Communication systems are the various processes, both formal and informal, by which information is passed between the managers and employees within a business, or between the business itself and outsiders. Communication—whether written, verbal, nonverbal, visual, or electronic—has a significant impact on the way business is conducted. The basic process of communication begins when a fact or idea is observed by one person. That person (the sender) may decide to translate the observation into a message, and then transmit the message through some communication medium to another person (the receiver). The receiver then must interpret the message and provide feedback to the sender indicating that the message has been understood and appropriate action taken.

The goal of any form of communication is to promote complete understanding of a message. But breakdowns in communication can occur at any step in the process. Business managers need to understand and eliminate the common obstacles that prevent effective communication. Some of the causes of communication problems in business settings include: differing expectations and perceptions; selectivity (the tendency for individuals to pick and choose what they retain when they receive a message from another person); and distractions (such as ringing telephones, scheduled meetings, and unfinished reports).

According to Herta A. Murphy and Herbert W. Hildebrandt in their book Effective Business Communications, good communication should be complete, concise, clear, concrete, correct, considerate, and courteous. More specifically, this means that communication should: answer basic questions like who, what, when, where; be relevant and not overly wordy; focus on the receiver and his or her interests; use specific facts and figures and active verbs; use a conversational tone for readability; include examples and visual aids when needed; be tactful and good natured; and be accurate and nondiscriminatory.

Unclear, inaccurate, or inconsiderate business communication can waste valuable time, alienate employees or customers, and destroy goodwill toward management or the overall business. "Your jobs, promotions, and professional reputation often depend on the success or failure of your written and oral communication," Murphy and Hildebrandt noted. "Especially if your career requires mainly mental rather than manual labor, your progress will be strongly influenced by how effectively you communicate your knowledge, proposals, and ideas to others who need or should receive them."


In the early years of corporate America, business managers operated on a strict basis of top-down communications. Whatever the boss or owner of the company said was the law. In most cases, strategies for doing everything from selling product to dealing with employees would be discussed behind closed doors. Once those decisions were made by managers, lower-level employees were expected to put them into effect. Employees had little input; they did as they were told or found work elsewhere. Such management attitudes, particularly when they applied to worker safety issues in such places as coal and steel mines, led to the growth of labor unions. If nothing else, unions had the power in many cases to slow or shut down production until management listened to demands.

In reaction to union demands, corporations eventually set up communication systems where rank and file members could speak their minds through union representatives. Although the unions provided the impetus for corporate managers to implement such systems, managers eventually realized that employees could have meaningful input into solving company problems. When presented with the opportunity to contribute, many employees jumped at the chance. This sort of feedback came to be called bottom-up communication.

In today's business environment, most corporations encourage employees to take an active role in the company. Employees who notice ways to improve production are encouraged, and usually rewarded, for passing those ideas on to managers. Employees who submit ideas that withstand intense study can be rewarded with a percentage of the savings to the company. Employees who are harassed on the job are strongly encouraged to report such harassment as far up the chain of management as necessary to stop it. Regular employee meetings are held where the lowest-level employee can stand up and ask the highest-level manager a direct question with the full expectation that a direct answer will be offered in return.

Business managers have also developed a method of monitoring how the company is running while meeting employees halfway. Sometimes called "management by walking around," this method of communication calls for top managers to get out of their offices and see what is happening at the level where the work is performed. Instead of simply reading reports from subordinates, business owners visit factories or service centers, observe employees on the job, and ask their opinions. Although the practice is both praised and denigrated regularly by business management experts, this form of communications does serve to keep the boss in touch.


Perhaps the most important part of business communication is taking the time to prepare an effective and understandable message. According to Murphy and Hildebrandt, the first step is to know the main purpose of the message. For example, a message to a supplier might have the purpose of obtaining a replacement for a defective part. The next step is to analyze the audience so that the message can be adapted to fit their views and needs. It may be helpful to picture the recipient and think about which areas of the message they might find positive or negative, interesting or boring, pleasing or displeasing. After that, the sender must choose the ideas to include and collect all the necessary facts. The next step involves organizing the message, since a poorly organized message will fail to elicit the required response. It may be helpful to prepare an outline beforehand, paying particular attention to the beginning and ending portions. Some examples of ways to organize messages include: a direct organization, which may be used for a request or to relate good news; or an indirect organization, which may be used to persuade or to relate bad news. Finally, before transmitting the message it is important to edit and proofread.


