40 Important Types of Business Communication

Questions and Answers [With PDF]

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March 27, 2023

The 2nd chapter of our business communication learning course is “Types of Business
Communication.” 

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In this article, we’ll learn the 40 most important types of business communication
questions and their answers.

It will help you quickly learn about different types of business communication, their
advantages and disadvantages, their media, the differences between various types of
communication, and much more.

By reading this post, you can quickly get ready for business communication courses
as well as other competitive exams like vivas, job interviews, and school and college
exams.

So let’s get started.

Types of Business Communication Questions and Answers  

The 40 most important types of communication questions and answers are as follows:

Question 01: What are the types of business communications?

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Answer: The different types of business communication are as follows:

Formal communication
Informal communication
Internal Communication
External communication
Mass communication 
Promotional communication

Question 02: What is formal communication?

Answer: Communication that is done following the formalities of the organization’s pre-
established rules, policies, procedures, etc. is called “formal communication.” 

Formal communication can be organized within the organization or between external

parties.

Question 03: What are the advantages of formal communication?

Answer: Organizations gain the following benefits through formal communication:

Formal communication gets and keeps the sender and receiver’s attention and
makes them more aware.
Such communication acts as a permanent document and can be used in the future
when the news source needs it.
The interdependence of messages exchanged through formal communication is
high.
Since this communication is done using specific rules and procedures, the
information is authentic and the information is free from distortion.
As long as this communication is done according to the formal structure, the
transfer of information and responsibilities between the superiors and subordinates
is easy and beautiful, the activities can be done well with the external organizations,
and good relations are increased.

Question 04: What are the limitations of formal communication?

Answer: The limitations of formal communication are as follows:

Since formal communication has to follow the structure and rules of the
organization, many times the communication process is delayed, which wastes
time.
There is a lack of flexibility as this communication uses pre-defined methods.
Due to the formality of this type of communication, authoritarian behavior is
common, which can sometimes lead to negative reactions.
Due to the formalities involved, such communication often incurs unnecessary
expenses.

Question 05: What is informal communication?

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Answer: Informal communication, in which messages or information are exchanged
between two or more people or parties without following any predetermined rules, is
called “informal communication.” 

Informal communication can be organized between different parties inside or outside the
organization.

Question 06: What are the advantages of informal communication?

Answer: Organizations gain the following benefits through informal communication

Through informal communication, the right meaning can be given to the message
that was sent and received in a formal way.
When employees talk to each other informally, they can share their personal
thoughts, feelings, likes, and dislikes.
This type of communication has no set rules, so it can spread information quickly.
In this communication, it is possible to exchange information at any speed or with
anyone at any time.
Through this communication, quick results and feedback can be obtained.

Question 07: What are the limitations of informal communication?

Answer: The limitations of informal communication are as follows:

Informal communication may distort information or messages, leading to

misunderstandings.
Informal communication is not a good way to share sensitive or important
information because it doesn’t keep things private.
Due to a lack of a reliable communication medium, real information may be
exaggerated in informal communication and false information may be disseminated
or exchanged due to the distortion of real information.
In this type of communication, there is complexity in controlling messages or news
dissemination.
Most of the time, the information exchanged through this communication cannot be
used as a news source.

Question 08: What are the differences between formal and informal
communication?

Answer: The top five differences between formal and informal communication are as
follows:

Formal communication results in formal relationships among organization members.

On the other hand, informal communication results in informal relationships among
organizational members.
Formal communication follows official rules and regulations. On the other hand,
informal communication is done without formal rules or regulations.

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 There are well-defined methods of formal communication. On the other hand,
workers talk to each other informally when they commute to work together, play
together, travel together, or eat together.
Informal communication is used as an aid to formal communication. On the other
hand, informal communication is not supportive of formal communication.
Formal communication systems do not contribute significantly to establishing cordial
labor-management relations. On the other hand, informal communication is very
important in establishing cordial industrial relations.

Question 09: What is “internal communication”?

Answer: Internal communication is when one person in an organization talks to another

person in the same organization, or when employees of one department talk to
employees of another department about issues, policies, or how to achieve the
organization’s goals.

Question 10: What is the importance of internal communication?

Answer: In the complicated and competitive business world of today, internal

communication is becoming more and more important, especially in large businesses. 

