Business communication: Definition, importance, and how to improve it

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Effective business communication involves exchanging information both within an organization and with individuals outside of it. This type of communication fosters interaction between employees and management to achieve common goals while streamlining organizational procedures and minimizing mistakes. To improve your business communication abilities, it’s essential to enhance your communication processes within and outside of your organization.

This blog aims to raise awareness about the importance of effective business communication and provide tips for improving communication skills and processes in the workplace.

Definition of Business Communication

Business Communication book published in 2004 as part of Harvard Business Essentials defined business communication as follows:

“No matter whether it is written or verbal, it is the instrument through which business speaks to its consumers. It is the mechanism by which management influences its employees and guides their activities. It is also the means by which the employees provide information and feedback, which are
necessary to the management to take smart decisions. Organizations which carry out clear, meaningful and effective communication with clients, employees, share-holders, creditors and the public have better chances of building reliable relationships and can count on good cooperation”
Business Communication (2004)

Some other definitions of business communications are –

Prof. J. Haste stated that when communication occurs between two or more business people for effective organization and administration of business, it is considered business communication.
Raymond Lesikar views business communication as a process or activity that enables individuals to collaborate and work together.
According to W.H., business communication is exchanging business-related views, ideas, and news among the related parties.
Ricks and Gow defined business communication as a system that affects change throughout the whole organization.

Types of business communication

Internal Business Communication	Anything that is sent from a subordinate to a manager or someone higher up the organizational hierarchy is considered to be this form of business communication.
Lateral Business Communication	Communication among coworkers in the workplace is referred to as lateral communication. This could be interdepartmental communication or even departmental business.
External Business Communication	Any communication that deals with clients, potential clients, vendors, or partners is considered external communication.

An organization uses various communication techniques, including face-to-face meetings, phone calls, text messages, and other conventional forms of writing. There are several forms of corporate communication to take into account, which might change your tone or substance.

Internal business communication

Internal business communication refers to communication between members of an organization. Both formal and informal communication are included in this conversation. Internal communication also includes many departments that communicate with employees through various channels. Internal communication should be effective since it is an important means of viewing and representing organizational concerns.

Effective internal business communication can boost employee job satisfaction, productivity, and efficiency while minimizing grievances and boosting revenues.

Lateral business communication

The importance of business communication between co-workers, whether verbal or written, is referred to as lateral or horizontal communication. This can involve inter-departmental communication or communication across departments, as well as communication between persons of the same or similar status within a corporation. This communication is essential to accomplish intended objectives.

As a result, this communication occurs among personnel with equivalent hierarchy levels. Horizontal or lateral communication is essential for seeking cooperation and mutual support to achieve the functional effectiveness of distinct organizational units.

External business communication

External business communication refers to interactions with people outside of the organization. These people can be clients, stockholders, suppliers, partners, regulatory organizations, etc. Email, ads, brochures, newsletters, content marketing, and other forms of external communication are common. External communication aims to facilitate communication among various organizations or entities.

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Roles of business communication

The effectiveness of corporate communications affects a company’s ability to succeed. Communication is considered the lifeblood of business because of this. Here’s how important effective communication is:

Top to bottom

Top-to-bottom communication is an organizational communication approach in which information flows from senior management.

When major business choices are taken at the highest levels, businesses require an efficient method of communicating the decision throughout the organization. As a result, many firms adopt top-to-bottom communication to guarantee that information flows freely from senior management to IC-level personnel.

When done correctly, top-to-bottom communication can be incredibly effective. At its best, it may break down silos and give team members the confidence they need to succeed in the organization. At worst, it can hinder production and push staff to conform to an excessively hierarchical organization.

Peer to peer

A lot of our daily work depends on having a good connection with our co-workers. Yes, having a good relationship with your boss is crucial, but some of us may go days without speaking to them.

Being able to successfully interact with our colleagues assists us in getting our duties done by answering questions, exchanging information, and providing feedback. Not to mention that excellent communication can increase workplace fun and vitality.

Bottom to top

It is an organizational communication strategy in which information is disseminated throughout the corporation from lower-level managers and team members. While bottom-up communication is not as prevalent as top-down communication, it can be incredibly effective.

It not only allows employees to contribute to higher-level decision-making, but also allows them to give feedback and have confidence that it will be forwarded to senior management.

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Why is business communication important?

