BUSINESS COMMUNICATION

BUSINESS COMMUNICATION
JYYOTHEES MV asst. professor source : google Page 1
Unit – 1
Concept of communication
Process of Communication – Communication Process
The most basic form of communication is a process in which two or more persons attempt to
consciously or unconsciously influence each other through the use of symbols or words to
satisfy their respective needs. The communication process is dynamic, continuous,
irreversible, and contextual. It is not possible to participate in any element of the
communication process without acknowledging the existence and functioning of the other
elements. The communication process goes through several phases. Here is a description of
those phases.
1. The sender has an idea
Difficult to think of someone “trying to make common,” to communicate, if that person has
nothing to share. The intent of this phase is to start the process at a time when a sender
intentionally decides to send a message to someone else. So, the sender has an idea.
2. The sender encodes the idea
Human beings are not a telepathic breed. They do not transmit pure ideas from one’s brain to
another. Human beings have learned to transmit symbols, representations of their ideas.
These symbols are varied. Throughout the world, humans use a multitude of symbols to
represent their ideas. Some symbols are linguistic (verbal or written) code developed into
complex languages. Languages are many: the Morse code, the Braille language, the
American Sign Language, and all the spoken and dead languages of the world. Other symbols
are also in use to communicate: mathematical formulas, paintings, pictographs, hieroglyphs,
traffic signals, zip codes, baseball gestures signalling instructions from managers to players.
3. The sender transmits the message
In order for the sender to transmit the encoded message, the sender has to choose a channel, a
medium through which to send the message. Senders can send information verbally or
nonverbally. In nonverbal communication, messages are sent through gestures, tone of voice,

use of space, etc. In verbal communication, messages are sent through speeches or through
documents. In all case, messages are sent through a variety of media such a telephones,
computers, papers, faxes, radios, videocassettes, DVDs, CDs, etc. Some channels are better
suited for some messages than others. A five-page memo is a poor choice for an invitation
to lunch
4. The receiver gets the message
Unless he or she has a hearing problem or he or she is affected by noises distorting the
reception of the message, the receiver receives the signal sent by the sender.
5. The receiver decodes the message
The receiver always decodes the message using his or her knowledge of the code used to
encode the message. A receiver with a poor knowledge of the language used will likely
decode the message poorly. A receiver trying to decode contradictory verbal and nonverbal
messages will likely decode the intended message incorrectly. The receiver chooses the code
he or she will use to decode the message..
6. The receiver send feedback to the sender
Using the same phases as the sender, the receiver send a message back to the sender
providing information on his or her level of comprehension of the message.
Noises or Barriers to Communication Process
Throughout the communication process, unintentional interference’s occur, distorting or
interrupting the process. These interference’s are called noises. Noises can be real noises,
auditory stimuli, like phones ringing, people talking, or street workers jack hammering.
Noises are also distractions like a streaker running across a stage during a commencement
address. Noises are distortions as well: static over a phone, solar flares altering a television’s
reception, or psychological illnesses modifying how people perceive the world.
Communication without noises has yet to happen. Therefore, recognizing the sources of noise
and attempting to minimize its effect is essential to improving the efficiency of one’s
communication.
Elements of the Communication Process
Communication is a dynamic process involving a series of actions and reactions with a view
to achieving a goal. How does it work? Think that you are in conversation with your friend.
You are a sender or communicator, formulate (encode) an idea or message as best as you can,
and pass on the message to your friend, who to the best of his ability receives or acts on the
message (decode). He responds by formulating his own message and communicates to you
(feedback)

