What is Communication and Why is it Important in an Organization?


By: Site Engineer, Staff

full bio

The functioning of organizations possible only because information can be transmitted from one person to another, from one section to another, and from one organization to another. The basis of this information flow is communication. Hence, communication is an essential process in the organization.

In any organization, the manager spends most of his time communicating with employees, customers, creditors, suppliers, etc. The effectiveness of the manager is largely dependent on his communication skills. It is important, therefore, that he understands the elements of communicating with employees, customers, creditors, suppliers, etc. The effectiveness of the manager is largely dependent on his communication skills. It is important, therefore, that he understands the elements of communication and acquires the necessary skills to enable him to communicate effectively.

What is Communication?

Communication can be defined as the transmission of information about an object or incident, between two or more persons. The information may be facts, opinions, ideas, attitudes or values, the meaning of which a person wants to share with another. The common forms in which information is expressed are written and spoken words, symbols, signs, codes, gestures and a variety of other languages.

The person who sends the information is called the sender or source, and the one who receives it is called the receiver. The means by which the information is transmitted is called the channel of communication. Some of the most frequently used channels of communication include face-to-face communication, letters, memos, telephone, radio, phonograph records, television, tapes, and video.

Communication Objectives

The source in a communication process typically has a purpose for transmitting to another, the information in his possession. The definition of communication earlier given implies that its purpose is to exchange meaning.

In other words, communication will be said to have occurred once the meaning intended by the source is received and understood by the person or persons to whom it is directed. However, the mere exchange of meaning, though important, is a limited view of the purpose of communication.

Usually, the purpose of transmitting information is not simply to exchange meaning but to influence the behavior of the recipient. Thus, a father may hope to influence the attitude of his teenage son towards alcohol by talking to him about it; or an advertising manager may attempt to persuade customers to purchase product ‘A’ rather than ‘B’ or ‘C’, by informing them of the unique qualities of product ‘A’.

Communication may also be used to reinforce or provide psychological support for a behavior already exhibited. For instance, advertisers usually attempt to reinforce the purchase behavior of customers by drawing their attention to the wisdom in the purchase they have just made.

Communication is not always a conscious activity. Unconscious gestures and facial expressions, the tone of voice and ‘body language’ may transmit ideas and attitudes. Even such communication has a purpose, whether or not the source is aware of it.

Unconscious communication is a very powerful means of conveying feelings and emotions about an object or event. A supervisor’s enthusiasm for welcoming a new operator to his section may communicate acceptance of the new employee. However, since organizations are goal-oriented, most communications in them are consciously directed towards achieving certain goals.

Communication effectiveness, therefore, is the extent to which the receiver responds to the communication effort in the time and manner desired by the source. To enhance the chances of the receiver responding in the desired manner, at least three conditions must be fulfilled.

The first is that the source must get the attention of the receiver. Since he can only attend to those messages which he becomes aware of, the message must be in a form that is capable of arresting and holding the attention of the receiver.

The second is that the receiver must be able to comprehend the message or information transmitted to him. Information transmitted in codes or language with which the receiver is not familiar is unlikely to be understood by him and therefore cannot inform or influence him.

Finally, the acceptance of the message is critical to the decision of the receiver to respond in the manner desired by the source. The message may be attended to and understood by the receiver, but if he fails to accept the import of the message, it is unlikely to influence his behavior. If the receiver’s attention, comprehension, and acceptance of the message can be assured, the likelihood of the communication process achieving its objective is enhanced.

The Communication Process

The simple model of communication process involves the source sends the encoded message through a medium such as face-to-face conversation, telephone conversation, a letter, bulletin board, a company handbook, etc, to the receiver.

Once the message is received through the channel by the receiver, he decodes it in order to extract its meaning. If the receiver is familiar with the codes used in the message, it is possible for him to share the thoughts or opinions of the source.

