Top Menu

Importance of Communication in Business


Everything you need to know about the Importance of communication in business organisation. “Communication is the flow of accurate information which people want need and are entitled to have for successful completion of the job.”

Importance of the concept of communication in management cannot be overemphasized. It is an established fact that one of the foundation stones upon which organisation rests is a system of communication.

The importance of communication includes:-


1. Efficient and Smooth Running of an Enterprise 2. Basis of Decision Making 3. Proper Planning and Coordination 4. For Higher Productivity at Minimum Cost 5. Morale Building 6. Democratic Management 7. Binds People Together 8. Creates Mutual Trust and Confidence

9. An Aid to Managerial Performance 10. Helps in Smooth Working 11. Increase Managerial Efficiency 12. Maintaining Industrial Peace 13. Aid to Leadership 14. Aid to Job Satisfaction 15. Saving of Time 16. Aid to Public Relation and a Few Others.

Importance of Communication in Business Organisation

Importance of Communication in Business Organisation – Efficient and Smooth Running of an Enterprise, Basis of Decision Making, Morale Building and a Few Others

Communication is one of the most important functions of management. It may cement an organisation or disrupt. It promotes managerial efficiency and induces the human elements in an organisation to develop a spirit of cooperation. It has become one of the most vital factors in the efficient performance of management.

1. Efficient and Smooth Running of an Enterprise:


The smooth and efficient functioning of an enterprise entirely depends upon the effectiveness of the system of communication. It is the very heart of the process of organising. It provides the necessary basis of direction and leadership. It actuates people to action in accordance with the desires of the management. Without proper communication, performance and achievements of the goals may not be possible. It is essential to secure cooperation between any two persons.

2. Basis of Decision Making:

Communication is the basis of decision making. It helps the management to take essential decision and conduct vital operations. The quality of decisions made in an organisation entirely depends on the amount and quality of information available to the management. The quality of information depends upon effective communication, and the quality of communication exercises considerable influence on the quality of decision making.

In the absence of effective communication it may not be possible for the top management to come in closer contacts with each other. Effective communication also helps in implementing the decisions of the management.


3. Proper Planning and Coordination:

Communication is very helpful in planning and coordinating the activities of business. If the system of communication is good, useful suggestions will come from the subordinates to the superiors. This would be helpful in the formation of plans. Participation of employees is now regarded essential for getting the task done, and this, can effectively be secured only through the media of communication.

4. For Higher Productivity at Minimum Cost:

Effective communication between employers and employees plays a vital role in obtaining maximum production with the minimum of cost. Communication provides necessary will to work Effective communication will make the employee feel more secure and more interested in his work. It will increase the understanding of the employees and secure their willing acceptance of the business plans.

It will increase the productivity on the part of workers. ‘For this, management has to sell ideas, motivate the workers to work with a will and build up high morale in the company. Communication, as an influence process, plays a vital role here. It becomes thus, a part of education, propaganda, leadership, and guidance function of the management.

5. Morale Building:

Communication in industry is the basis for morale building. Under an effective system of communication, it is quite convenient for the employees to bring their grievances to the notice of the management and get a proper adjustment. It creates mutual trust and faith, and that ultimately ensures job satisfaction amongst the employees, creates confidence in the ability of managers and promotes their loyalty towards the enterprise.

It satisfies their personal and social needs and stimulates their job interest and enthusiasm. ‘The result of good communication is increased efficiency as well as good morale. It is possible to have good morale without efficiency; it is not possible to have efficiency without good morale’.

6. Democratic Management:


Effective communication is the basis for democratic management. It ensures co-operation through understanding. The management has been forced to recognize the maintenance of sound system in democracy which necessitates understanding and support of workers. Adequacy and clarity of communication facilitates effective leadership and maintenance of man to man relationship.

7. Binds People Together:

Effective communication induces the human elements in an organisation to develop a spirit of cooperation and produces the will to do work before actually doing it. In this way, effective communication binds the people of an organisation together.

8. Creates Mutual Trust and Confidence:


Effective communication creates mutual trust and confidence between the management and the labour. It gives job satisfaction to the workers. It is essential for healthy industrial relations. Sharing ideas and experiences with workers eliminates their fears and misunderstanding and helps in winning over their trust and confidence.

Importance of Communication in Business Organisation – An Aid to Managerial Performance, Achieving Co-Ordination, Helps in Smooth Working and a Few Others

The implementation of policies and programmes of management is possible only through effective communication.

We can understand the importance of communication from the following:

1. An Aid to Managerial Performance:


A manager can take appropriate decisions with the help of communication. The problems may be solved without much difficulty by the manager. The manager can get things done by sub-ordinates through communication. He can impart the objectives of organisation to the subordinates through communication.