Elements of the Communication Process
The six elements of communication process are sender, message, encoding, channel, receiver,
and decoding.
Communicator
(sender or encoder) is the one who initiates the communication process. He may be an editor,
a reporter, a filmmaker, a teacher, a writer, a speaker, a leader or anybody who takes the
initiative to start a dialogue. Before one speaks or writes, the message is conceptualized first
and then encoded. An effective communication depends on the communication skill,
knowledge level, and attitude of the communicator and how he desires to affect his receiver
Encoding is the formulation of messages in the communicator’s mind, that is,
the communicator not only translates his purpose (ideas, thoughts or information) into a
message but also decides on the medium to communicate his planned message. He must
choose the media (speaking, writing, signalling or gesturing) that the receiver can
comprehend well. For instance, an illiterate receiver will fail to understand a written message,
but can understand it well if told orally
A channel is the vehicle through which a message is carried from the communicator to the
receiver. The channels of communication are many-written, spoken, verbal, non-verbal, mass
media like TV, radio, newspapers, books, etc. choosing the appropriate channel, one most
suitable for the message as well as the receiver, is a complicated task. Success and failure of
communication depends on the selection of the right channel

The receiver, at the other end of the communication, is the recipient of the message and must
possess the same orientation as the communicator. If the receiver does not have the ability to
listen, to read, to think, he will not be able to receive and decode the messages in the manner
the communicator want him to. For effective communication, the receiver is the most
important link in the communication process.
Decoding is the interpretation of the message by the receiver. Actually, the receiver looks for
the meaning in the message, which is common to both the receiver and the communicator.
Feedback is the response or acknowledgement of receiver to the communicator’s message.
The exchange is possible only if the receiver responds. Even through fluttering eyelids,
raising an eyebrow, making a face, organizing a point and asking for explanation, the
message is shaped and reshaped by the communicator and the receiver until the meaning
becomes clear. In this way both participants in communication interact and constantly
exchange roles.
In face-to-face communication the receiver responds naturally, directly and immediately.
This provides the communicator an opportunity to improve and make his communication
effective. Feedback, thus, provides an opportunity to evaluate what is right or wrong about a
particular communication
Noise is an interruption that can creep in at any point of the communication process and make
it ineffective. Environment is one major cause that interferes with message reception: like
noises from the roadside, constant chattering of individuals outside the communication act,
blaring loudspeaker, faulty transmission, etc. noise can occur in other forms also; poor
handwriting, heavy accent or soft speech, communication in a poorly lit room, etc. in fact,
these are barriers to effective communication. For smooth and effective communication, it is
necessary to eliminate or reduce noise as far as possible.

13 Essential of an Effective Communication System | Business Management
(1) Clarity of Information:
Commenting on the ‘communication realism’ Terry says that first essential of effective
communication is to ‘inform yourself fully’. It implies that first of all the communicator must
be clear in his mind with the information he wants to communicate. Communication should
always be in common and easily understandable language so that it may not be
misunderstood by the persons receiving it.
(2) Adequacy of Message:
The message to be communicated should be adequate and complete in all respects since
incomplete information turns out to be dangerous from the viewpoint of business. The
adequacy of information being transmitted depends upon the intellectual capabilities of
parties concerned.
(3) Consistency of Message:
The message to be communicated should not be mutually conflicting rather it should be in
line with the overall objectives, policies, programmes and procedures of the organisation.
Self-contradictory messages always create chaos and confusion in the organisation which is
highly detrimental to the efficient running of the enterprise. If the message is amended from
the previous one, the fact should be clearly stated so that the chances of confusion can be
reduced.
(4) Feedback:
Feedback is an important method of ensuring effective communication. It refers to the
confirmation of the idea communicated whether the message has been understood by the
receiver in the same sense in which the sender makes or whether the recipient is agreed or
disagreed to the proposal of the communicator, makes it essential on the part of the sender to
confirm it from the receiver.
In case of face to face communication, it is easier to get feedback information observing the
emotions and expressions on the face of the receiver. But, for written communication, the
management should devise or evolve suitable means and ways for making communication
more effective.
(5) Understanding the Receiver:
Understanding is the main aim of communication. The communication must create proper
understanding in the mind of the receiver. Killian advised, “communicate with an awareness
of the total physical and human setting in which the information will be received.
Picture the place of work; determine the receptivity and understanding levels of the receivers;
be aware of social climate and customs, question the information’s timeliness. Ask what,