The following points demonstrate the importance of business communication in an organization –

Democratization

Voices of otherwise minority populations are more equitably represented in organizations that contain democratic decision-making aspects. The strategy firms use in decision making is just as essential as the decision itself. Look for ways to enhance and foster a planning culture based on enterprise-wide information sharing and data-driven communication from top to bottom.

Boost motivation and morale

Business communication is critical in enhancing employee efficiency. Different plans and policies, essential issues, organizational goals, and so on are described to employees through communication, which improves their knowledge and makes them more efficient in performing their responsibilities.

To build a better relationship

Communication enables workers and management to express their thoughts and requirements. Healthy labor relations are critical to the success of any firm, and it helps sustain peace in this situation.

Job satisfaction

Effective, fair and easy communication improves mutual connection and understanding between employees and management. This contributes to higher satisfaction levels among employees who work hard to attain their objectives.

Higher productivity

Effective business communication boosts employee productivity by encouraging teamwork. It fosters an environment of trust and understanding among employers and employees. Cooperation with employees and understanding their wants and desires are required for effective communication.

Employees can complete their responsibilities more successfully and efficiently this way. Furthermore, excellent communication reduces the possibility of making mistakes during their task.

For efficient functioning of the business

Managers’ operational efficiency improves as a result of effective communication. With fair communication, managers can accomplish many managerial activities, such as planning, directing, organizing, controlling, and so on. Furthermore, effective leadership can take place if communication is effective. A proper and smooth company communication system is required for qualitative leadership actions.

Helps in decision making

Effective decisions necessitate current knowledge. Using good communication, managers can get information from various sources and use it to make sound decisions.

Proper planning

Organizations may develop excellent plans and policies through effective business communication. These strategies and policies must be based on accurate information. Managers must communicate policies and plans within the organization to implement or execute them on time. They can convey strategies and policies to internal and external stakeholders through effective communication.

Minimize conflicts

Different business parties can exchange information more smoothly with excellent communication. As a result, there are fewer conflicts, debates, and disagreements between them.

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Business communication channels

Business communication involves various methods and channels through which information is exchanged within an organization and with external stakeholders. Here are some common methods of business communication:

Email: Electronic messaging for formal written communication and document exchange within and outside the organization.
Face-to-face meetings: In-person gatherings facilitating direct communication, ideal for discussions, decision-making, and collaboration.
Video conferencing: Virtual face-to-face communication using technology, enabling real-time interaction for remote teams or clients.
Telephone/Conference calls: Voice-based communication over the phone, including conference calls for multi-participant discussions.
Instant messaging (IM): Real-time text-based communication for quick and informal exchanges within a team or organization.
Memoranda (Memos): Written documents conveying official announcements or updates for internal communication.
Reports and documentation: Formal creation of detailed documents for conveying information, analysis, or research findings.
Presentations: Communicating information using visual aids, such as slides, in person or virtually.
Social media: Utilizing online platforms for business communication, including customer engagement and brand promotion.
Intranet: Private network within an organization facilitating internal communication, document sharing, and collaboration.
Newsletters: Periodic publications offering updates and information to employees or external stakeholders.
Blogs: Corporate blogs for sharing insights, industry updates, and company news with a wider audience.

Choosing the appropriate method depends on factors such as the nature of the information, the audience, and the desired level of formality. Often, a combination of these methods is used to ensure effective and comprehensive business communication.

7C’s of an effective communication

1	Completeness
2	Conciseness
3	Consideration
4	Clarity
5	Concreteness
6	Courtesy
7	Correctness

Whatever field you operate in, you will need to interact professionally with others to close deals or work on projects. The seven C’s of effective communication assist you in increasing productivity and engagement by communicating messages that your audience can simply understand.

Completeness

It is necessary to communicate completely. The audience should receive all the information they require from it. The sender must take the receiver’s viewpoint into account and correctly relay the message. The following components are included in a thorough communication-

An organization’s reputation is built and enhanced by complete communication.
Additionally, they save money because no important data is lost, and if the transmission is successful, no additional expenses are needed.
Complete communication always offers extra details as required. It removes all uncertainty from the receiver’s mind.
The audience, readers, or message recipients can make better decisions because they have access to all necessary and pertinent information when there is complete communication.
It persuades the audience.