However, communication may fail due to errors or noise introduced at any stage of the communication process. For example, the receiver may be distracted during the reception of the message. The feedback process enables the source to check the accuracy and effectiveness of the communication. In this process, the receiver simply responds to the information transmitted.

This model of communication appears deceptively simple. Communication is, in fact, a dynamic process. People are constantly given and receiving information about themselves, about things, and about events around them.

Communication is also complex. Since human beings are by nature less complex, they complicate communication through their attitudes, perceptions, motives, orientations, and feelings. No communication effort can be devoid of the attitudes and perceptions of both the source and the receiver. In the same way, the physical and social environments introduce further complexity into the communication effort.

The Role of Communication in Organizations

Communication is very important for the organization and the entire worker in it. The organization is made up of various groups of workers assigned to perform different tasks. For the goals of the organization to be achieved, the efforts of the various individuals and work-groups must be coordinated and directed.

Communication is the means by which this essential activity in the organization is achieved. All the sections in a department, for example, maybe coordinated and directed by means of plans, budgets, and memos written by the departmental head, directing and instructing the sectional heads, and meetings in which information is shared about performances, goals, and constraints.

Communication is also important in decision-making in the organization. Decision-making is possible only because the information needed to make the decision can be obtained from their sources. Information is continually being generated at different points in the organization. Information about market conditions is generated and assembled by marketing research. The Quality Control Department, on its part, collects and organizes information about the quality of goods produced.

If the information were retained in each department that assembled it, no effective decisions could be taken by the management of the organization. Communication makes it possible for those who need particular types of information to have them for decision making. Effective decisions can be made only if relevant information flows to decision-making points at the appropriate time, and in a reliable manner.

In the same way, communication makes it possible for decision-makers to influence the behavior of others within the organization. It serves to command, instruct, persuade, influence, or guide the behavior of subordinates. For example, plans act as guides to the behavior of subordinates only when such plans are communicated to them. The Research and Development Manager of a business organization may transmit information about technological changes in maintenance costs, etc, to influence the behavior of the Purchasing Manager.

A supervisor may instruct his operator to inspect and keep the work station clear of all obstructions in order to avoid accidents. These examples illustrate how communication can affect the behavior of organization members in the direction required by management.

Communication is essential for control purposes. Control is possible only when information about performance is transmitted to the supervisor or superior officer. If the flow of information to higher levels is impeded or distorted, superior officers will not be aware of performance levels, and problems or constraints being experienced at lower levels. Consequently, they cannot take appropriate action to correct any deviations from set objectives and plans.

Communication is also essential to all other management functions. Delegation is possible only because there is communication between the manager and his subordinates. The functions of motivating, directing, leading, etc are carried on through communication processes.

Just as communication is essential to the internal processes of the organization, it is vital to the organization’s relationship with its relevant environment. Stimuli from the economic, technological, social, and legal environment must be processed by the organization, in order to maintain a satisfactory relationship with the environment. With the aid of communication, members of the organization define and monitor the environment, so as to determine and establish this relationship.

The acquisition of skills and attitudes needed for performance in the organization is possible because such skills and attitudes can be transmitted from one person to another. Orientation, indoctrination, and training in organizations are essentially communication processes by which knowledge, values, and attitudes are transmitted to new members of the organization.

Individual members of the organization are in constant need of information, to enable them to relate to the goals of the organization, to their superiors, peers, and subordinates. They always need to know how well they are performing, and how they can adjust their performance to ensure that they achieve personal satisfaction in the organization.

Communication is a vital process by which these needs of the individual can be met within the organization. Information about conditions of work, policies, procedures, and practices about advancement and discipline, rules and regulations about safety, care of equipment and use of facilities are communicated to employees in handbooks, manuals, and notice boards, to minimize conflict and enable them to participate satisfactorily in the organization.

It is generally believed that most of the problems in organizations are due to inadequate communication. Industrial actions by trade unions, ineffective decisions, and low morale of workers are usually attributed to inadequate communication. There is no doubt that more communication is better than less, provided that the cost does not exceed the expected benefits. More communication means that there is a greater amount of sharing of ideologies, goals, and attitudes among members of the organization. This enhances the cohesiveness of the organization and the probability that the intent of communication will be achieved.