when and in which manner you would like to be communicated with if you were in a similar
environment and position.”
(6) Consultation:
It is generally desirable to consult others in planning communication. This will provide
additional insight and objectivity to the message. An important advantage of consultation will
be that those who have been taken into confidence while planning communication will lend
active support.
(7) Determine Medium:
After having decided the subject matter it should be determined as to how best this message
is to be communicated. All aspects of oral or written communication must be carefully
examined.
(8) Tone and Content:
The communicator must be careful about the language he uses while speaking or writing. His
tone, expression and emotion will have a definite impact on the effectiveness or otherwise of
what he is trying to communicate.
(9) Timing and Timeliness:
Proper attention should be given to the timing and timeliness of the communication. The
same message will be received or responded differently by different individuals and groups at
one time and differently by the same individuals and groups at different times.
Even in an emergency one dare not overlook the situational, psychological and technical
aspect of timing. Moreover, it is also necessary that information should be given in time as
out-of-date information is as bad as or worse than none at all.
(10) Support with Action:
It is highly necessary that the actions of the communicator should support his
communication. This is because action speaks louder than words. The most persuasive
communication, it should be noted, is not what one says but what one does.
(11) Listening:
A very important aspect of effective communication is that executives and supervisors should
be good listeners. It is dangerous to be inattentive or indifferent when others are attempting to
communicate. The ten commandments of American Management Association state:
“Listening is one of the most important, most difficult and most neglected Skills M
communications.
It demands that we concentrate not only on the explicit meanings another person is
expressing, but on the implicit meanings, unspoken words, and undertones that may be far

more significant. Thus, we must learn to listen with the inner ear if we are to know the inner
man. ”
(12) Environment of Trust and Confidence:
F.E. Fischer has pointed out that ‘communication grows best in a climate of trust and
confidence’. Every effort should, therefore, be made to win confidence by reporting facts
honestly. Employees need to be convinced and feel that the company is truthful and sincere in
its contacts.
Paul Arnold, President of Arnold Bakeries: “If your employee’s relation programme is a
sound one, if your intent is true, if your people believe in that intent, and in that truth, then
and only then you are successfully communicating.”
(13) Keeping the System Always Alive:
The system of communication should be kept open and alive all the year round. It is only by
honest attempts that good communication relations can be developed.
Formal Communication:
Meaning, Characteristics, Advantages Limitations and Types
Formal communication refers to interchange of information officially. The flow of
communication is controlled and is a deliberate effort. This makes it possible for the
information to reach the desired place without any hindrance, at a little cost and in a proper
way. This is also known as ‘Through Proper Channel Communication.’
Following are the chief characteristics of the formal communication:
(1) Written and Oral:
Formal communication can both be written and oral. Daily works are handled through oral
communication, while the policy matters require written communication.
(2) Formal Relations:
This communication is adopted among those employees where formal relations have been
established by the organisation. The sender and the receiver have some sort of organisational
relations.
(3) Prescribed Path:
The communication has to pass through a definite channel while moving from one person to
another. For example, to convey the feelings of a worker to the manager, the foreman’s help
has to be sought.

(4) Organisational Message:
This channel is concerned with the authorised organisational messages only and the personal
messages are out of its jurisdiction.
(5) Deliberate Effort:
This channel of communication is not established automatically but effort has to be made for
its creation. It is decided keeping in view the objectives of the organisation.
Advantages
The formal communication has the following advantages:
(1) Maintenance of Authority of the Officers:
Formal communication maintains constant relations among the superiors and the subordinates
as a result of whom the dignity of the line superiors is maintained. Consequently, it is
convenient to control the subordinates and fix their responsibility which is absolutely needed
for effective and successful control.
(2) Clear and Effective Communication:
In formal communication, there is a direct contact among the managers and the subordinates.
Both understand the capability, habits, feelings, etc. of one another. Managers know as to
when and under which conditions their subordinates need information. In this way, this
communication is capable of making available timely information. Hence, it is clear and
effective.
(3) Orderly Flow of Information:
The information has to pass through a definite route from one person to another. Hence, the
flow of information is systematic.
(4) Easy Knowledge of Source of Information:
In this type of communication, the source of each information can be easily located.
Limitations
Following are the disadvantages or limitations of the formal communication:
(1) Overload of Work:
In a modern business organisation much information, many messages and other things have
to be communicated. Under formal communication, they are routed through a definite
channel and this consumes much of the time of the superiors and thus some other important
works are left unattended.