Internal communication is important for the following reasons:

Effective internal communication makes it easy for a business to share important

information about plans, policies, and procedures with all levels of the organization.
Internal communication is critical in sending performance instructions from upper to
lower-level personnel.
Information or instructions sent in this process can be easily explained if necessary.
There is no other way to coordinate the work of all the departments and employees
in an organization so that the goals of the organization can be met.
By maintaining good relations with everyone, the organization’s cooperation can be
increased.
Because of this way of communicating, subordinates become more interested in
their work, which makes them more productive.

Question 11: What is the medium of internal communication?

Answer: The important medium of internal communication is as follows:

Memorandum
Instruction book
Telephone
Intercom
Interview
Conversation
Report
recommendation

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 Training Guide

Question 12: What is “external communication”?

Answer: Communication between a business organization and any party outside the
organization is called “external communication.” 

Business needs always require the organization to connect with various external parties
like buyers, consumers, investors, suppliers, etc.

Question 13: What is the importance of external communication?

Answer: Communication with the outside world is important for a business to do well and
achieve its goals. 

External communication is important for the following reasons:

External communication is necessary to inform various external parties about the

news of new products produced in the organization, news of new services, new
branches, vacancies, or contributions to the economy.
Organizations have to communicate externally with government departments such
as customs authorities, income tax, licensing authorities, etc. to protect their own
interests and legal obligations.
Maintaining business relationships by maintaining contact with suppliers,
distributors, retailers, buyers, consumers, etc.
Competition can be done through external communication with various
organizations that are directly or indirectly involved in business activities.
Various meetings, gatherings, seminars, conferences, etc. are organized to promote
and maintain a positive image of the organization.

Question 14: What is the medium of external communication?

Answer: The important medium of external communication is as follows:

Advertising and promotion

Use of mass media
Information delivery services
Free day and factory visit

Question 15: What are the differences between internal and external
communication?

Answer: The five important differences between internal and external communication are
as follows:

Internal communication is communication that takes place between parties internal

to the organization. On the other hand, external communication organizes
communication between parties external to the organization.

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 Internal communication is limited to parties within the organization. On the other
hand, external communication includes organizations that are not part of the
organization.
Internal communication can be vertical or parallel. On the other hand, there is no
such distinction in external communication.
The main objective of internal communication is to achieve the organization’s goals
and activities. On the other hand, the goal of communicating with people outside of
the organization is to build and keep good relationships with them.
Internal communication is carried out repeatedly on a daily basis. On the other
hand, external communication occurs only a small number of times.

Question 16: What does “horizontal communication” mean?

Answer: In general, the communication that takes place between people working at the
same rank in different departments of an organization is called “horizontal
communication.” 

Such communication is critical for mutual understanding and the coordination of

interdepartmental activities.

Question 17: What are the benefits or importance of horizontal communication?

Answer: The following are the advantages or importance of horizontal communication:

The horizontal communication process is done between equal-level officers or equal

departments where one party works through consultation and negotiation with the
other party. As a result, a good relationship develops between them.
Horizontal communication is crucial for different departments of a business to
coordinate its functions.
Horizontal communication is of immense importance in departmental
communication. Because this way, the organizational structure allows each
department to keep communicating with other departments in the way that works
best for them.
Communication can often lead to disagreements or misunderstandings between the
expert and the supervisor. Improved horizontal communication plays an effective
role in eliminating misunderstandings between them.
Horizontal communication has a special role in the normal dynamics of work.
Horizontal communication plays a very important role in preventing arbitrariness.

Question 18: What are the limitations of horizontal communication?

Answer: The limitations of horizontal communication are as follows:

Horizontal communication has a number of pros or requirements, but it also has a

number of cons or limits. It is described below

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 Although such communication processes are used to increase cooperation, in
practice, it is often seen that non-cooperation occurs between staff and
departments.
Parallel communication often fails due to hierarchical problems. One of the reasons
for this is the lack of good relations between two people of equal status.
Such communication delays decision-making due to procedural complexities.
Sometimes, the flow of information between different levels of an organization’s
structure gets messed up or stuck.
Horizontal communication is important for coordinating tasks, but organizational
structures at different levels and the process of breaking up tasks often make it hard
for people to talk to each other at the same time.

Question 19: What is vertical communication?

Answer: Communication happening between two or more people having different levels,
ranks, or designations can be defined as “vertical communication.”

Question 20: What is one-way communication?

Answer: Communication can be conducted in one-way or two-way operations. One-way

communication is when the sender or messenger delivers the message only to the
receiver. 

In this communication system, no response is expected from the customer.

Question 21: What is two-way communication?

Answer: Two-way communication is an integrated process of both upward and

downward communication. 