Thus, communication acts as a tool of management.

2. Achieving Co-Ordination:

A large-scale business organisation employs a large number of workers. They are working on the basis of division of work and specialisation. There is a need for co-ordination among such workers to attain organisation goals. The co­ordination is obtained through communication.

According to Mary Curling Nilen, “Good communications are essential to co-ordination. They are necessary upward, downward and sideways, through all the levels of authority and advice for the transmission, interpretation and adoption of policies, for the sharing of knowledge and information and for the more subtle needs of good morale and mutual understanding”.

3. Helps in Smooth Working:

Communication helps the workers to know the real situation prevailing in an organisation. Subsequently, workers perform their duties without any delay, which leads to the smooth functioning of an organisation. According to G. R. Terry, “communication serves as the lubricant fostering for the smooth operations of the management”.

4. Increase Managerial Efficiency:

Out of the total time available to the manager, the manager nearly spends 80% of his time in transmitting the information to others regarding the business targets, rules, programmes, policies, etc. Communication helps the manager discharge his duties systematically and facilitates him to increase his efficiency.

5. Helps in Decision-Making:


Good communication system provides all the necessary information, which enables the manager to take quality decisions in the proper time. Again, these decisions are communicated to those who are in need of them. According to Chester Barnard, “the first executive function is to develop and maintain a system of communication”.

6. Maintaining Industrial Peace:

The main reason for industrial unrest is lack of communication or improper communication. This creates a strained relationship between the management and the workers. Communication helps both management and workers to understand each other and facilitates industrial peace.

7. Aid to Leadership:

Management uses the communication as transmitter to forward its ideas, feelings, suggestions and decisions to the employees. In the same way, the employees express their responses, attitudes and problems through communication to the management. Under this two way communication, the management can assume itself as a leader of its employees.

8. Aid to Job Satisfaction:

If the employees know what would be done and for what purpose, they can perform in a better way and efficiently. Employees know the expectations of the management. If their performance is not up to the standard, they can improve it. Employees may wish to know how their performance is correlated with the achievement of objectives. These are possible through effective communication. If effective communication exists, employees can get job satisfaction.

9. Saving of Time:

Effective communication results in the saving of time. A manager can communicate easily to all his subordinates by sitting in his room. There is no need for the manager to meet all the sub-ordinates personally.

In turn, the manager can get all the information from his sub-ordinates. This results in the savings of time and effort for both of them.

10. Aid to Public Relation:


The term public includes customers, potential customers, shareholders, members of the public, state government, central government and the like. The management can create good image among the public through effective communication. In this way, the management can maintain better public relations.

Importance of Communication in Business Organisation – 10 Important Reasons Why Communication is Important

Communication is a process, by which human behaviour is modified and shaped for organisational purpose and good results are expected from the members of the organisation.

Communication is important because of the following reasons:

1. Communication is the basis of organisational functioning.

2. It facilitates effective planning.


3. It helps in proper decision making.

4. It facilitates coordination.

5. It improves superior-subordinate relationship.

6. Effective communication improves motivation and morale.

7. Effective communication helps in performing staffing functions properly.

8. It helps in creating good industrial relations.


9. Good communication leads to good public relations.

10. Communication facilitates delegation of authority.

In short, effective communication is an indispensable tool of management in modern business and plays a great role in creating an environment in which efforts can be coordinated to achieve organisational objectives.

Importance of Communication in Business Organisation – Acts as Basis of Coordination, Acts as Basis of Decision-Making, Establishes Effective Leadership and a Few Others

Managerial efficiency largely depends on manager’s ability to communicate with his/her superiors, subordinates and colleagues and all others directly or indirectly related to business. Communication is the foundation of all group activities.

Let us understand in detail the importance of communication in business organisation:

1. Acts as Basis of Coordination:

Communication acts as a basis of coordination among various departments, employees and the activities being performed in an organisation. Management uses communication to inform employees about the organisational goals, explain the modes of their achievement and establish inter-relationships between different individuals. The clarity of roles and activities to be performed enables coordination among all employees working in various departments.

2. Helps in Smooth Working of an Enterprise:

Communication is a very basic requirement for the smooth and unrestricted working of an enterprise right from its birth through its continuing life. Interactions among superiors and subordinates or amongst colleagues are possible only through communication. Only through communication channels, a manager can coordinate the human and physical resources into an efficient and active working unit that achieves common objectives.

3. Acts as Basis of Decision-Making:

Communication is the medium, which provides relevant information to managers and facilitates meaningful and right decision-making.

