Introduction

“Communication leads to community, that is, to understanding, intimacy and mutual valuing.”
- Rollo May

Communication pervades all aspects of a human life whether it’s personal or professional. It is the
way through which one can have healthy and positive interactions and can build and maintain the
favorable relationships. The ability to communicate and make your message understood is vital in
today’s era. No matter how much the technology has become complex and advance with the passage
of time, moving from the use of postcard to emailing or video conferencing, the core principles of
communication continue to apply. Research over the years has established that the communication is
the most important ingredient for the success of business. Effective communication skill is ranked
highest among all the skills required to achieve success in business. A businessperson plays a part in
the process of the communication in different ways, such as while making customer aware about their
products, getting employees clear about their jobs, roles and responsibilities, informing the employees
about the mission, vision and strategies of the business, motivating the employees or collecting
information about the business and environment. In brief we can say that communication covers all
the spheres of business whether it is purchase, production, marketing, finance or human resource
management.

1. Origin and Meaning of Communication

Communication is the word originated from the latin word “Communis” and “Communicare” which
means “to make common” or “to share”. Thus, the meaning of communication can be derived as to
make common or to share facts, ideas, thoughts and requirement. Communication, therefore, is the
way of exchanging the messages, ideas, information etc via. speech, signals or writing. The need of
communication had been felt from the time the man exists. As time passed communication
transformed from different kinds of forms. Different channels of communication were used from time
to time. As the time passes new and improved vehicles of communications are identified for the
purpose of transmission.

For example, in the ancient times the kings used pigeons to exchange ideas and information and then
in the middle era postman were the channels of the transmissions and now in modern era there lots of
channels are available for the transmission of information i.e. mobile phones, fax, emails, video
conferencing, social media, social websites etc. A study of these channels of communication helps us
in understanding the process of business communication.

Before giving the definition of the communication, some questions need to be asked -.

• What is the importance of communication?

• Why should it be studied?
• Why should channels be analyzed and examined?
• What factors affects while you communicate?
• What are the issues involved in communication?

The importance of the communication can be understood from the fact that in our daily lives we
communicate with our family, friends, colleagues and even strangers. While we are playing, talking,
sitting, shopping in market, watching movie, performing our jobs or even while sleeping,
continuously we are forming and delivering messages. Man is a social animal who constantly interact
with others. While interacting he understands others and others also want to be understood. Man has
the ability to symbolize or communicate. Everyone is unique and how one communicates depends
upon one’s individual profile, demographic characteristics, experiences with life and educational
experience etc.

The questions raised above will be answered as we move on this journey of understanding Business
Communication and its related concepts.

3.1 Definition of Communication

understand the concepts in the terms of images and symbols. This ability of man helps him to The
different scholars define communication in their own ways. Some definitions of communication are as
follows:

3.1.1 According to Theo Haimann, “Communication is the process of passing information and
understanding from one person to another. .... It is the process of imparting ideas and making oneself
understood by others.”

3.1.2 In the words of Newman and Summer, “Communication is an exchange of facts, ideas,
opinions or emotions by two or more persons.”
3.1.3 As per Louis A. Allen, “Communication is the sum of all the things which a person does
when he wants to create understanding in the mind of another. It involves a continuous
process of telling, listening and understanding.”
Here also some key points regarding the communication:

i. Communication is about building relationship which involves developing understanding.

ii. Communication builds the relationship through establishing trust, which develops over a
period of time.
iii. Communication relates to the environment in which it occurs. The environment is
constantly changing so the communication changes and evolves over a period of time.

The fact of the life is that it’s every aspect whether its personal, social, political, business, religious,
national or international, involves the communication. So the business communication is the special
type of communication. In this module we will study the various aspects of the business
communication.

2. Business Communication

The form of communication undertaken by the business firms to fulfil the needs of the business is
known as Business communication.