News, information, instructions, policies, etc. are sent from the higher level of
management to the lower level, and the lower level sends a reply to the higher level.

Question 22: What are the benefits or advantages of two-way communication?

Answer: Two-way communication is more convenient than any other form of

communication. This is explained below.

Can integrate both parties involved with two-way communication. As a result – a

quick and easy consensus is established between the sender and the receiver
which initiates better management of the organization.
This process helps in establishing smooth and dynamic communication by quickly
exchanging news, information, instructions, ideas, thoughts, etc. from the sender to
the receiver.
Two-way communication plays an effective role in employee motivation.
It especially helps in establishing and maintaining good relationships between the
management and labor force of the organization.

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 This process facilitates the elimination of misunderstandings between the
concerned parties through dialogue.

Question 23: What are the limitations of two-way communication?

Answer: Two-way communication has some limitations, which are as follows:

It is time-consuming and expensive.

It can make subordinates disobey, which goes against the rules and regulations of
the organization and makes the work environment unpleasant.
When information sent from high-level management to lower-level workers is sent
back to the sender, it can cause problems at many different levels of the
management structure.
This system makes it hard to send and receive important and urgent messages,
which slows down the pace of work.
The message sent in this process is often misinterpreted.

Question 24: What is grapevine communication?

Answer: Internal communication using informal channels is called “grapevine

communication.” As this communication is spread among different people at different
levels of the organization, it is called “grapevine communication.” 

In this case, it can be seen that one employee of the organization is exchanging
information or messages with another person without any hindrance.

Question 25: What are the benefits of grapevine communication?

Answer: The following are some benefits of grapevine communication:

Grapevine is a safe way to lighten the minds of employees by venting their

emotions.
Since this method doesn’t follow any rules, no one in the organization can be
blamed for the information given.
Coordination between them is easy as they can inquire about each other’s
happiness and sadness, good and bad, etc. through the grapevine. It benefits the
organization.
Through its proper use, employee morale increases.
They talk to each other about work or personal issues and get along well as a
result.

Question 26: What are the limitations of grapevine communication?

Answer: The following are some limitations of grapevine communication:

It is normal to distort information this way. As a result, it is not possible to achieve

the desired goal.

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 Through the grapevine, false and untrue information spreads quickly, which is bad
for the organization.
The information it sends is often not complete, which makes it hard for the person
receiving it to understand.
When information is served through such communication, it sometimes appears to
the recipient to be inaccurate. As a result, the information fails to achieve the target.
Lies and rumors spread through the grapevine so quickly that managers do not
have time or opportunity to take appropriate action after hearing them.

Question 27: What is upward communication?

Answer: Upward communication is the process by which news or information moves

from the lower level to the higher level. In other words, it is the way that employees at the
lower level of an organization talk to their bosses. 

Most of the time, this is how subordinates can tell their bosses their thoughts, ideas,
suggestions, recommendations, complaints, etc.

Question 28: What are the methods of upward communication?

Answer: The methods of upward communication are as follows:

Oral methods: Officer-employee meeting, joint objective setting meeting, grievance

redressal, direct telephone, feedback meeting, etc.
Written methods: Direct correspondence, reports, memos, suggestion and
complaint boxes, questionnaire filling, etc.
Other methods: Open door policy etc.

Question 29: What are the disadvantages of upward communication?

Answer: In addition to the advantages of upward communication, there are also several
disadvantages. 

Disadvantages include:

The main problem with communicating is that the information that subordinates give
to superiors is different and gets to them in different ways. 
Subordinate workers always want to be under the watchful eye of their bosses, so
they often make up information to make their bosses happy. 
This, while temporarily pleasing the authorities, is detrimental to the organization.
Most of the time, when people send messages or information to the authorities, it is
seen as a complaint. It discourages communication among employees.

Question 30: What is “downward communication”?

Answer: Communication that flows from top to bottom is called “downward

communication.” Through downward communication, the leader of an organization tells
his subordinates about any information, goals, policies, plans, or other decisions made by

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the organization.

Question 31: What is the objective of downward communication?

Answer: Downward communication is done in organizations for various reasons.

In downward communication, all of the employees in all of the different departments

are told to carry out all of the decisions made by the organization’s higher-ups.
All of the organization’s plans, policies, procedures, programs, and so on are shared
with the lower-level employees through downward communication.
Through downward communication, employees are appraised and informed about
their successes or failures. In this, employees get encouragement and motivation to
work.

Question 32: What are the methods of downward communication?