4. Increases Managerial Efficiency:

Effective communication is essential, for quick and effective performance of managerial functions. It is through communication, a management conveys the goals and targets, issues instructions, allocates jobs and responsibilities and looks after the performance of subordinates. The clarity in instructions enables subordinates to perform the assigned tasks efficiently and achieve organisational goals.

5. Promotes Cooperation and Industrial Peace:

The two-way communication promotes cooperation and mutual understanding between the management and workers. If management is able to communicate its expectations to its workforce with clarity and workforce is also able to express their concerns to the management it will promote better understanding between management and workforce leading to efficient operation.

6. Establishes Effective Leadership:

Effective communication skills are the key to effective leadership. It is through communication, a leader can direct his/her subordinates effectively and influence them to work in the benefit of the organisation.

7. Boosts Morale and Provides Motivation:

An efficient system of communication enables management to motivate, influence and satisfy the subordinates. Communication enables managers to understand needs and motives of his/her subordinates and assist them in adjusting to changes. The motivating work environment boosts employees’ morale and develops good human relationships within the organisation.

From above discussion, we can conclude that communication is the essence of an organisation. Without communication, it is impossible for an organisation to exist. Communication is the only channel to share information, pass on instructions, and discuss problems etc. between people working at all levels of management in an organisation.

Importance of Communication in Business Organisation – 13 Factors Indicating the Importance of Communication

The following factors indicate the importance of communication:

1. Communication Helps in Keeping the Employees Informed and Knowledge:

Informed and knowledge about the company’s problems, aims and objectives, policies, plans, targets etc. The company as well gets knowledge about the employee’s problems, difficulties, demands, likes, dislikes, interest, attitudes etc. This enables management to manage them properly.

2. Smooth, Stable and Efficient Functioning of the Business Organisation:

Business enterprise can run smoothly, be stable and efficient with the help of communication network only. Every employee knows his role very well, the employees become informed of the expectations of the organisation from them. This motivates them to give better performance towards it.

3. Communication Works as a Tool of Supervision:

It is through personal contacts or good communication that supervision of the subordinates is made. Next to personal observation is the communication system by which supervisors get report.

4. Quick Decision and its Implementation:

Communication helps executives to take quick decisions and implementation of the same can be done without any delay. The decisions, are based on factual and continuous flow of information through communication. It is possible to take correct and timely decision only in the event of continuous flow of factual information. The employees, also, are not hesitant in implementing such decisions.

5. Communication Develops Better Industrial Relations:

Because of communication system all the disputes conflicts grievances of employees can be avoided and even if they crop up, they can be solved as early as possible.

6. Communication Develops Better Understanding:

By communication system all types of misunderstandings can be removed and better understanding among the employees and management is developed.

7. Communication Develops Managerial Skill:

Communication facilitates executives to acquire more knowledge and share it with their subordinates. Communication itself is a learning process. All these ultimately results in developing managerial skill in all employees. Thus every member of the organisation accomplishes the assignment skillfully. One can find that the functioning of the organisation is going on scientifically and systematically.

8. Communication Binds Together the Working Group:

Communication is essentially a flux that binds the concerned individuals together in group activities.

9. Communication Ensures Unity, Co-Ordination, Co-Operation etc.:

Communication seeks to unify, coordinate and combine all the problems of the organisation. After solving the problems of the organisation, the attainment of predetermined objectives is possible only by coordination & cooperation.

10. Communication is a Tool of Motivation:

Communication is a fundamental tool of motivation which enhances morale of the employees.

11. Communication Ensures High Productivity at a Lower Cost:

Through communication, executives get new ideas, views, suggestions, from the workers, which ultimately are converted into higher production, the workers know their role very well by better understanding. Thus it helps in reducing the cost of production.

12. Communication Facilitates Sound Management:

With the help of planned communication network, management succeeds in establishing link between different management functions, for example planning, organising, coordinating, direction and control. That is why Peter has rightly said, “Good communication is the foundation of sound management.”

13. Communication Takes the Employees in Confidence:

Communication makes available all the information to all concern. The employees, therefore can share it this gives rise to the feeling of loyalty in employees. This is the way by which management takes the employees in confidence with the result that the targets are safely achieved.

Thus it becomes clear that communication is a management skill and it is an indispensable part of any management.

Importance of Communication in Business Organisation – With Significance

“Communication is the flow of accurate information which people want need and are entitled to have for successful completion of the job.” Importance of the concept of communication in management cannot be overemphasized. It is an established fact that one of the foundation stones upon which organisation rests is a system of communication.

Coordination is achieved, as is almost every human relationship, largely through communications. The necessity for effective communication in management has been widely recognized in recent years.

