Business Communication: Concept, Structures, and Channels
Introduction
Communication is the actionable transfer of information from one person, group, or place to another by writing, speaking, or using a medium that provides a means of understanding.
Its precise definition is disputed and there are disagreements about whether unintentional or failed transmissions are included and whether communication not only transmits meaning but also creates it.
In 1928 the English literary critic and author I.A. Richards offered one of the first—and in some ways still the best—definitions of communication as a discrete aspect of human enterprise:
“Communication takes place when one mind so acts upon its environment that another mind is influenced, and in that other mind an experience occurs which is like the experience in the first mind, and is caused in part by that experience” — I.A. Richards
What is Business Communication?
Business communication is the act of information being exchanged between two-parties or more for the purpose, functions, goals, or commercial activities of an organization.
In this case, an organization means not only one legal entity, but also several legal entities subordinated to a management company and/or government authority.
Business Communication book published in 2004 as part of Harvard Business Essentials defined business communication as follows:
“No matter whether it is written or verbal, it is the instrument through which business speaks to its consumers. It is the mechanism by which management influences its employees and guides their activities. It is also the means by which the employees provide information and feedback, which are necessary to the management to take smart decisions. Organizations which carry out clear, meaningful and effective communication with clients, employees, share-holders, creditors and the public have better chances of building reliable relationships and can count on good cooperation” — Business Communication (2004)
❗️ The ultimate goal of business communication is to convey information effectively, ensuring clarity and understanding among all stakeholders.
❗️ Business communication plays a pretty important role in team management, decision-making, problem-solving, collaboration, and, most importantly, in achieving your overall business goals. It is also often critical to maintaining strong professional relationships.
Business communication is an essential part of a successful organization. Good communicators are vital to a business's profit margin and reputation. Employees who communicate well and understand the company's vision help make the company successful.
❗️ Clarity, conciseness, concreteness, correctness, completion, coherence and courtesy are the crucial principles of business communication. By using clear, concise and easy-to-understand language, you can ensure that the information is passed to an entity correctly without any ambiguity.
The Importance of Business Communication and Its Effectiveness
According to a study conducted by Loom, 1,500 workers are spending an average of 3 hours and 43 minutes a day communicating through various means, including emails, instant messages, video conferences, and phone calls. This is costing companies over $21 billion per week.
The importance of business communication also lies in:
Business communication directly impacts your company’s operational efficiency, employee satisfaction and employee turnover, and external stakeholder satisfaction rates.
Despite this, many organizations struggle to implement strong communication practices.
A recent Harvard Business Review study found that communication barriers lead to delays or failures in project completion (44%), lost sales (25%), and missed goals (31%).
The way you communicate with your employees has a tremendous impact on employee productivity, teamwork, employee experience, and ultimately employee engagement.
Haiilo's Ultimate Guide to Internal Communications in 2024 reports that 44% of employees believe managers do not communicate clearly about the company's vision, and 72% of employees do not have a full understanding of the company's strategy. 60% of communications professionals do not have a specific strategy for measuring their internal communications efforts, i.e. don't know where to start, what the next steps are, or how to calculate ROI.
Effective business communication directly affects the external positioning, relationships with external stakeholders, their satisfaction ratings, as well as all aspects of the company's activities: from processes and efficiency to employee morale and customer satisfaction.
Thus, effective business communication is how employees and management interact to reach organizational goals. Its purpose is to improve organizational practices and reduce errors. It’s important to work on both your communication skills and communication processes to achieve effective business communication.
Effective business communication also helps keep stakeholders on the same page by providing critical information to all relevant parties. It can offer the following benefits:
Types, Forms and Methods of Business Communication
Business communication is built on the basic forms of communication, has several different types and methods, and is not limited to speech. To be effective, attention should be paid to the tone and clarity of the message, regardless of the method of communication.
✔︎ Basic forms of communication:
🟧 Types of Business Communication
The two main types of business communication are determined by the audiences involved in business communication. Accordingly, business communication is divided into internal and external.
Internal audiences may include employees and stakeholders within the organization. External audiences may include customers, suppliers, and investors. Messages in business communication should be specific to the audience.
🔸 1. Internal Business Communication:
Internal communication in an organization can be classified as upward, downward, and lateral. This form of business communication occurs within an organization and includes information sharing, encouraging collaboration and cooperation, and aligning employees with managerial objectives, hence increasing the business's productivity and synergy.
