Many managers devote a significant proportion of their time to communications both within and outside the business.

Communication can be simply defined as the flow of information from one person to another.

Effective communications are, therefore, vital to the success of the business, since the delegation of work, the feedback of information and the controlling of the business all rely on accurate, quick and effective communication flows.

Good communication will reduce conflict and will prevent any misunderstandings of what is required by employees.

Formal communication refers to the official channels of communication which exist in a business, such as information being passed through 'line' and 'staff' relationships (e.g. between superiors and subordinates, or between people on the same level). These information flows will be concerned with the content of the jobs and may be in one of several forms, spoken, written, or electronic for example.

Informal communication refers to the unofficial channels of communication that exist in a business (often spoken as opposed to written communication). This is often referred to as the 'grapevine'.

This can be concerned with the content of the jobs (e.g. two employees commenting on the poor performance of a task by their superior), or it can be discussing non work-related matters (e.g. arranging a staff social function).

It could also refer, for example, to the anonymous passing of information to the media relating to unethical business practices.

Communications can also be classified in terms of direction, vertical or horizontal. Vertical communication can be top-down (e.g. directions and instructions given from superior to sub-ordinate) or it can be bottom-up (e.g. feedback from sub-ordinate to superior).

Horizontal communication refers to contacts and flows of information between people at the same level in the business. Where there is no facility for feedback, (often under an authoritarian management style) then this is referred to as one-way communication.

There is a danger here, however, that the message will be misunderstood or poorly performed, since the employee performing the task is unable to ask his superior for assistance or clarity.

It is a widely-held view among many businesses today that communication must be multi-directional (i.e. top-down, bottom-up and horizontal) in order to involve employees and make them feel valued by the business (e.g. implementing systems of quality circles or works councils). This will help to improve their job satisfaction and level of motivation, as well as encouraging lower rates of absenteeism and labour turnover.

Quantitative communication involves the transmission and interpretation of data and numerical information (e.g. sales figures or financial data).

Qualitative communication involves the use of language, either spoken or written. However, these messages are often complicated by the use of non-verbal communication (e.g. body language), which can often confuse the recipient of the message and lead to the misinterpretation of the information.

The basic communication process involves the transmitter (the sender) encoding a message (i.e. putting the message and the information into a form that can be easily understood).

The transmitter then chooses the communication channel that he wishes to use in order to send it to the receiver (the target for the message).

On receipt of the message, the receiver will decode it (i.e. interpret what the message is conveying) and act upon it as necessary.

There are a number of communication channels that the transmitter of the message can use to send the message to the receiver. The choice of communication channel will usually depend on the type of stakeholder that the message is being sent to (i.e. whether the receiver is an employee, a customer, or a supplier). The main communication channels are:

  1. Face-to-face contact (eg a meeting)

  2. Telephone

  3. E-mail

  4. Facsimile ('fax')

  5. Letter

  6. Memorandum

  7. Video-conferencing

  8. Advertising

  9. Videotape

  10. Notices

  11. In-house publications

Whichever communication channel is chosen, the message will have the same objectives, to be simple, fast and efficient. However, if a business believes that it needs to improve the communication channels that it uses, then the following criteria should be considered:

  1. Encourage the use of simple language

  2. Shorten the communication chain

  3. Encourage feedback

  4. Use a variety of media to convey a message

  5. Make employees aware of communication problems

This is often referred to as 'noise' and simply means anything that will distract the recipient of the message or cause either a failure to receive the message or a misinterpretation of the message. There are a number of factors which can cause communication breakdown:

  1. Too much technical language ('jargon') being used

  2. Poor presentation and use of grammar

  3. Too much information being sent ('information overload')

  4. Geographical and time problems (e.g. communications between different countries in different time-zones)

  5. Length of the communication channel

  6. Employees already being overworked and ignoring the message

  7. Technology breakdown (e.g. computers 'crashing')

This last point has become a growing problem over the last 10 years and is likely to continue to grow, as an increasing number of businesses rely on computers and information technology systems for their communications (as well as for their financial, production and personnel records).

Added to this is the increasing amount of business being conducted using electronic mail (e-mail) and the Internet (it is estimated that by 2005, any businesses which are not using the Internet to trade and interact with customers are likely to lose any competitive edge that they may have).

So it is clear to see that the 'information-age' and the 'digital-age' are going to be a major influence on how business is conducted in the future. Any business which does not employ computer-literate staff and does not use Internet-trading is likely to suffer falling levels of sales and profits as a result.

However, there are many problems inherent in what is termed 'the electronic office' - that is, a work environment which is highly computerised and relies heavily on software and communications equipment. The main problems can be summarised in the list below:

  1. Much time is often required to train staff in the use of the new equipment and software

  2. Computer fraud (e.g. 'hacking' into the computer-held information and changing the data or embezzling the business funds)

  3. Huge initial capital outlay required in order to purchase the equipment and software

  4. Equipment and software may become obsolete within a few years

  5. Resistance from employees and from trade unions to the new working practices