4.1 Definition of Business Communication

4.1.1 According to R. Ludlow, “Business communication is a process of transfer of information

and understanding between different parts and the people of a business organization. It
consists of various modes and media involved in communication interchanges.”
4.1.2 In the words of Dr. Heinz Goldmann, “Effective communication needs to be built around
simple foundation and realization: communication is a dialog not a monologue. In fact,
communication is more concerned with a dual listening process.”

3. Goals of Business Communication

Business Communication cannot be effective until it fulfils the goals of the communication. As the
communication involves the two parties’ one is sender and the other is receiver. It is the responsibility
of the sender to achieve the four basic goals of the communication:

Organization Goodwill

Favorable Relationship

Receiver Response

Receiver Understanding
Adapted from Krizan, Merrier, Logan, Williams, Effective Business Communication

5.1 Receiver Understanding: The First and the most important goal of the business
communication is the Receiver Understanding. It is also the biggest challenge for achieving
the receiver understanding.

For example: Mr. Sharma messages to Mr. Saxena “Lets meet today to finalize the report on
monthly operations of West Delhi Zone”.
 The sender and the receiver might have different ideas about the location of the meeting and
confusion may prevail. So, it is required that a clear message should be developed. The
message must be so clear that the receiver understands the message in the same way as the
sender intended it to be understood by the receiver.
While developing the clear message the sender must consider the following issues:
• Receiver Characteristics
• Message form and content
• Receiver Feedback
• Communication Barrier

5.2 Receiver Response: Second and the most important objective of the communication is to
receive receiver’s response. The receiver’s response can be positive, negative or he may be
neutral towards it. The receiver can respond by words, actions or by both according to the
situation.

Example- In a class room teacher asks the students after explaining a concept, “ Is the
concept clear to all?” The students can respond by saying ‘yes’ or by shaking their head in
positive manner.

The reply of the receiver reveals the understanding of the receiver. So by the receiver’s
response we can know about the achievement of the first goal of the communication. The
message should be drafted in such a manner which encourages the receiver’s response. In the
oral communication the sender can directly ask some questions which shows receiver’s
understanding or can ask whether he gets the message or not? But in the written
communication the sender can encourage the receiver response by asking some questions or
by attaching a reply envelope

Example-Mr. Joseph is the chairperson of committee. He distributes a memo regarding the

date, time, venue and agenda of the meeting to be held shortly. In addition to this, for getting
the response of committee members, Mr. Joseph requests the people to notify the chair
whether the member will attend the meeting or not. This encourages the receiver response.

5.3 Favorable Relationship: The third goal of the communication is to build the favorable
relationship that can be achieved by focusing on the people involved in the process of the
communication. The sender and the receiver must relate to each other positively, personally and
professionally to build a strong business relationship. While communicating it is the first and
foremost responsibility of the sender to create and maintain a strong, favorable and healthy
relationship by focusing on the receiver interest and benefits and using the positive language.

5.4 Organizational Goodwill: The fourth goal of the communication is to build and maintain
the goodwill of the organization. The success of the business depends upon the goodwill of
the business. The more the goodwill of the company, the more it will be successful as the
investors invest in the company because of its reputation, suppliers attach with the company
due to its credit worthiness, customer buy from the company due to its brand reputation,
reasonable prices and promotions & quality of product. All these things build the goodwill of
the organization. So, it is the sender’s responsibility to increase and maintain the goodwill of
the company by ensuring that their communication reflects positively on quality of
company’s policy, product, services and personnel.
4. Importance of Business Communication

With the advancement of the technology the world shifted from the industrial era to information era.
The need of information flow for the success of business is as the flow of blood for the life.

The importance of the communication in the business can be understood after analyzing the following
points:

6.1 Basis of Managerial Function: Success of the managerial function depends upon the effective
communication. Managerial functions include Planning, Decision Making, Staffing, Directing,
Coordinating and Controlling. Communication becomes the basis for all. Planning is essential for the
growth of the business, which requires extensive communication between the executives and the
employees of the organization. On the basis of the available information the decisions are taken by the
management. In the big organization the work is divided among the units to focus on the
specialization of the employees. So, it is necessary to set coordination between the units for the
successful working of the organization. All this will be possible by the way of effective
communication.