Conciseness

Conciseness implies wordiness, i.e. communicating what you want to say in the fewest words possible while maintaining the other C’s of communication. Effective communication necessitates conciseness. Here’s how concise communication helps-

It saves time while also saving money.
It emphasizes the core message while avoiding the use of unnecessary words.
Concise communication conveys a brief and important message to the audience in a minimum number of words.
A brief message is more enticing and understandable to the listener.
A brief message is not repeated.

Consideration

Consideration entails “putting oneself in the shoes of others.” Effective communication must include the audience’s opinions, background, mindset, education level, and so on. Make an effort to imagine your audience, their needs, emotions, and difficulties.

Make sure that the audience’s self-esteem and emotions are not jeopardized. Modify your message’s terms to meet the needs of the audience while keeping your it complete.

Clarity

When you are able to transmit your thoughts and opinions into the recipient’s mind, you know communication is effective. You don’t want the recipient to make assumptions or have a hazy understanding of what you’re expressing.

Only when they completely grasp your message will they be able to make the appropriate decision. It might occur when you employ plain and straightforward language to express your point to the recipient.

Concreteness

Concrete communication entails being specific and explicit rather than vague and generic. Concreteness boosts confidence. Simply delivering your message through statements and questions will not captivate your audience. It is important to back up your claims with appropriate facts, numbers, and statistics. Otherwise, your audience will not know whether your message is genuine or not.

Courtesy

Courtesy in a message indicates that the message should reflect the sender’s expression while also respecting the receiver. The sender should be honest, polite, prudent, contemplative, empathetic, and enthusiastic.

Correctness

Communication correctness implies that there are no grammatical errors in communication. Information correctness or factual accuracy is important in both verbal and nonverbal communication. You must choose the appropriate words at the right time while also ensuring that the information is reliable.

Etiquette of business communication

Business communication etiquette refers to the set of norms, conventions, and practices that govern how individuals interact and communicate in a professional setting. Following proper etiquette in business communication is essential for maintaining professionalism, fostering positive relationships, and ensuring effective communication. Here are some key aspects of business communication etiquette:

Clarity and conciseness: Be clear and concise in your communication. Avoid unnecessary jargon or overly complex language. Clearly express your ideas to ensure that your message is easily understood.
Professional tone: Maintain a professional and respectful tone in all written and verbal communication. Use formal language, and avoid slang or overly casual expressions, especially in written correspondence.
Grammar and spelling: Pay attention to grammar, punctuation, and spelling. Mistakes can undermine the credibility of your communication. Review and proofread your messages before sending them.
Timeliness: Respond to messages in a timely manner. Acknowledge receipt of emails promptly, and if a more detailed response is needed, communicate a realistic timeline for providing it.
Appropriate language: Use language that is appropriate for the context and audience. Avoid offensive or discriminatory language, and be mindful of cultural differences that may influence communication norms.
Professional greetings and sign-offs: Use appropriate greetings and sign-offs in emails and other written communication. “Dear,” “Sincerely,” and “Best regards” are common examples. Tailor your choice based on the formality of the communication.
Subject lines: Craft clear and relevant subject lines for emails. This helps recipients quickly understand the purpose of the message and prioritize their responses.
Respect for privacy: Respect the privacy of others. Avoid sharing sensitive or confidential information without proper authorization, and be mindful of data protection regulations.
Active listening: Practice active listening in verbal communication. Give your full attention, avoid interrupting, and ask clarifying questions to demonstrate understanding.
Professional formatting: Format written communication in a professional manner. Use standard fonts and formatting conventions, and ensure that the layout is visually appealing and easy to read.
Meeting etiquette: Be punctual for meetings, contribute meaningfully to discussions, and avoid dominating the conversation. Follow any established meeting protocols, such as raising your hand to speak.
Acknowledgment of receipt: Acknowledge receipt of important emails or messages, especially if they require further action. This helps reassure the sender that their communication was received.
Adaptability: Be adaptable to the communication preferences of others. Some individuals may prefer email, while others may prefer phone calls or in-person meetings. Respect these preferences when possible.