The importance of communication can be described as follows:

1. Smooth and Unrestricted Running of an Enterprise:

The smooth and unrestricted running of an enterprise depends in totally on an effective system of communication. In every big or small organisation in the public or private sector, ‘communication’ plays a major role, e.g., if you happen to enter in a bank or an insurance company, you will find all the clerk, and the persons busy with the disposal of some sort of ‘communication’.

In the manufacturing concerns instructions and information is being passed on continuously from one end to the other from a superior to his subordinate from the managing director to his executives.

2. Quick Decision and Implementation:

Communication helps the administration in arriving at vital decisions. Without communication it may not be possible for the top administrators to come in closer contact with each other and discuss the important problems pertaining to the organisation. In short, effective communication is the sine qua non for a quick and systematic implementation of the management decisions.

It is the basis of the direction and leadership. It lubricates the entire organisation and keeps the personnel working in accordance with the decisions of the top administration. The latter, through communication, conveys targets, issues instructions, allocates jobs and responsibilities and looks after the efficient performance of all activities.

3. Proper Planning and Coordination:

Communication also helps a let in planning and co-ordination. The widest possible participation in planning is a precondition for getting the task done, and this can be effectively secured only through the media of communication. To a large extent coordination depends upon proper and effective system of communication at all levels of management and in all areas of organisation.

According to Mary C. Niles, “Good communications are essential to co-ordination. They are necessary upward, downward and sideways through all the levels of authority and advice for the transmission, interpretation and adoption of policies for the sharing of knowledge and information and for the more subtle needs good morale and mutual understanding.”

4. Maximum Productivity with the Minimum of Cost:

Greater, better and cheaper production is the aim of all prudent management. Whatever may be the form of organisational Line, Staff or Line and Staffs today the information passed through a variety of filters and there is always a chance for its misinterpretation. Effective system of communication can play a vital role in avoiding illusion.

Further, maximisation of production is to be secured with the minimum of friction and utmost good faith on the part of the workers. The employees shall be told clearly what exactly to do and the way in which an instruction is to be carried out. In this process certain directions are to be given, certain feelings must be expressed and a certain amount of inter-personal perception must be exchanged.

For this, management has to sell ideas, motivate the workers to work with a will and build up high morale in the company, communication, as an influence process, plays a vital role here. It becomes, thus, a part of education, propaganda, leadership and guidance function of the management, says Shobhana Khandwala.

5. Morale-Building and Democratic Management:

Under an effective system of communication, it is quite convenient for the employees to express their grievances, if any, bring all their problems to the notice of the management and get proper adjustment. So it helps for morale- building and democratic management.

In India, most of the workers are illiterate who speaks different languages. Here effective communication has to play a special role. The device of communication has to be transplanted with great danger. The workers and all other concerned should be acquainted with the type of organisation and the prevailing system of communication.

So that we can expect its smooth functioning with productive results. In short, communication in management is very much important for quick decisions, proper planning and coordination, maximum productivity, smooth running of the enterprise and morale-building.

The Significance of Communication:

Transmission of new ideas could occur only through communication. It creates a climate that is propitious for the acceleration of change in the desired direction. Besides bringing about attitudinal and value change, communication could also impart knowledge of new skills and techniques. The cause for developmental use of communication has been convincingly argued by Dube (1975).

1. Communication helps to enlarge mental horizons.

2. It can be used to raise the levels of aspiration.

3. Through communication attention can be focused on problems having a bearing on the contemporary developmental context.

4. It can be effectively employed to build consensus on the new, economic and cultural goals and on the instrumentation of achieving them.

5. Through imaginative communication, experimentation can be encouraged and knowledge relating to their success and/or failure can be widely diffused.

According to Berlo, “Pressure to change others means pressures to influence others”. So they are identical with pressures to communicate. The great exponent of “Planning for Innovation”, Havelock (1969) has brought out the importance of communication in two of the ten functions in “System Governance”.

In coordination and facilitation, the emphasis on communication is dominant. Elsewhere he offers a word of caution to the communicator. Instead of confusing the listener with generalities or strange and esoteric concepts, according to him, the communicator should stick closely to specifics which have meaning in everyday experience of his audience. Translation from theory to practice requires help through communication. People these days are more interested in “Know-how” than in “Know-what”.

Importance of Communication in Business Organisation – With the Role of Communication

Effective communication is the foundation of sound management. The performance of all managerial functions depends on successful communication by the managers at various levels. Planning which is one of the most important functions of management requires extensive communication among the executives and other personnel.

Moreover, effective communication is important in executing a plan or a programme and then controlling the activities with the help of feedback information. Information about subordinates’ performance is necessary to determine whether the planned objectives are being realised. Communication is of utmost importance in organising.