Types of Communication

Communication in any organization may be classified in several ways. On the basis of direction or pattern of flow, it may be classified as downward, upward or lateral communication. On the basis of whether or not it follows the prescribed channel, communication may be characterized as formal or informal. Finally, we can distinguish between oral and written communication on the basis of mode of transmission. Each of these is briefly discussed hereunder.

1. Downward Communication

A typical organization is characterized by the arrangement of positions in a hierarchical form, with positions at the top having authority over those below. Communication from the top to the lower levels of the organization is called downward communication. It is utilized by those exercising authority over others to communicate goals, policies, procedures, and practices to guide the future behavior of subordinate personnel. Information about goals, policies, etc, usually originates as broad statements, which are translated into specific terms at each level of the hierarchy. Therefore, lower levels of the organizational hierarchy are able to understand policies and procedures as they affect them, and are able to relate to the overall goals of the organization.

Downward communication is also utilized to direct and instruct subordinate personnel about their jobs. The instructions and directions are usually specific and detailed. They are designed to clarify roles and establish the relationship of the role to other roles, the ultimate objective being to ensure a reliable job performance of all roles in the organization. Downward communication provides an opportunity for subordinates to receive feedback, from superiors, about how well they are performing their jobs. This is important because accurate and timely feedbacks have a motivational effect on employees.

The channels mostly utilized in downward communication are face-to-face discussions between superior and subordinate staff, letters and memos, telephone, bulletin boards, employees’ handbooks, manuals, reports, newsletters and house magazines. The choice of channel to be used depends on the type of information to be transmitted, the number of receivers and their location in the organizational hierarchy.

The major problem in downward communication is that of filtering. This is the practice whereby only a fraction of the information transmitted actually reaches its destination, as it passes from one level of the organizational hierarchy to another. The more the levels in the organizational hierarchy, the greater the amount of filtering that is likely to occur. Filtering is not necessarily bad. In fact, it is an important organizational process, for ensuring that only the relevant information needed for the effective functioning of a role is transmitted to it. However, it has obvious limitations, as vital information could be withheld through filtering, at great expense to the organization.

The issue of how much information a subordinate needs for adequate performance is a difficult decision for most managers. Managers may not be aware that certain information would be useful to subordinates. They may also restrict the flow of information to subordinates in order to maintain control, especially if they feel insecure. The problem of adequate information for subordinates’ performance can be rectified by feedback and joint problem-solving, both of which enable the information needs of subordinates to be satisfied.

2. Upward Communication

When information flows from the lower levels of the organizational hierarchy to higher levels, it is called upward communication. It is important in organizations because most planning, control, coordinating and motivation decisions are based primarily on information about activities, performance, and problems at lower levels of the organization.

Upward communication enables the manager to know the extent to which subordinates understand and act upon instructions and directives passed to them. It is a means by which employees participate in the development of policies and programs. Subordinates are not only able to influence decisions through upward communication; they also become committed to the implementation of the program.

Upward communication may take the form of reports on activities, performance or proposals, to solve identified problems. It may be in the form of a face-to-face conversation between a worker and his supervisor, a letter by which a proposal is submitted to management, or a telephone call requesting clarification of a previous directive. Meetings are also valuable channels for upward communication. These types of upward communication usually follow the formal channels. A performance report by a supervisor, for example, is submitted to the immediate boss, who subsequently relays it upwards. Suggestions and grievances are occasionally by-pass the formal channel of upward communication directly with managers.

Upward communication is not always a spontaneous activity of subordinate personnel. While the accepted role of the superior in the organization is to direct and instruct, most of the time, that of the subordinate is to listen and executive instructions and directives. This position of subordinates tends to inhibit upward communication.