Business communication vs. Organizational communication

Business communication and organizational communication are related concepts, but they have distinct scopes and focuses within the broader field of communication studies. Here are the key differences between business communication and organizational communication:

	Business communication	Marketing communication
Scope	Primarily focuses on the communication processes and activities related to the business or commercial aspects of an organization. It encompasses interactions with external stakeholders (customers, clients, suppliers) as well as internal communication within the business context.	Encompasses a broader scope, addressing communication processes within the entire organization. It includes both business-related communication and internal communication that pertains to the overall functioning of the organization, including its culture, structure, and internal relationships.
Context	Often emphasizes communication related to specific business functions, such as marketing, sales, customer service, and external relations. It is more focused on achieving business goals and objectives.	Takes a holistic approach, considering communication in the context of the entire organization. This includes communication about organizational values, policies, and the overall work environment.
Purpose	Primarily geared towards achieving business objectives, such as promoting products, attracting customers, and ensuring efficient business operations.	Aims at fostering a positive organizational culture, enhancing employee engagement, and facilitating effective collaboration among members of the organization.
Internal vs. External focus	Includes both internal and external communication but may place a stronger emphasis on external communication to reach customers, clients, and other stakeholders.	Encompasses both internal communication among employees and external communication with various stakeholders but is broader in its consideration of the entire organizational context.
Interdisciplinary approach	Often integrates elements from marketing, public relations, and other business-related disciplines.	Takes a more interdisciplinary approach, incorporating insights from organizational behavior, management, sociology, and psychology to understand communication within the organizational context.

Business communication vs. Marketing communication

Business communication and marketing communication are two distinct but interconnected aspects of organizational communication. Here’s a comparison between the two:

	Business communication	Marketing communication
Purpose	The primary purpose is to facilitate the exchange of information within an organization and with external stakeholders to support business operations, collaboration, and decision-making.	Focuses on promoting a product, service, or brand to attract and engage customers, drive sales, and build brand awareness.
Audience	Involves communication among employees within the organization, as well as with external stakeholders such as clients, suppliers, and regulatory bodies.	Targets external audiences, including potential and existing customers, with the goal of influencing their purchasing decisions.
Scope	Encompasses a broad range of activities, including internal communication (within the organization) and external communication (with stakeholders).	Specifically focuses on external communication related to marketing and promotional activities.
Nature of content	Involves a variety of content, including memos, reports, emails, and meetings, aimed at facilitating organizational processes and information flow.	Emphasizes persuasive content, such as advertising, social media campaigns, and promotional materials, designed to create brand awareness and drive sales.
Tone and style	Typically uses a formal and professional tone, adhering to organizational norms and standards.	Adapts its tone to align with marketing objectives, often incorporating persuasive and creative elements to engage and attract the target audience.
Channels	Utilizes various channels such as email, meetings, reports, and internal communication platforms for efficient information exchange.	Leverages channels like advertising, social media, content marketing, and public relations to reach and engage external audiences.
Timing	Ongoing and continuous, responding to the day-to-day operational needs of the organization.	Often follows a strategic and campaign-driven schedule, aligning with product launches, promotions, or specific marketing initiatives.
Goals	Aims to facilitate internal processes, enhance collaboration, and ensure effective organizational functioning.	Aims to generate brand awareness, attract and retain customers, and drive sales and revenue.

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Communication barriers

We jeopardize ourselves and others when we fail to communicate properly, regardless of the mode of communication: spoken, nonverbal, written, listening, or visual. Apart from physical and technological hurdles, there are a few communication barriers that every employee and management should seek to eliminate.

Cultural differences

Understanding cultural differences in communication is critical. You must think globally; remember that in Japan, one’s surname comes before their given name. There may also be regional differences within the organization’s limits, and failing to appreciate cultural differences could insult someone.

Inability to listen to others

Active listening is a significant component of effective communication. You can’t engage with someone if you’re not listening to them because you’ll make assumptions about their needs based on your preconceptions rather than facts.

Lack of transparency and trust

When there is a lack of transparency and trust, it is difficult to express anything. For example, if your employees believe you are withholding something, they will be worried, and some will speculate, making it more difficult for them to absorb any attempt you make to communicate with them.

Communication style

Everyone has a unique style of communicating. Some people are quite straightforward, while others choose to be more oblique. Some employ specific facts, while others rely on broad strokes, and so on. Sometimes one individual is so entrenched in their communication style that they find it difficult to communicate with others who use a different style.

Conflicts in the workplace

Conflict can arise for a variety of causes, and when it happens, it impedes efficient communication. What is crucial is that you strive to resolve the issue, not the nature of the conflict. When disagreement is not resolved, it escalates, and individuals begin to take sides, making effective communication even more difficult.