1.1. Internal Upward Communication: This flows from lower levels of a hierarchy to the upper levels. Examples include performance reports, giving feedback to superiors about different aspects, and allowing employees to communicate their experiences and suggest improvements. It plays a crucial role in enhancing job performance.
Strengths of upward communication:
Weaknesses of upward communication:
1.2. Internal Downward Communication: This typically involves getting and receiving instructions and assignments from higher to lower levels within the organization, such as directives, memos, and policy announcements. Effective delegation and clarity in this communication help prevent misunderstandings and operational errors.
Strengths of downward communication:
Weaknesses of downward communication:
1.3. Internal Lateral Communication: Communication that takes place between and among staff members at the same level, facilitating coordination and collaboration. This includes meetings, emails, and team briefings. Effective communication in this area ensures that tasks are understood and executed correctly.
Strengths of lateral communication:
Weaknesses of lateral communication:
🔸 2. External Business Communication:
External communication is the communication between an organization and people or entities outside the organization, in this case, customers, the supply chain, shareholders, and the public. This category of business communication is used for marketing, customer engagement, and business relations to build, maintain, and develop business, commercial, or other associations to sell products or services or manage the image of an organization.
Your organization’s external communication should be a top priority because it manages your business’s reputation and outside relationships.
2.1. Customer Communication: This is a business practice that involves the flow of information between the business and customers. This includes information transmitted by the consumer to another party, information exchanged with the consumer, messages that can be promotional, or any other information that may be passed or received by a consumer. Interaction with the customer is crucial as it generates confidence, satisfaction levels, and, hence, loyalty towards the brand.
2.2. Stakeholder Communication: Information sharing in stakeholder management involves all the communication with the various external parties like shareholders, suppliers, government, and the media. By establishing this category of communication, businesses can streamline their external stakeholder processes, simplify their supply chain management, and create a transparent and relevant flow of information, ensuring reliability.
2.3. Public Relations: This involves maintaining a positive and healthy brand image by actively addressing public issues and establishing a clear line of communication with the public and the media. Public relations involves issuing press releases, brand briefs, organizing and developing crisis communications, and providing information about the company. Public relations communication is a critical business tool for improving the current image of the organization, gaining public trust, and increasing competitiveness.
Strengths of external communication:
Weaknesses of external communication:
🟦 Forms of Business Communication
There are four forms of business communication, and people in your organization should be well-versed in each. Understanding and using each form of communication will set you up for success and help you lead more effectively.
🔹 1. Verbal Communication
Verbal communication is the most common form of communication. It involves speaking words to convey messages and is the most direct and efficient way to communicate.
In the workplace, people communicate verballing all the time. You will talk with customers over the phone or in a video conference, and you will speak to coworkers or partners in person.
Verbal communication can also be supported by written and nonverbal communication, like in a speech or a presentation. You would use both verbal and visual communication to present a product or a business plan to stakeholders.
When utilizing verbal communication, keep these goals in mind:
For effective verbal communication, always be clear and concise. Keep your message simple and to the point. Be mindful of your tone and the pace of your speech, and encourage dialogue by asking open-ended questions.
🔹 2. Nonverbal Communication
Nonverbal communication refers to body language, gestures, facial expressions, posture, and eye contact. Our physical actions convey messages, and we can use them both intentionally and unintentionally with customers.
Here are some common forms of nonverbal communication that affect customer interactions:
At work, nonverbal communication helps employees and customers feel understood, seen, heard, and respected. For example, you would smile when you hear a great idea from a coworker or maintain eye contact when a customer gives you feedback.
Some ways you can improve nonverbal communication are:
Facial expressions and body language convey emotions, helping you build lasting connections.
You can also improve your nonverbal communication by maintaining eye contact when someone is speaking to you, paying attention to your facial expressions, and being mindful of posture and personal space.
🔹 3. Visual Communication
Visual communication conveys information using images, charts, graphs, and infographics. When used properly, it’s a powerful tool for capturing attention and simplifying information. Since customers have different learning styles, visual communication is sometimes the best way for others to retain information.
In the workplace, visual communication is used for PowerPoints, infographics, and charts. It’s also used for posters, signage, and performance reports. These visuals are great for internal communication between employees.
Visual communication is also used for promotional videos, graphics, and social media visuals. TV ads and other videos about your business can catch the eyes of your audience and keep them visually engaged with your message.