There are two main media used for communication: written and oral. "If your message requires an immediate answer, an oral channel may be the better choice," Murphy and Hildebrandt stated. "But if the message contains complicated details and figures or if its subject requires filing for future reference, a written communication is necessary." Written communication systems that might be used within a business include memos, reports, bulletins, job descriptions, posters, employee manuals, and electronic mail. Outside of the business, examples of written communication might include letters, reports, proposals, telegrams, faxes, postcards, contracts, advertisements, brochures, and news releases. Internally, business-people might communicate orally through staff meetings, personal discussions, presentations, telephone calls, or the informal employee grapevine. Oral communication with those outside of the business might take the form of face to face meetings, telephone calls, speeches, teleconferences, or videoconferences. In addition to written and oral communication, individuals may also communicate through nonverbal means. Each of these types of communication is described below.

WRITTEN COMMUNICATION Written communication is very common in business situations, so it is important for small business owners and managers to develop effective written communication skills. The basic principles of written communication are similar to those for overall communication, such as determining the purpose for writing, analyzing the audience, organizing the message, and proofreading. Since written communication does not usually receive immediate feedback, it is particularly important when using this medium to use simple words and short sentences, and to avoid technical jargon and cliches.

Some of the most important business uses of written communications involve persuading the receiver to take some action, such as invest funds in a small business or agree to purchase a product or service. Persuasive letters have a special organization. According to Murphy and Hildebrandt, they should:1) attract favorable attention from the reader; 2) arouse interest; 3) convince the reader and create desire; and 4) describe the action the reader should take. When the purpose of the letter is to make a sale, it is also important to include facts about the product and a clear central selling point. Above all, it is important that any type of written communication that originates from a business create or enhance goodwill.

ORAL COMMUNICATION Small business owners and managers are frequently called upon to make presentations, conduct interviews, or lead meetings, so oral communication skills are another important area for development. Presentations might be made to employees for training purposes, or to potential customers for sales purposes. In either case, good presentation techniques can generate interest and create confidence. Interviewing skills might be needed for hiring new employees, conducting performance appraisals, or doing market research. Meetings or conferences can be important tools for relating to employees or to interested parties outside of the organization in order to solve problems or set goals.

The same principles that apply to other forms of oral communication also apply to telephone calling. It is important to plan business calls by determining the purpose, considering the audience (including the best time to call), and deciding the ideas to be included and the questions to be asked. When answering the telephone in a business setting, it is important to answer promptly and to state your name and department in a clear, pleasant voice. Communication over the telephone can create impressions that are vital to small business success.

An often overlooked element of oral communication is listening. Good listening skills can be vital in finding a solution to grievances or even in making sales calls. Listening involves showing an interest in the speaker, concentrating on the message, and asking questions to ensure understanding. It helps to be prepared for the discussion, to avoid arguing or interrupting, to take notes as needed, and to summarize the speaker's statements.

NONVERBAL COMMUNICATION Nonverbal communication—such as facial expressions, gestures, posture, and tone of voice—can aid in the successful interpretation of a message. "Sometimes nonverbal messages contradict the verbal; often they express true feelings more accurately than the spoken or written language," Murphy and Hildebrandt noted. In fact, studies have shown that between 60 and 90 percent of a message's effect may come from nonverbal clues. Therefore, small business owners and managers should also be aware of the nonverbal clues in their own behavior and develop the skill of reading nonverbal forms of communication in the behavior of others.

There are three main elements of nonverbal communication: appearance, body language, and sound. The appearance of both the speaker and the surroundings are vital in oral communications, while the appearance of written communications can either convey importance or cause a letter to be thrown out as junk mail. Body language, and particularly facial expressions, can provide important information that may not be contained in the verbal portion of the communication. Finally, the tone, rate, and volume of a speaker's voice can convey different meanings, as can sounds like laughing, throat clearing, or humming.