(2) Distortion of Information:
This method can be a hindrance in the flow of information. Sometimes the distance between
the sender and the receiver is so big that the information has to pass through many hands and
by the time it reaches the receiver it is distorted. Thus it fails to serve its purpose.
(3) Indifferent Officers:
The officers do not pay much attention to the suggestions and complaints of the subordinates.
In such a case a subordinate may come lose his faith in the effectiveness of communication.
Types of Formal Communication
Formal communication is of two types:
(1) Vertical Communication:
(i) Downward Communication (ii) Upward Communication
(2) Horizontal Communication.:
(Downward Communication) (Horizontal Communication) (Upward Communication)
(1) Vertical Communication
Vertical communication is of the following two types:
(i) Downward Communication:
The communication by top hierarchy with their subordinates is called downward
communication. This communication includes orders, rules, information, policies,
instructions, etc. The chief advantage of the downward communication is that the
subordinates get useful timely information which helps them in their work performance,
(ii) Upward Communication:
This is quite the reverse of the downward communication. This flows from the subordinates
to the superiors. The subject-matter of this communication includes suggestions, reactions,
reports, complaints, etc. This sort of communication helps the superiors in taking decisions.
(2) Horizontal Communication
Horizontal communication takes place when two individuals of the same level exchange
information. Horizontal communication is used by the same level officers to solve the
problems of similar nature and profit by the experience of other people. The subject-matter of
horizontal communication includes information, requests, suggestions, mutual problems and
coordination-related information.

Formal Communication Network
The way in which formal communication is done, is known as formal communication
network. Formal communication can be done in different ways-it may be vertical
communication or horizontal communication. The different forms of formal communication
network have been shown in the following diagram:
(1) Chain Communication:
Chain communication refers to the communication between a superior and a subordinate. All
the people in an organisation from top to bottom are linked with the help of a scalar chain as
has been shown in diagram (1). A is placed at the highest rank, B is a subordinate of A, C is
the subordinate of B, D is the subordinate of C and E is the subordinate of D.
(2) Wheel Communication:
In this form of communication, all the subordinates of a superior talk to one another through
his medium. The superior works as a hub of a wheel. In the diagram (2), A is the superior and
B, C, D and E are the subordinates. All the four subordinates communicate through the
medium of A.
(3) Circular Communication:
This communication takes place among the members of a group. Every member of a group
can communicate with the nearest two members. In the diagram (3), A can have
communication with B and E. Similarly, B can have communication with A and C. The same
applies to all the members of the group. In this case the communication moves at a slow
speed.
(4) Free Flow Communication:
This form of communication also takes place among the different members of the group. Its
special feature is that every member of the group can talk to all the other people in the group.
This has been clarified in diagram (4). A can talk directly to B, C, D, E. In the same way B
can talk directly to A, C, D, and E. The same applies to all the members of the group. In this
case, the communication moves at a rapid pace.
(5) Inverted ‘V’ Communication:
In this form of communication, a subordinate is permitted to communicate with the boss of
his boss. In this form of communication the messages move at a rapid speed, fn the diagram
(5), C and D are the subordinate of B who, in turn, is a subordinate of A. Here C and D can
talk directly to A who happens to be the boss of B.