6.2 Building & Maintaining Human Relations: Communication is the tool of building, maintaining
and developing the human relations. Through the communication one can change the attitude of
people, motivate them, cooperate with them. Through effective communication the disputes between
the employees or between the management and employees can be resolved.

6.3 Developing Positive Business Image: In today’s era building positive image is the biggest
challenge for the organization. Every organization has some responsibilities toward the government,
employees, shareholders, creditors, investors, customer, and society. By establishing the effective
communication system with all the parties, an organization can build the positive image in the
among all the stake holders of the business. But for positive image to sustain it has to be ensured that
communication is backed by suitable actions or results.

6.4 Promoting Industrial Peace: Two-way communication is an effective method for promoting the
industrial peace. In every organization there exist both kinds of communication, downward and
upward. With the help of the downward communication the management makes the employees
understand the goals, objectives, and the expectations of the management. On the other hand, by
upward communication the management can understand the problems faced by the employees and the
grievances of the employees, suggestions and the reactions of the employees.

6.5Building Relationship with Supplier: A healthy relationship with the supplier always helps the
business in maintaining the level and quality of the production. Through communication we provide
the information to the supplier about the requirement of the raw material, what kind of raw material
required, what are the conditions for the acceptance of the quality of raw material and receive the
information from the supplier about the prices, discount (cash/ trade) of the raw material and the
quantity available with the supplier etc.

6.6 Promoting the sale of Goods and Services: Through effective business communication, the
customers whether existing or potential are informed regarding the existing product/services or the
new product/services launched by the company, or new feature added by the company in the existing
offering, importance and the quality of the offering information about prices and promotions.
 6.7Reporting to Owner-shareholder: Shareholders are the persons who hold the shares of the
company and are known as the real owners of the company. As the real owners of the business they
are informed about the performance and health of the business through reports and other suitable
forms of communication.

5. Process of Business Communication

Communication cannot be effective unless and until a clear message is developed & delivered well,
received & decoded successfully and completely understood by the receiver. The process of
communication consists of the following steps:

Transmitting Message

Idea Encoding Channel/Medium

Decoding
Decoding Feedback Encoding Feedback

Sender’s Phase
Transmitting Feedback Receiver’s Phase

Process of Communication

Adapted from Kaul, A. Effective Business Communication.

7.1. Idea
Idea is the beginning of the process of communication. Every message either oral or written starts
with an idea. Idea is the thought originated in the mind of the receiver. The sender gives the shape
to the idea. Every idea refers to some context. Every business also has its internal and external
context of communication.

7.2 Sender
The person who begins the process of communication is known as the sender. When an idea
occurs in his mind, he encodes it and sends the idea to another person, institution, organisation to
achieve some specified objective. The sender uses his personal data bank from where he selects the
ideas and encodes the message and finally transmits to the receiver. As we know that the process
of communication starts with the sender so whole of the burden of the success of communication
and fulfilment of its objectives largely depends upon the sender. From selecting an idea to its
transmission large number of factors plays an important role, most important among them is the
understanding of the receiver and his needs. So while selecting a message and encoding it, the
sender must keep in mind the understanding capabilities of the receiver. Language used must also
be in accordance with the background of the receiver etc.

If the message is encoded in accordance with the needs and expectations of receiver, the level of
rejection reduces to its minimum.
Example-Lavanya (a consultancy) wishes to communicate with the manager of Human Resource
department of Sigma Sign Standard Life Insurance Company. The objective of the consultancy is
to secure its consultancy project regarding the training of its employees. The success of this
communication depends upon the answer of the following questions to the company such as why
should company pays attention to his proposal? Why should company spend extra on the training
of its personnel? So the consultant must adopt such a good strategy which explains its perspective
the proposal in accordance with the company specification.