Subordinates have some discretion on the type and amount of information that flows from them upwards. They are also conscious that information received from them is used for decision-making, such as performance appraisal and control. Subordinates are therefore motivated to transmit only information that would lead to decisions in their favor or information that the boss wants to bear. More information will, however, tend to be transmitted by the subordinate if the boss has alternative channels for the information.

Upward communication, like downward communication, is subject to filtering. As information is relayed upwards, it is summarized and condensed. The information that reaches the next level in the organizational hierarchy is what is considered to be the information needs of that level or a modified form of what was received.

3. Lateral Communication

Lateral communication, also known as horizontal communication, is information flow between people or peers at the same level in the organizational hierarchy. Communication between colleagues at the same level serves, not only to provide psychological support for individuals but also to facilitate coordination and problem-solving. Vital background information for decision-making is provided during lateral communication, and operational problems clarified as new insights are furnished by colleagues.

Lateral communication is mostly informal. However, committees, task forces, and coordination meetings are formal media for lateral communication. Letters and memos, the telephone, requisition forms, and job orders are other media of lateral communication.

Due to the informational nature of a great proportion of lateral communication, it is heavily influenced by such factors as status, the opportunity to interact, and cohesiveness. People of similar status tend to communicate more, and cohesiveness increase communication. However, in spite of these, lateral communication will be small, if there is no opportunity to interact. Lack of opportunity to interact creates physical and psychological distance between colleagues and reduces communication between them. Lounges, coffee rooms, staff clubs, and other common facilities provide opportunities for interaction and lateral communication.

4. Formal Communication

The organization may be looked upon as a system of communication channels. The organization is tied together by a series of communication links. The communication network is consciously and deliberately established, to link all persons and groups for the purpose of collecting, analyzing and disseminating information in the organization. Communication that takes place along these prescribed channels is called formal communication. Most upward and downward communication, as well as some lateral communication, are formal.

Formal communication channels restrict the types and flow of information among members of the organization, to what is considered necessary for effective performance. Thus, certain reports are communicated to some individuals, and not to others. The problem, however, is that of determining the information needs of others. What may be thought to be unnecessary information may, in fact, provide a clue to the doubts and uncertainties of a subordinate. While a free flow of information in the organization would be costly and tend to waste the time of people wading through irrelevant information, the conscious effort ought to be made by management to expand formal communication channels. This can be achieved by developing a climate of trust and openness in the organization.

5. Informal Communication

Informal communication takes place outside formal channels. It is also sometimes called the ‘grapevine.’ As we have seen, formal communication does not usually provide all the information that an individual needs in the organization. Informal communication fills in the gap. Directives and policy statements of management may be clarified through informal discussions with colleagues. Apart from task-oriented communication, informal groups are held together through informal communication. Personal information, gossips, and rumors are circulated through the informal communication process.

Informal communication may be useful in the organization when it supplements the formal communication channels and enhances cohesiveness. It may also be used by management to quickly circulate information that is beneficial to the organization but cannot be passed around through formal channels. Informal communication may, however, have damaging effects on the organization. Wild rumors and malicious gossips quickly filter through the organization before it can be curtailed. It is futile to attempt to stamp out informal communication from the organization. What can be done is to attempt to utilize it constructively.

Barriers to Effective Communication in Organizations

Effectiveness of the communication has been defined to include, not only the exchange of meaning between two or more people but also a response by the receiver in the manner and time desired by the source.

The outcome of effective communication is a change in attitude or behavior of the receiver, in the direction desired by the source. A manager’s communication with his subordinates over punctuality would be considered effective only if it resulted in a greater rate of punctuality than hitherto.

An expanded model of communication shows the extent to which the receiver’s behavior follows the communication effectiveness. The greater the coincidence, the more effective the communication has been; while the greater the divergence, the less effective it has been.

Barriers to effective communication can be experienced at any stage in the communication process, that is, the source, channel or receiver. The source plays a very important role in ensuring communication effectiveness.