It is an important aid in directing the employees of the organisation. In short, communication is quite indispensable for the management in getting the things done by other personnel in the organisation. That is why, Chester Barnard remarked, “The first executive function is to develop and maintain a system of communication.”

From the above discussion, we can say that communication is an indispensable process for effective management.

The role of communication is summarised in the following points:

(i) Better Planning – Communication improves the quality of planning. The management can receive suggestions and comments from the subordinates and also gather information from the external sources. This will ensure formulation of effective plans throughout the organisation.

(ii) Effective Operations – Communication helps the management in explaining the objectives, plans and policies of the enterprise to the employees. This enables the workers to understand their job responsibilities clearly and relate to the company’s objectives and plans. As a result, there will be effective implementation of company’s plans.

(iii) Decision-making – A manager can take better decision by collecting the necessary information from various sources, developing various alternatives and their systematic evaluation. The quality of decision depends upon the quality of information on which it is based.

(iv) Controlling – Communication helps in control by transmitting information about the performance of the subordinates to the manager. If the information received by the manager reveals that the performance of the subordinates is not up to the mark, he can take corrective action immediately.

(v) Coordination – The major requirement for achieving coordination is the presence of an effective communication system. Top management can communicate its policies, objectives, programmes, etc. to the lower levels and in turn receive reactions, suggestions and reports from the lower levels. This will help in integration of activities at various levels in the organisation.

(vi) Motivation – Communication can help in motivating the subordinates and getting their cooperation. A manager can motivate his subordinates by using appropriate words to commend their performance. Clear-cut instructions by a manager also help a great deal in motivating the subordinates.

(vii) Better Human Relations – Communication develops proper understanding between the superiors and the subordinates. It leads to congenial human relations in the organisation.

(viii) Workers’ Participation – Communication is an effective device for ensuring participation by the workers in the decision-making process. Management can consult the workers and receive their and suggestions before taking decisions.

(ix) Facilitation of Change – Communication facilitates change on the part of employees by sharing the necessary information about the change and securing their effective cooperation.

(x) Public Relations – Effective communication with the external groups such as shareholders, customers, suppliers, trade unions, press and government is very important for a modern business. It can build a good public image of the business.

Importance of Communication in Business Organisation – Improves Managerial Performance, Facilitates Exercise of Leadership, Binds Workers and Managers and a Few Others

(1) Improves Managerial Performance:

Communication enables the manager to secure information for decision-making, to diagnose the prob­lems faced by him and to decide on actions to be taken to solve them. It is through communication that he is enabled to plan properly, organize systematically, direct effectively and control meaningfully.

Communication enables the manager to inform his subordinates about the meaning and signifi­cance of aims and objectives of the organization. Again, it is communication that helps him give orders and instructions, assign tasks and responsibility, and secure willing and active co-operation of his subordinates.

Thus, whichever way one looks at it, communication stands out as an important tool in the process of management.

(2) Enables Understanding and Acceptance of Work:

It is an established fact that individuals can produce miracles if they are effectively motivated to treat the task assigned to them as a mission to accomplish. If they know what tasks they are to perform, and also that efficient and timely performance on their part would earn them and the organization something really valuable, they would invest all their energy and expertise in performing it. It is here, in creating understanding and acceptance of the work to be done, that communication becomes important.

(3) Facilitates Exercise of Leadership:

To be meaningful, communication has to be a two way process. If it helps the manager in transmitting ideas, and decisions to subordinates, it also enables subordinates to communicate their response and problems to the manager. In fact this is the essence of forging man-to-man relationship between a manager and his subordinates.

Thus, through an effective two-way communication the manager can assume the role of a leader, and his subordinates, that of able and willing followers.

(4) Binds Workers and Managers Together:

In any organization, different activities are performed at different work places. But all these activities need to be properly combined and coordinated to lead to accomplishment of organizational goals. However, this will be possible only if workers at all levels are kept fully informed about all the facts relating to their work. If they are not, they would only feel frustrated and discouraged. Thus, proper and effective communication acts as a cementing force in uniting the members of organization into a well-knit, well-directed team.

(5) Aid to Job Satisfaction:

Individual workers will perform better if they know what tasks they are supposed to perform and how and in what manner. They should also know where they stand in the organization framework and the nature of their relationship with others in the organization. If they have a clear idea of how efficient performance on their part would promote organizational objectives and what gains await them at the year-end, they would look at their task as a mission and perform excellently.

This will give workers enormous job satisfaction and the organization a formidable position amid competitors.