Informal Communication: Meaning, Characteristics, Advantages and Limitations
Informal communication refers to interchange of information unofficially. This
communication is based on informal relations (like friendship, membership of the same club,
the same place of birth, etc.) and, therefore, is free from all the organisational formalities.
Informal communication is also called grapevine communication because there is no definite
channel of communication. Under it some information passes through many individuals and
covers a long distance making its origin obscure. This is exactly like a grapevine where it is
difficult to find the beginning and the end.
Characteristics
Informal or grapevine communication has the following characteristics:
(1) Formation through Social Relations:
This communication is born out of social relations who mean that it is beyond the restrictions
of the organisation. No superior-subordinate relationship figures therein. A more sociable
superior can gather much information through this channel.
(2) Two types of Information:
Through this communication, information about the work and the individual can be collected.
(3) Uncertain Path:
Since it is beyond the restrictions of the organisation, it follows no definite channel. Like a
grapevine, it moves in a zigzag manner.
(4) Possibility of Rumour and Distortion:
Responsibility for the true or false nature of communication does not lie on any individual
and, therefore, not much attention is paid to its meaning while communicating. Consequently,
the rumours keep floating.
(5) Quick Relay:
Informal communication makes news spread like wildfire. Not only this, people start adding
something of their own which sometimes changes the real meaning of the communication.
Advantages
The informal channel of communication has the following advantages:
(1) Fast and Effective Communication:
Under this communication, the messages move fast and their effect is equally great on the
people.

(2) Free Environment:
Informal communication is done in a free environment. Free environment means that there is
no pressure of any office-big or small. The reactions of the employees can easily be collected.
(3) Better Human Relations:
Informal communication saves the employees from tension. Freedom from tension helps the
establishment of better human relations. This also affects the formal communication.
(4) Easy Solution of the Difficult Problems:
There are many problems which cannot be solved with the help of formal communication.
There is more freedom in informal communication which helps the solution of difficult
problems.
(5) Satisfying the Social Needs of the Workers:
Everybody wants good relations with the high officers at the place of his work. Such relations
give satisfaction to the employees and they feel proud. But this can be possible only with the
help of the informal communication.
Limitations
The defects or limitations of the informal communication are as under:
(1) Unsystematic Communication:
Under this, communication takes place through gesticulation, moving of head, smiling and by
remaining quiet. For example, a superior wants to complain against his subordinate to his
higher officer and at the same time he is afraid of giving it in writing. This can be conveyed
to the higher officer through informal communication, say during the course of a
conversation.
Characteristics
Informal or grapevine communication has the following characteristics:
(1) Formation through Social Relations:
This communication is born out of social relations who mean that it is beyond the restrictions
of the organisation. No superior-subordinate relationship figures therein. A more sociable
superior can gather much information through this channel.
(2) Two types of Information:
Through this communication, information about the work and the individual can be collected.

(3) Uncertain Path:
Since it is beyond the restrictions of the organisation, it follows no definite channel. Like a
grapevine, it moves in a zigzag manner.
(4) Possibility of Rumour and Distortion:
Responsibility for the true or false nature of communication does not lie on any individual
and, therefore, not much attention is paid to its meaning while communicating. Consequently,
the rumours keep floating.
(5) Quick Relay:
Informal communication makes news spread like wildfire. Not only this, people start adding
something of their own which sometimes changes the real meaning of the communication.
Advantages
The informal channel of communication has the following advantages:
(1) Fast and Effective Communication:
Under this communication, the messages move fast and their effect is equally great on the
people.
(2) Free Environment:
Informal communication is done in a free environment. Free environment means that there is
no pressure of any office-big or small. The reactions of the employees can easily be collected.
(3) Better Human Relations: Informal communication saves the employees from tension.
Freedom from tension helps the establishment of better human relations. This also affects the
formal communication.
(4) Easy Solution of the Difficult Problems:
There are many problems which cannot be solved with the help of formal communication.
There is more freedom in informal communication which helps the solution of difficult
problems.
(5) Satisfying the Social Needs of the Workers:
Everybody wants good relations with the high officers at the place of his work. Such relations
give satisfaction to the employees and they feel proud. But this can be possible only with the
help of the informal communication.

Limitations
The defects or limitations of the informal communication are as under:
(1) Unsystematic Communication:
This communication is absolutely unsystematic and it is not necessary that information
reaches the person concerned.
(2) Unreliable Information: Most of the information received through this communication
is undependable and no important decision can be taken on its basis.formation reaches the
person concerned.
(3) Unreliable Information:
Most of the information received through this communication is undependable and no
important decision can be taken on its basis.

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