Here are a few things to consider when utilizing visual communication:
🔹 4. Written Communication
Written communication is the act of writing (or typing) to share information. It’s a common communication tool, often shared through books, blog posts, letters, emails, memos, and pamphlets. Written communication is the best way to document information, provide instructions, and maintain records at your organization.
Best practices for effective written communication include:
🟥 Methods of Business Communication
The two primary methods of business communication are synchronous and asynchronous. Understanding the difference between the two, as well as the benefits and drawbacks of each, can help determine which communication method to use.
♦️ 1. Synchronous Communication
Synchronous communication describes the real-time exchange of messages. It requires individuals and parties to be part of a conversation at the same time. It may also mean being at the same physical location, like in a face-to-face meeting. Examples of synchronous communication include phone calls, video conferences, instant messaging, and face-to-face conversations.
Pros:
Cons:
♦️ 2. Asynchronous Communication
Asynchronous communication enables information to be exchanged at any time. Participants using this form of communication can send information and respond at any time. Examples include emails; online forums and collaborative documents; as well as communications like letters, written articles, videos and even advertising.
Pros:
Cons:
In a study conducted by Grammarly, a new business communication ecosystem is taking shape:
Employees are communicating 18% more in writing and prefer to use asynchronous communication channels. However, managers report a 12% drop in written communication effectiveness over the same period and a “decrease in productivity.”
❗️ Business methods of communication can also be broken down into different categories, which are business communication methods. They are:
There is some relationship between these terms since written communication can be either electronic or non-electronic, just as the visual method of business communication is based on electronic, non-electronic, written and verbal methods of business communication.
🔺 3. Electronic Communication
Almost all businesses use electronic communication these days. It’s become vital to the everyday management of workforces all over the world, especially in remote work.
There are many different types of electronic communication. They include:
These methods of communication can be used for a range of different purposes. But not all of them are suitable all the time.
For example, you wouldn’t text an employee about sensitive issues, such as redundancies or grievances. Many employment issues have a specific process you must follow which can include written agreements or face-to-face meetings.
A good rule to follow is to:
You can also use software for people management. BrightHR lets you manage loads of HR essentials, such as, annual leave requests, sick leave and staff rotas.
🔺 4. Non-electronic Communication
Non-electronic business communication includes:
It also includes the use of hand signs, tone of voice, and other physical aspects during face-to-face meetings. It expands the content of the communication and shares details that might not be said orally, such as the mood or intentions of the speaking individual.
Many businesses have moved to a paperless system in recent years. Going paperless is better for the environment, space-saving and, with cloud-based systems, means you can access your documents from anywhere.
However, there are some documents that require a physical non-electronic copy. You may need to submit physical paperwork to the government as part of your tax and employment records.
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🔺 5. Written Communication
As mentioned above, you can have written forms of communication in both electronic and non-electronic formats. Written communication is any message that uses the written word.
This method of business communication ensures that information is formally documented, leaving a traceable and permanent record. There are also various subsets within this method of written communication:
Using methods of written communication can keep your business safe and compliant with employment law.
Written communication can save time, money and create a record of what was said and done. Keeping these records can help to prevent unfair dismissal claims.
You should have written copies of all your workplace policies, and employment contracts for staff.
🔺 6. Verbal Communication
There are many verbal methods of communication used in business. Including:
This comprises instruction transmitted through spoken words, including various subtypes, such as interpersonal, face-to-face, telephone, or video conferencing, for swift and effective information exchange.
Any form if spoken word counts as verbal communication. These business methods of communication are typically used for less formal matters.
This is because you should keep written correspondence for anything that could have a significant impact on the way your business operates.
Despite that, there are times where a face-to-face meeting is required. It’s a legal requirement to hold a consultation meeting with employees when deciding on redundancies.
🔺 7. Visual Communication
Visual communication refers to passing information through:
It also helps raise the level of knowledge and memory due to the use of text and images, making it easier to illustrate concepts that might be hard to grasp.
According to Ph.D. Fabricio Pamplona, the human brain processes images around 60,000 times faster than text—it takes only 13 milliseconds for the human brain to process an image, and 90% of information transmitted to the brain is visual.
Presentations
Speaking and presentation are the main categories of business communication, which include the transmission of information through text, images, and other aspects of multimedia. An effective presentation helps illustrate problems and solutions in a concise and logical manner. Using an effective presentation template ensures that your information is organized and presented in the best possible way.
