distances. The ever evolving technology helped circulate the newspaper from one part
to another part of the world. The invention of the telephone, radio and television transformed the way people
communicate today. The invention of mobile phone made communication faster, less expensive and widely
available. Text messaging services has revolutionized the way we communicate. But it is the Internet for some
times now that has changed the way we communicate drastically.

The mass communication system has the power to provide information customized to gain benefits for the
owners. This can have a negative effect on people. The uncensored and obnoxious news items or television
programs can damage the morals of people, including the teens and youth. People are exposed to numerous
sources of communication. The Internet advertisements, television, newspaper, magazines, electronic
billboards, and other sources of communication have pervaded in our daily lives. Because of fast and easily
accessible communication people can expand and enhance their knowledge. But it can affect people’s lives too
if they receive the dark side of modern communication.

Workplaces have become more dynamic and active as employees and employers can use the information
technology to reduce costs, increase work efficiency and save valuable time to invest in other important venture.
Businesses, products, and services are globally accessible and connected by the Internet. People no longer need
to queue up for posting a mail in a post office, or sending telegrams. The Internet has increased the speed of
communication vastly and reduced the costs greatly.

The speed, convenience, and availability of modern technology are so overwhelming that it is easy to notice that
how does technology affect communication.
Technology evolves fast. It will continue to evolve and change. The methods of communication will move
forward as technology will be move on.

ADVANTAGES OF USING IT IN COMMUNICATION

1. Money and time can be saved as it is cheap as well as fast to move information around
2. Video conferencing saves time on flights/accomodation
3. It removes isolation and provides support systems to people who need it
4. It is available 24x7
5. It helps reduce red tapism/delays and corruption in the work processes

DISADVANTAGES OF IT IN COMMUNICATION
1. Loss of face to face communication often results in loss of personal touch
2. There is always an element of uncertainty regarding the authenticity of information
3. Virus, fraud, identity theft are other concerns