Answer: The methods of downward communication are as follows:

Oral methods: Face-to-face conversations, telephone messages, meetings,

conferences, lectures, etc.
Written methods: Letters, memos, policy notices, circulars, guidelines, etc.
Other methods: Radio, television, signs, graphs or images, etc.

Question 33: What are the limitations of downward communication?

Answer: In practical cases, several disadvantages of downward communication are

observed. Reasons for which outgoing communication may fail are discussed.

Downward communication can fail if subordinates do not take the information

seriously.
Due to various deviations in downward communication, the efficiency of employees
decreases. Due to this downward communication is sometimes not considered an
effective communication medium.
Many times the downward communication may be incomplete and unclear as a
result of which the subordinates may not understand the meaning of the message
or news correctly later on.
 Downward communication is one-way. If spontaneous outcomes are not
encouraged with this, the original purpose of communication may be defeated.
Downward communication is often ambiguous to the receiver. This is because
superiors often do not provide orders or explain policies in downward
communication. Consequently, such communication requires reinterpretation of
news or information.

Question 34: What are the differences between downward and upward
communication?

Answer: The differences between downward and upward communication are as follows: 

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 When communication flows from upper levels in the organizational structure to
lower levels, it is called “downward communication.” On the other hand,
communication from subordinates to superiors is called “upward communication.”
Downward communication speed is normal. On the other hand, upward
communication is not normal, totally reversed.
Downward communication is in the form of instructions to subordinates. On the
other hand, upward communication is the submission or complaint of subordinates
to superiors.
Downward communication is much more organized. On the other hand, the number
of upward communication is relatively less.

Question 35: What is mass communication?

Answer: Mass communication occurs when a sender, correspondent, or communicator

conveys information, news, an idea, or a decision to a large number of listeners at the
same time.

Question 36: What are the features of mass communication?

Answer: The important features of mass communication are as follows:

Wide and vast area

Heterogeneous audience
Professional communications
Absence of feedback
Intermediary channels

Question 37: What is the medium of mass communication?

Answer: The important medium of mass communication is as follows:

Printed material: Weekly, monthly, quarterly, etc. periodicals, daily newspapers,

books, pamphlets, leaflets, direct mail, billboards, etc. 
Audio-Visual Media: Radio, television, film, audio player, etc.
Verbal Mass Communication: Public meetings, group discussions, personal
communication, telephone, etc.
Printed and other visual media: Posters, movies, side boarding, neon signs, online,
etc.

Question 38: What are the objectives of mass communication?

Answer: A mass communicator mainly uses mass communication to achieve the

following objectives –

Achieving desired goals by influencing the opinions of others through publicizing

one’s opinion;
Building public opinion in the political sphere;

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 Advertising of goods and services aimed at keeping the economy healthy by
maintaining the pace of production and expanding distribution;
To keep the public informed about the movements of the country and abroad;
Creating a healthy social environment by spreading happiness among the people;
Expanding the scope of educational activities;
To build greater social connections by establishing relations between different tribes
or societies of the same country

Question 39: What is the importance of mass communication?

Answer: The importance of mass communication is as follows:

The influence of mass communication is observed in almost every aspect of society

today. Mass communication has made the distant closer and the near closer. As a
result, the entire world has become a human society today.
Mass communication is one of the tools of politics in today’s democratic era. It is
through mass communication that politicians shape public opinion, engage in
electoral warfare, and influence the voters through meetings and associations.
World leadership is influenced by mass communication. International mass
communication has made world politics more dynamic. Through this, coordination of
domestic and international politics has been achieved.
Modern business is the product of mass communication. This brought about a
radical change in trade. Traders can promote their products at low cost and, in a
short time, build close relationships with consumers; procure raw materials from
various sources at competitive prices, and take advantage of access to global
markets.
Business management also falls under mass communication in various ways.
Management uses mass communication in different ways to make sure the
organization runs well.

Question 40: What are interpersonal and intrapersonal communication?

Answer: 

Interpersonal communication:

Interpersonal communication is the communication between one person in an

organization and another person or persons.

Intrapersonal communication:

When any communication takes place between individuals, it is called intrapersonal

communication. In this case, a person himself acts as the sender and receiver.

By the end of this post, I hope you have a good understanding of the “Types of Business
Communication” chapter.

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You will understand the “Types of Business Communication” chapter better if you read
these 40 important questions and answers about it on a regular basis.

Don’t forget to leave a comment for us if you have any questions or if you would like to
find out more information.

You can also read:

30 Important Introduction to Business Communication Questions and

Answers [With PDF]

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