Infographics
Infographics can be defined as a method of communicating information and data through graphics and text to convey information in a systematic manner. Many of them use graphical features such as graphs, charts, and diagrams to present statistics, processes, and trends. Infographics can also be used for promotional purposes, to communicate with employees or other stakeholders, and for educational purposes.
Videos
The use of videos in business communications has become quite popular as they are able to capture the attention of the audience and convey information through dynamic images. Videos are becoming an increasingly popular means of communication for marketing and brand awareness purposes. They can be used on websites, apps, social media platforms, emails, etc.
Key Business Communication Channels
Communication channels are the medium through which information is transferred internally within an organization (employees, managers, owners) or to its external stakeholders (customers, suppliers, investors). These channels are essential for conveying ideas, sharing information, making decisions, managing operations, and achieving organizational goals.
These communication channels are typically classified as external or internal communications, depending on the recipient of your message:
And these channels can then be subdivided into categories based on their formality, focus, purpose, and technology used.
12 Key Workplace Communication Statistics
The Importance of Effective Workplace Communication – Key Statistics for 2024 from Expert Market provided us with main trends. How is the working world communicating and what are the common trends? Here are the crucial statistics on workplace communication:
❗️ Communication channels in the workplace fall into two main categories: synchronous and asynchronous channels. Here above, in the methods of business communications, synchronous and asynchronous communication are described. Combining these communication methods achieves the best results.
Top Communication Channels
1️⃣ In-person communication
In-person conversations are one of the most effective channels of communication in the workplace. Talking to someone in person allows you to use both verbal and nonverbal communication cues, which can help improve the quality and efficacy of your conversations.
Face-to-face communication is when two or more people interact and communicate while visible to one another. Face-to-face communication is often more effective than written or audio-only conversations. Essential for team-building and key meetings, in-person interactions allow people to communicate in several ways: listening, verbal communication, and nonverbal communication.
Pros:
Cons:
2️⃣ Video conferencing
Videoconferencing platforms allow for communication that includes both verbal and nonverbal cues, much like an in-person conversation does which allows for a more personal interaction than an email or phone call.
With the advent of globalization, remote work, and virtual teams, businesses are increasingly turning to video conferencing. They are using it to bridge geographical gaps and streamline operations. However, like any technology, video conferencing comes with its own set of advantages and disadvantages.
Pros:
Cons:
3️⃣ Phone calls
Phone calls can clear up confusion or convey new information across long distances and conference calls can allow multiple people to take part in a conversation. Phone calls lack the nonverbal cues of in-person conversations or videoconferencing but may provide a simple communication channel for customers and employees.
Telephone communication is the most popular method of communication, having been around for more than a hundred years in various forms. The land line telephone is still important for business and home, however mobile phones are fast becoming the favoured technology.
Pros:
Cons:
4️⃣ Instant messaging
Instant messaging platforms and boards allow teams to communicate instantly and directly with one another. This type of platform can help increase overall communication between team members and ensure everyone in the project is kept up to date.
Each person must have an 'Instant Messaging' (IM) client open on their computer.
The difference between email and Instant Messaging is that the IM window shows the message almost as soon as it is typed - no downloads are required.
Business
This kind of service is used by business people to help keep in touch whilst on the move. Imagine a work colleague is at the airport waiting for a plane connection, they can use Instant Messaging to 'talk' to colleagues in the office - it is a good way to keep on working (and avoid the sheer boredom of waiting for a plane!) despite being away from the office.
Customer Support
Many online services have a website that also has a 'chat' facility. This allows you to make contact in real-time with a customer support assistant. For example, you may be having a problem filling out the online order form, so you click on the 'chat' and up pops a window where you can ask a question to staff.
Home
It is also used at home. For example, you are online doing your usual stuff on the Internet, but online game you have an IM window open because friends and family are also online. You chat whilst each of you are online.
Pros:
Cons:
5️⃣ Short messaging service
SMS stands for Short Messaging Service. It is available on all mobile phones. SMS on the mobile phone allows you to send short (up to 160 character) text messages to someone else's mobile phone. It is incredibly popular, with over 2 billion people using it around the world.
Pros:
Cons:
Businesses are also increasingly adopting SMS as a key communication channel for their customers, thanks to its exceptionally high open rate of 98% (while email has an average 20% open rate). This high engagement rate makes SMS a no-brainer for many companies, with 90% of them reporting successful SMS marketing campaigns.