(6) Considerable Saving of Time and Effort:

Effective communication results in great saving of time and energy on the part of manager. He need not have face-to-face meeting with each individual worker to explain what tasks have been assigned to him and how and when these are to be performed. Sitting in his office, he can easily communicate his decisions to his staff—particularly in present times, when each worker has a mobile phone close to his ears.

The workers, on their part, can report on the progress of their work without having to meet respective superiors personally. So communication results in great saving of time and energy.

(7) Promotion of Public Relations:

It is only through communication—advertisements in newspapers, SMS, emails to present and poten­tial investors, present and prospective customers—that the owners and top management can inform all concerned about their present and planned activities.

Importance of Communication in Business Organisation – 9 Important Ways in which an Effective and Sound Communication Helps the Organisation

Communication is passing of information and understanding among different members of an enterprise and is of fundamental importance to all functions of management, since the performance of all managerial functions involves exchange of correct and meaningful information.

Moreover, every act of communication influences the organisation in one way or another. Communication is the lifeblood of an organisation and is vital for its survival. In fact, an organisation cannot exist without effective communication. In the words of J.M. Black, “sound communication is a master key to a company’s success”.

An effective and sound communication helps the organisation in the following ways:

Way # 1. It Facilitates Effective Planning:

Sound planning requires participation of all those who are concerned with decision making process and involves interaction and exchange of ideas, thoughts, opinions and views among them. Again, the plan cannot be effective and correct policies cannot be framed unless correct information and data are available.

Moreover the decisions made and policies framed by the management need to be covered to the subordinates for their compliances. All these activities involve and require effective communication; otherwise they cannot be performed successfully and effectively. The framing of a plan and its successful implementation depends on sound and effective communication.

Way # 2. Basis for Decision Making:

Proper decision making depends on availability of right and reliable information and data, identification of real problem and consideration of pros and cons of various courses of action available. This also involves interaction among the members of the organisation. It is through communication that the right information is available and other things can be considered for arriving at appropriate decisions. Communication plays an important role in decision making process.

Way # 3. Basis of Coordination:

In order to accomplish enterprise objectives, efforts of all the members need to be coordinated and integrated. It is through communication that this purpose can be achieved. It requires communication both downwards and upwards or even horizontally. Thus effective communication ensures coordination among different limbs of the organisation and is essential for smooth functioning of the organisation.

Way # 4. It Improves Superior-Subordinate Relationship:

An effective communication facilitates interaction among different members of the organisation, results in clear understanding of the problems and issues involved and Helps in finding the best way to get the work done to fulfil both individual and organisational goals. Thus communication helps in improving superior-subordinate relations by developing good human relations both formally and informally.

Way # 5. Improves Motivation and Morale:

A good communication is the foundation of high morale. A good sound communication between the members of the organisation helps in developing better human relations, eliciting willing cooperation of all to work towards realizing the organisational objectives and thus creating an environment suitable for all to work in. Good communication has a positive impact on employees’ morale.

Way # 6. Helps in Performing Properly Staffing Function:

Staffing function comprises recruiting, selecting, training and developing right type of persons for various positions. All these activities require exchange of lot of information sharing of views and experience. It also involves coaching and guidance which are not possible without proper communication.

Way # 7. Creates Good Industrial Relations:

Good communication leads to mutual understanding and helps in building better industrial relations between management and workers, thus making way for the growth and prosperity of the organisation as a whole.

Way # 8. Good Communication Leads to Good Public Relations:

Building good corporate image and keeping good and healthy relations with various agencies like the government, trade unions, customers, community and other agencies are important for the success of the enterprise. It is only through communication that good public relations can be maintained with them.

Way # 9. Increases Managerial Efficiency:

Communication is essential for quick and systematic performance of managerial functions. The management conveys through communication only the goals and targets, issues, instructions, allocate jobs and responsibilities and looks after performance of subordinates. As a matter of fact communication lubricates the entire organisation and keeps the organisation at work. In modern days the skill of communication has become a very essential quality of successful management.

Importance of Communication in Business Organisation – Helps in Achieving Co-Ordination, Helps in Smooth Working, Increased Managerial Efficiency and a Few Others

Communication is a process which transmits information to the target person or group. Without communication, no activity in the organisation or elsewhere will take place. Business organisations have recognised the importance of communication and it is increasing considerably.

The Hawthorne experiments made people realise that communication among persons working at different levels in a business concern is essential for achieving the objectives of a business. It is said that the world of modern management is the world of communication and the success of a manager in performing his duties depends on his ability to communicate. According to Paul Pigors and Myers, about 70% of an executive’s time is spent on communication.