7.3 Message
Message is the idea, emotion or the opinion encoded and transmitted by the sender. Or in simple
words we can say that message is the idea converted into text or word or picture or symbol for the
understanding of the receiver. The formation of the message is very crucial in the process of
communication. A single wrong appeal can make rejection of the message. So the selection of the
words and their ordering is very important. The idea must be ordered or sequenced in accordance
with the need of the receiver so that its significance is immediately grasped. The time when the
receiver of the message starts decoding the message, he starts listening, understanding and
responding to the message carefully.

7.4 Encoding
Encoding is the way of expressing the message. Encoding is the process in which the idea is
converted into the form of message which is understood by the receiver. Encoding can be done in
the form of words, pictures, symbols, multi- media etc. So encoding of the idea is very crucial step
in the process of communication and requires more attention of the sender. So the encoding is
done by keeping in mind the goals of communication earlier stated in this module.

7.5 Medium and Channel

Another important element of the communication is its medium / channel. The method or the
means by which the message is transferred from the sender to the receiver is known as the medium
/channel of the message. The medium of the message can be oral, written, verbal or non-verbal.
There is a slight difference in the medium and the channel of the communication. Let us take an
example: if the message is communicated via telephone then telephone is the channel of the
communication and oral message is the medium. If the message is deliver via a report (Published
or not published), then the report is the channel of the message and written message is the medium.
Before the formulation of the message, the medium of the message is decided as the rules and
regulations are applicable on each and every medium of communication.
Let us take another example, while using the oral medium one can be informal with the audience
but when we are using the written medium of communication we have to follow all principles of
communication as the text written in the document becomes the record and can be filed or used as
the evidence.

7.6 Receiver
Receiver is the person who receives the message encoded and transmitted by the sender. Actually
receiver is the person who decodes the sender’s message. A receiver can be individual or can be a
group. In his absence the process of communication cannot be completed because he is the
destination of the message. He can be a decoder, listener, reader or the viewer of the message. As
the selection of idea and its encoding in accordance with the needs and understanding receiver is
 the duty of the sender, the decoding of the message in the same terms as were intended by the
sender is the responsibility of the receiver.
The receiver must have the following responsibilities in the process of communication such as
• actively listens, views, reads the message of the sender,
• not make any perception about the message and sender before the message has been
properly decoded,
• Responds to the message.
In the previous example as soon as the manager of the Sigma Sign realizes the tangible benefits his
company can have from the proposal of the Lavanya Consultancy, he becomes more receptive and
starts reinforcing his interest in communication.

7.7 Decoding
The mental process through which the receiver extracts the meaning from the words, symbols,
pictures encoded by the sender in the message is known as decoding. Decoding shares the same
importance as the encoding in the process of communication. If the decoding is done perfectly
then the process of communication completes successfully.

7.8 Feedback
Most important element of the communication is the feedback. The process of communication is
incomplete without the feedback. Feedback is defined as the receiver response toward the message
forwarded by the sender. The feedback is the medium via which the sender comes to know
whether the message is understood by the receiver or not. Feedback informs the sender that how
the message is interpreted by the receiver. The effective communication is always responsive to
the feedback and continually amends his or her message as per the feedback received.

8 Summary
Communication is considered as the life blood of the organization. Through communication every
kind of details whether internal to or external to organization, is transmitted between the different
parties of the organization. Communication is the medium through which the details of the
mission, vision, goals, objectives, operations, strategies etc. are explained to the employees of the
organization. Through communication only the organization comes to acquire the information
about the opportunities offered by the markets and threats to the organization, the needs and wants
of the customers, the expectations and demands of the society and rules and regulations detailed
out by the government. So Communication is the most demanding skill in the today’s era. For
communication to be effective, all the steps in the process of communication should be properly
managed. So we can say that the communication is necessary for the efficient, smooth and
successful working of the organization.