Although the form and content of business communications has remained fairly constant in recent years, technology has improved the way management and employees keep in touch with each other. Almost all companies have some regular method of keeping in touch with employees through bulletin boards, newsletters, or magazines. Larger, more technically proficient and geographically spread out companies may also use corporate-produced television shows, interactive Internet sites, or copy-only messages transmitted by closed circuit television. Some companies distribute electronic mail (E-mail) newsletters or messages, which can be instantly transmitted and placed in every computer wired into the company's network.

Bulletin boards are one of the oldest forms of corporate communications. In the early days, bulletin boards were frequently the only communication that management had with employees. Everything from demands for longer hours to the announcement of new plant openings would be announced on the boards. Today, bulletin boards are not always found in businesses. Some companies use them for nothing more important than posting legal requirements such as wage and hour rates. Other companies try to make bulletin boards a force for employee recognition and information. The challenge all companies face with bulletin boards is that they fade in the consciousness of employees who get used to seeing them every day. Unless the information is changed regularly and presented in an attractive way, employees can ignore it.

Company newsletters and magazines try to address the inability of management to speak to each employee personally. These forms of written communication explain management policies, announce new products or initiatives, answer questions, and provide each employee with a reminder of what the company is all about. The increased availability and simplicity of desktop publishing systems has made newsletters and magazines an option even for small businesses.

In the meantime, closed-circuit, satellite, and videotape-based television have become popular with some larger corporations. Some corporations have spent millions of dollars in developing a television presence that would be difficult to distinguish from the quality produced by regular television networks. Television is immediate and can quickly grab the attention of employees. For example, a CEO who had to make an emergency announcement to employees could do so within minutes over a television system, while a newsletter or magazine takes weeks to produce.

The latest and fastest growing method of corporate communications is electronic mail. E-mail is instantaneous and is available to anyone with a computer terminal. E-mail can be customized to be sent to an individual or to a group of people with a common interest, such as the members of a committee or task force. It can help internally with scheduling, as well as with exposing managers to employee comments and complaints. E-mail can also be used to communicate with people external to the organization, as can other electronic tools like Internet home pages.


Informal methods of communication, such as rumors and "the company grapevine," can be outside of management's control. The grapevine is a bottomup form of communication in which employees try to understand what is happening around them when there is no official word from management. When management is silent, employees fill the void with guesses about what is happening. Although there is no way the grapevine can be stopped, it can be influenced. When dealing with questions that cannot, or should not, be answered, managers should take the initiative before negative rumors get started. If it is obvious to employees that the company will soon undergo major changes, for example, management should confirm that it will. Employees should be informed that management recognizes they have legitimate concerns, which will be addressed when possible. If official talk would damage the company, that should be made clear to the employees.


All forms of communication, even the lack of it, can have a significant impact on business dealings. A stiffly-worded, official-sounding memo to employees telling them not to talk to the press about impending litigation could be interpreted as admitting that the company did something wrong. Management's repeated "no comments" to employees and the press on a rumored merger may launch dozens of informal discussions about company suitors, how much the company will sell for, and how many employees will be laid off.

In order to avoid the negative effects of such scenarios, small business owners should make it a practice to communicate as much and as often as possible. They should think twice before eliminating the company newsletter as a cost saving measure, keep bulletin boards up-to-date, and hold meetings in which employees can ask questions of management. In addition, they should develop their skills so that all business communications are easily understandable. Management terms and jargon, stiff or flowery language may contribute to the impression among employees that management is talking down to them. It is also helpful to obtain and analyze feedback. Asking employees what they think of communication efforts, which methods are most effective, and whether they want more information can open valuable channels of communication.


Golen, Steven. Effective Business Communication. Washington, DC: U.S. Small Business Administration, 1989.

Murphy, Herta A., and Herbert W. Hildebrandt. Effective Business Communications. 6th ed. New York: McGraw-Hill, 1991.

Olkkonen, Rami, Henrikkie Tikkanen, and Kimmo Alajoutsijarvi. "The Role of Communication in Business Relationships and Networks." Management Decision. May-June 2000.

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haider ali bangash
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Aug 29, 2006 @ 1:01 am
A lot of information is available in this article. Being a student of ms chemistry i found it helpful for my business communication subject.

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