Today, communication has become one of the important aspects of management and it helps the management in attaining the following:

Importance # 1. Helps in Achieving Co-Ordination:

Modern business firms which are organised on a large scale consist of a large number of workers working on the basis of division of labour and specialisation. To attain the goals of the business unit, there is need for co-ordination among workers and this can be achieved only through communication.

According to Mary Curling Niles, “Good communications are essential to co-ordination. They are necessary upward, downward and sideways, through all the levels of authority and advice for the transmission, interpretation and adoption of policies, for the sharing of knowledge and information and for the more subtle needs of good morale and mutual understanding.”

Importance # 2. Helps in Smooth Working:

Communication helps in the smooth running of an enterprise. To achieve the goals of an enterprise, co-operative action of the persons working in its different activities is necessary. Co-operative action in turn depends on the communication process prevailing in the organisation. Herbert G. Hicks has pointed out that “communication is basic to an organisation’s existence — from the birth of the organisation on through its continuing life. When communication stops, organised action comes to an end.” According to G.R. Terry, “communication serves as a lubricant fostering the smooth operations of the management.”

Importance # 3. Increased Managerial Efficiency:

It is said that about 75% of the manager’s time is spent on communication to others of business targets, rules, policies, etc. Communication helps the manager in performing his duties quickly and systematically and also facilitates in increasing his effectiveness.

Importance # 4. Helps in Decision-Making:

For taking decision by the management, and also for its effective implementation, a good communication system in the enterprise is a primary requirement. Information from different levels which helps the process of decision-making is received through the system of communication. Again, these decisions are passed on through communication to those who are involved in executing them. Chester Bernard has rightly stated that “the first executive function is to develop and maintain a system of communication.”

Importance # 5. Helps in Maintaining Industrial Peace:

Very often, lack of communication or improper communication may result in industrial disputes between management and workers. Communication helps both management and workers in putting forth their views to each other and thus it facilitates in maintaining industrial peace.

Importance # 6. Helps in Recruitment Process:

Communication is needed in the recruitment process to acquaint potential employees with the merits of working for the enterprise. The recruits are told about the company organisation structure, its policies and practices. After selecting the candidates for the jobs, communication is needed at the time of orientation to make candidates acquaint themselves with peers, superiors and with company rules and regulations.

Importance # 7. Helps Employees to Perform Effectively:

It is needed to enable the employees to perform their functions effectively. Employees are required to know their job relationship and importance to the overall operation. This knowledge makes it easy for them to identify themselves with the organisation’s mission. If a nurse in a hospital knows why she has to follow certain procedures with a patient and how this relates to the total therapy programme for him, it is much easier for her to develop an ideological commitment to the hospital.

Importance # 8. Helps to Acquaint Subordinates with their Evaluation:

Communication is needed to acquaint the subordinates with the evaluation of their contribution to enterprise activity. It is a matter of some motivational importance for the subordinates to know from their superior how they stand and what the future may hold for them. This appraisal if intelligently carried out will boost the morale of the subordinates.

Importance # 9. Helps in Teaching Employees about Personal Safety:

Communication is needed to teach employees about their personal safety on the job. This is essential to reduce accidents, to lower compensation, to minimise legal costs and to reduce recruitment and training costs for replacement.

Importance # 10. Helps in Projecting the Image of the Enterprise:

It is of vital importance in projecting the image of an enterprise in the community. The amount of support which the enterprise receives from its social environment is affected by the information which elite groups and the wider public have acquired about its goals, activities and accomplishments.

Importance # 11. Helps Manager in Performing his Functions:

Communication helps the manager in performing his managerial functions such as planning, organising, staffing, directing and controlling. Planning requires detailed communication among the managerial and other personnel.

Effective communication in important in executing a planned programme and also in controlling the activities with the help of feedback information. Information relating to subordinates’ performance is necessary to know whether planned objectives are being realised. Again, in the process of organising, communication plays an important role. It is also an important aid in directing and in motivating the employees. Thus, communication is an indispensable part of the management process.

From the above, we can state that a proper system of communication is essential for the existence and smooth running of an organisation. It may be noted here that in recent years, the importance of communication has been increasing due to certain factors such as increase in the size of organisations, growth of trade unions, technical improvements, emphasis on human relations in industry and increasing importance of social responsibilities of business. Alvin Dodd has rightly remarked that “the number one management problem today is communication.”

Importance of Communication in Business Organisation – Motivation, Promotes Cooperation, Decision Making, Smooth Working of Enterprise, Coordination and a Few Others

Communication is a pre-requisite for an organisation to exist. Communication is the basic pillar on which building of an organisation is made. All management functions including planning, organising, staffing, directing and controlling require communication. Moreover, through communication, coordination is established, people are motivated, changes are implemented, spirit of cooperation is created among people, etc.