In communicating an idea or opinion, the source selects the language or set of symbols, determines the structure of the message, the channel in which it is to be directed. The source must take the needs, experience, and characteristics of the receiver into consideration in selecting the language, and in making the other communication decisions.

Poor selection of words and clumsy message structure can frustrate the communication effort. Many words have several shades of meaning, and the actual meaning intended can only be known from the context of the message. Failure to provide an adequate context, unwarranted assumptions in the message, and inadequate knowledge of the assumptions underlying the message, may mar communication.

Inconsistency of the message with the channel used may also lead to a communication failure. A new policy that is communicated to employees through the company’s newsletter or bulletin, for instance, may lead to doubts and requests for clarification. Furthermore, there is no guarantee that those who will actually implement the policy will notice it in the newsletter.

The number of links in the communication channel between the source and the receiver could result in delays, and provide avenues for noise to be introduced into the communication process. Communication becomes affected, not only by the perception and attitudes of the source and receiver but also by those of all intermediate links in the communication chain. As information is relayed through the chain, it tends to be distorted and diluted.

Before and communication effort can result in the desired behavior, the receiver must attend to the message, understand and accept it. A barrier to communication effectiveness is inattention on the part of the receiver. In any organization at any particular time, letters, notices on the bulletin board, oral instructions, newsletters, etc, are being issued by various people. Each message has to compete with all others for the attention of the intended receiver.

The determinants of the amount of attention given to each message are the needs and goals of the receiver. Any message that does not seem to be relevant to these needs and goals is often ignored. When a message fails to arrest the attention of the intended receiver, the communication process is disrupted.

Lack of familiarity with the language or set of symbols used in a message is also a barrier to communication effectiveness. The receiver will be unable to comprehend the message transmitted to him. The Market Research Manager may understand a computer print-out that indicates the market position of certain products in relation to competing products. However, his colleagues may not understand computer language. In spite of the precision of the message, it is practically useless to those who cannot understand it, due to lack of familiarity with the language used, unless they are assisted.

Even if understood, communication may fail because of the tendency for people to reject messages. Again, the relevance of the message to the needs of the receiver is a significant factor in this tendency. Communication by peers or subordinates who are critical of a person’s performance tends to be rejected.

The emotional state of a person plays an important role in the likelihood of acceptance of a message. It is unlikely that an angry person will accept suggestions from others, while someone who has just experienced a serious emotional shock may, in fact, welcome and accept suggestions that ameliorate his position. The interpretation and acceptance of a message depend partly on the receiver’s perception of the intentions of the source. If the receiver perceives the intentions of the source to be in the receiver’s general interest, he may accept the message, otherwise, it will be rejected. The receiver will also accept the message if he believes that the source can be trusted. The credibility of the source is enhanced if he has expert knowledge of the subject, and is held in high esteem by the receiver. Any doubt about the intentions and credibility of the source may lead to a rejection of the message.

How to Improve Communication Effectiveness in Organizations

Communication effectiveness can be improved in organizations by following a few simple guidelines.

The first is that communication needs to be receiver-centered. The focus of the source in the choice of message, message structure, and channel should be the needs, expectations, and aspirations of the receiver.

It must be recognized that there is no one correct method of communication that is appropriate for all persons and situations. The source must, therefore, choose from among several alternative approaches. The alternative chosen should depend on the receiver, the purpose of communication, the subject of communication, and the unique skills and abilities of the sources.

Usually, several communication efforts fail without the source of recognizing the fact. He assumes that once he has transmitted the message, communication has taken place. It is only the receiver that can determine whether or not communication has taken place. Hence, the source must check with the receiver, using the feedback to ascertain the effectiveness of his communication effort.

Finally, effective communication can be learned through training and experience. Clarity of message, choice of words and channels are improved through appropriate training and experience. Organizations should, therefore, motivate their employees to acquire communication skills through appropriate programs. Of course, perfect communication can hardly be achieved. A conscious effort must, however, be made to improve communication in organizations.


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