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Examples of effective business communication

People communicate with one another to share ideas, express feelings and opinions and solve issues. Errors arise when communication is not delivered or received as planned. You may improve your communication abilities by practicing both verbal and nonverbal communication.

Nonverbal communication

Body language is another term for nonverbal communication. Nonverbal communication demonstrates to people that you are prepared to communicate effectively by maintaining eye contact, sitting attentively, and positioning your body to face the person speaking. Folding your arms across your chest, clenching your fists, and gazing downward indicate that you are distracted or uninterested, which might impede the conversation.

Be open-minded

Maintain an open mind to facilitate efficient conversation. Avoid placing judgment on or criticizing communicated messages. You do not have to agree with the other person’s beliefs and opinions, but you must respect them.

Active listening

Active listening allows you to gain a better grasp of the thoughts and feelings of another individual. To display this communication ability, concentrate your attention on the person speaking. Interrupting someone else’s speech might disrupt the flow of the conversation.

Compromise

It is important to compromise while you’re communicating with someone. When an issue arises, both persons must work cooperatively to develop a list of prospective solutions as well as agreed-upon trade-offs.

Problems that effective business communication can solve

Effective business communication is key to enhancing workplace efficiency, collaboration, and overall business success. Here are some common challenges it helps resolve:

Misunderstandings & confusion: Clear and precise communication reduces ambiguity, ensuring everyone is on the same page regarding tasks, expectations, and goals.
Low employee engagement & morale: Open communication fosters a positive work culture, making employees feel valued, heard, and motivated.
Workplace conflicts: Transparent dialogue and active listening help address misunderstandings before they escalate into bigger disputes.
Decreased productivity: Well-structured communication eliminates unnecessary back-and-forth, reducing delays and enhancing workflow efficiency.
Poor collaboration among teams: Strong communication bridges the gap between departments, ensuring seamless coordination and teamwork.
Customer dissatisfaction: Effective communication enhances customer interactions, leading to better service, stronger relationships, and increased brand loyalty.
Resistance to change: Clear messaging during organizational changes helps employees adapt, understand the benefits, and align with company goals.

By prioritizing effective business communication, organizations can overcome these challenges, fostering a more productive, engaged, and harmonious work environment.

10 essential tips to improve business communication

By refining the following skills, professionals can build stronger relationships, reduce misunderstandings, and drive business success.

Be clear & concise: Keep messages straightforward and avoid unnecessary jargon.
Know your audience: Tailor your communication style based on who you’re addressing.
Practice active listening: Focus on understanding rather than just responding.
Use the right medium: Choose email, calls, or meetings based on the urgency and complexity of the message.
Be professional yet approachable: Maintain a respectful tone while being open to collaboration.
Improve non-verbal communication: Use confident body language, eye contact, and facial expressions in meetings.
Master written communication: Proofread emails and reports to ensure clarity and professionalism.
Encourage open feedback: Create an environment where constructive feedback is welcomed.
Adapt to digital tools: Use platforms like Slack, Zoom, or Microsoft Teams to enhance communication efficiency.
Stay emotionally intelligent: Understand and manage emotions to communicate effectively in workplace scenarios.

Final word

Effective communication is crucial in assisting employees in forming a social circle or bond. Some firms have an open culture or work environment in which employees at all levels are free to speak with one another and with their supervisors. Other organizations prefer to communicate using a hierarchy or chain of command.

Effective business communication plays a significant role in providing a platform for the business to outperform its competition by building a healthy working environment. If you are looking to upskill yourself in any aspect in order to attract lucrative job opportunities, consider checking out the wide range of online MBA courses offered by prestigious universities on the Online Manipal platform and pave the way for a bright career.

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Key takeaways:

Sending and receiving effective communications within a corporation, organization, or business is referred to as business communication.
The goals of corporate communication are to build relationships, encourage learning, foster trust, and promote a favorable public image.
Business communication takes place internally, laterally or externally.
There are three possible directions for business communication: upstream, downward, or peer-to-peer.
Common communication hurdles might hinder or restrict business communication. Barriers to effective communication can skew a message or prevent someone from grasping its meaning.
A process that is constantly evolving through assessment, observation, and implementation change is business communication.