In modern age, communication has more importance due to advent of modern tools of information and communication technology. Communication skills play an important role in judging personality and employability of a person.

For people working at higher levels in organisation, communication is of utmost importance as they spend most of their time in it.

Importance of communication can be understood from following points:

1. Motivation:

Communication helps managers to motivate the people properly with the use of effective channels. Managers can instruct the employees and appraise their performance properly, which can motivate them.

2. Promotes Cooperation:

Cooperation is the sense of working together to attain organisational goals. Through communication, the feeling of individual interest in the general interest is aroused which promotes cooperation. Cooperation between departmental heads is established only when they communicate.

3. Decision Making:

Decision making process involves collection of information, analysing it, taking the final decision and implementing it. Communication is required to collect information from various sources. Final decision is taken after the discussion with the related persons, which requires communication and finally to implement the decisions, they are communicated to the subordinates.

4. Smooth Working of Enterprise:

Communication is the pre-requisite for the idea of establishment of an enterprise. Various meetings are held, e.g., director’s meeting statutory meeting, Annual General Meeting (AGM), etc. these are accomplished through communication. Moreover, general operations of enterprise include transfer of orders from supervisors to subordinates on a daily basis, which requires communication.

5. Coordination:

In big organisations, work is structured on the principles of specialisation and division of work, which needs to be coordinated. Purchase managers need to coordinate with production manager, production manager needs to coordinate with sales manager, etc. This coordination is established with communication.

6. Leadership:

One can be an effective leader if he is followed. One can make others follow him only through the words he speaks. Good communication skills can help the managers to become effective leaders. In fact, it is non-sense to think of becoming a leader without effective communication.

7. Better Human Relations:

For maintaining peaceful environment in the organisation, the relations between people should be cordial. Good communication helps in establishing congenial/cohesive/good relations among supervisors, among subordinates and between superiors and subordinates, which aids in establishing and maintaining peaceful environment in organisation.

8. Public Relations:

In today’s competitive environment, it is necessary to maintain friendly relations with other stakeholders. Effective communication helps not only in establishing cordial human relations within the organisation but also outside the organisation i.e., with suppliers, customers, trade unions, public, government, etc. It also builds good corporate image.

9. Management of Change:

Generally, people oppose change but changes are inevitable. Employees accept the change, if they are told about the reasons and benefits of such changes and how these changes can be advantageous to them. This all is possible through effective communication.

10. Workers’ Participation:

Workers’ participate in decision making process by giving suggestions, telling the discrepancies, etc., which is possible through upward communication, a type of communication.

11. Proper Planning:

Managerial processes start with planning. Planning is a process of setting objectives, finding the alternatives, evaluating alternatives and selecting the best plan. All these tasks are possible after proper decision making by the experts which in turn requires communication. So, the need of communication is felt at the very first step of managerial process.

12. Directing Employees:

After the employees have been placed at the job, they need to be directed regarding their tasks, responsibilities, rules, etc. Supervisors are able to direct and supervise the subordinates through effective communication.

13. Training of Employees:

After the appointment of employees, they need to be trained because job characteristics differ from organisation to organisation. Employees also need training whenever there is a change in technology, equipment or machinery. In training, trainer gives complete knowledge about job to the trainee, which is possible through the proper communication between trainer and trainee.

14. Induction Programme:

Induction is the process of welcoming employees and introducing them to their job, work place, peers, etc. This task is done by personnel department or supervisor or both. Use of communication is made in all these tasks.

15. Starting of a Company:

Stages of starting a company are promotion, registration, commencement and share capital. A lot of communication is required at all these stages. At promotional stage, various meetings are held between promoters to decide various issues which require communication.

For registration and commencement, various legal requirements regarding Memorandum of Association, Articles of Association, prospectus, etc., have to be complied. This requires a lot of oral and written communication. At the time of issuing shares also, communication takes place between the company and the Registrar of Companies (ROC); company and public, etc.

16. Performance Appraisal:

The performance of employees should be continuously monitored and appraised. Good performance should be praised, recognised rewarded and bad performance should be checked improved. This recognition, praise, improvement can only happen with the help of communication between employee and supervisor.

17. Supervision of Work:

Supervisors supervise the work of the employees so that they can be guided whenever required and the mistakes can be rectified on real time basis. This supervision takes place through the conversation between supervisor and employee i.e., through communication.

18. Five Functions of Management:

Planning, organising, staffing, directing and controlling cannot be thought of without communication.

In all, each and every task we can think of requires communication.

, , ,

hit counter