6️⃣ Email
E-mail stands for 'Electronic Mail'. Email is one of the most popular written communication channels that sends information via text messages. It is a great channel for sending or receiving attachments and communicating with a large group of people. A short email can quickly convey information and takes only a few minutes to write. Organizations use the email communication channel to share important work documents and provide employees with regular company updates.
Email is the reliable digital workhorse of business communication, with workers receiving an average of 65.5 emails per day and sending 24.6 emails per day.
Each E-mail user has a 'mailbox' with a unique address into which messages can be sent ready for the recipient to collect and read.
If you have an account with an Internet Service Provider (ISP) such as Yahoo then they will provide you with an email address and let you use their email service for no extra cost. You can also get an email address from one of the many free providers such as Hotmail or Gmail.
Smart phones can download your emails so you can read them anywhere, they also allow you to send emails.
You can also attach files to an email, for example a word document or spreadsheet.
Pros:
Cons:
The evidence against email can be overwhelming: 81% of global organizations have experienced an increase in email phishing attacks in the last couple years, and 94% of organizations fell victim to these traps in 2022.
7️⃣ Written documents
Written documents are a communication channel we can use to share important information, news, or statistics with other people.
Some documents commonly used for internal communication are:
These documents provide a sense of authority and contain essential official information. For instance, during the onboarding process, the HR department provides an employee handbook that contains details about the organisation's history, procedures, missions, policies, values and employee benefits. This helps communicate the organisation's expectations and provides written proof. Also, documents can contain both images and text to deliver the right message to the recipient.
Pros of written documents:
Cons of written documents:
Pros of file sharing:
Cons of file sharing:
8️⃣ Live chat
Live chat is a real-time communication channel that allows businesses to connect with website visitors and customers directly through a chat window embedded in their website or mobile app. Think of it like the digital version of a conversation with an employee in a brick-and-mortar store, where customers can ask questions, get clarifications, and receive assistance in real time.
Most live chat features rely on AI to answer frequently asked questions and only give you a real person if requested. Online chat can support sales, customer service, and many other departments.
Pros:
Cons:
As you have seen above, it is pivotal to have customer service that will not be counterproductive (i.e., rude or disinterested) since 97% of consumers have stated that their loyalty to a brand depends on their interaction with the support service.
9️⃣ Social media
Social Media is a powerful tool that can drive your business’s success. Social media platforms like Twitter, TikTok and Facebook are used by everyone from Elon Musk to POTUS, and can dramatically impact the rise and fall of stars, businesses, politicians, elections and celebrities today.
A LinkedIn study reported that 90% of marketers swear by the usefulness of social media in increasing the exposure and brand awareness for their business. 75% said that social media increased website traffic, which directly translates to an increased number of customer visits.
Furthermore, an impressive 71% of customers who have a positive experience with a business through social media usually recommend the brand to others in their circle!
According to LinkedIn, with over 3.5 billion active users on social media, by marketing through platforms like Facebook, YouTube etc, businesses can tap into the reservoir of potential sales and profits.
The use of social media can provide several benefits to businesses, such as generating leads, increasing brand awareness, and providing market data. But it also has several disadvantages, including the risk of ruining a company’s reputation, the demand for constant attention, the potential for privacy breaches, difficulty in keeping up with trends, and the challenge of tracking social media ROI.
Pros:
Cons:
🔟 Business Blog
Business blogging is a way to build trust with consumers. It can be an especially valuable resource for businesses that are selling a product or service online, as it connects the company's expertise with the offering on the website. When starting a new business, or when working in marketing, you can use a blog to convince potential customers to make a purchase.
Best Practices for Effective Communication
With a growing number of companies maintaining remote work, best practices for clear and productive communication are very important.
Here are several best practices from Nextiva that in-office, hybrid, and remote-first companies can adopt to manage their communication and simultaneously boost their productivity:
Team Manager, Financial Analyst @ Financial Sector, Banks | Master's in Economics, Banking Strategy, M&A, Cross-Border Transactions, Corporate Banking, Risk Assessment Expert
1wDear LinkedIn members in my and your networks, we will definitely continue #BusinessCommunication and talk about assessing and improving high-demand business communication skills. No matter what industry you work in, practical business communication skills are essential to support your career advancement. Business communication skills can encompass hard and soft skills that help professionals succeed in the workplace.