Why Communication is Important in Business

Why is communication important in business? If you want to know the importance of communication in a business organisation, then this article is for you. In fact, communication is a significant element for a successful business.

Hardly, there will be someone who overlooks a positive relationship between communication and business success.

Communication plays a crucial role in making a business successful because it is one of the core factors of a business setting.

Businesses need finance, people, and other assets to run the activities. But, that is communication which connects all the business activities.

The success of a business depends on the communication system of that business. It helps to achieve goals and objectives. For maintaining a successful business, an effective communication system is crucial.

A poor communication system can disrupt business and lead to failures. A business organisation must understand the importance of communication skills in business.

Also read: Why are Communication Skills Important?

 

What is Business Communication?

Communication means, sharing or exchanging information, ideas, or knowledge with other people.

But, when you consider communication in a business context, the basic definition of communication is the same, but the purpose will be different.

So, business communication means, sharing or exchanging information, ideas, or knowledge with other people inside and outside business or company, to achieve goals or to benefit the business organisation, or make a profit.

In other words, the communication which is made for business purposes or associated with business activities is called business communication.

M. K. Sehgal in his book Business Communication mentioned business means any economic activity which undertakes to earn money or profit.

And the communication which undertakes for that economic activity is called ‘Business Communication’.

 

Forms of Business Communication

There are different forms of business communication and they are important for business success. Businesses use these forms of communication to connect with stakeholders internally and externally. They include:

1. Verbal Communication

2. Non-verbal Communication

 

1. Verbal Communication

Verbal communication can be divided further into two types:

Oral communication; it means, the words we speak or the spoken words. This is a common way of communication in business organisations. As people in organisations share information orally or via words.

Oral communication may include; face-to-face communication, telephonic communication, communication via web, video conferencing, online interviews, etc.

Written communication; communication, in written form can be referred as written communication. It has a great significance in business communication. Technology changed a lot the forms of written communication. It may be digital or non-digital.

Written communication may include; emails, reports, letters, brochures, notices, manuals, handbooks, orders, circulars, messaging through apps, etc.

 

2. Non-verbal Communication

In business communication, non-verbal communication is also important to be considered. This form of communication takes place without written and spoken words. It is a wordless communication. In a business environment this form of communication is also effective not only internally but externally as well.

It may include; body language, gestures, postures, eye contact, facial expressions, tone of voice, volume, pitch, appearance, personality, etc.

 

Importance of Communication in Business

Communication is crucial for a business organisation. It is an important management function.

Effective communication system is not only essential for business growth, but also helps in organisational stability.

It may be divided into internal and external communication. These both are important for a successful business.

Here, I explained the importance of internal and external business communication:

 

Internal Communication in Business

Internal communication means, the communication within organisation.

Internal communication is important in many ways. They include:

 

1. Employer-Employee Relationship

For a successful and growing business, positive employer-employee relationship is essential.

Communication can help to maintain this relationship a positive and healthy.

Employees should communicate their expectations and needs to their employers. And that eliminates the confusion and frustration between them.

For a strong and better relationship, there must an effective communication system in a business organisation. It facilitates interaction and coordination

In any kind of situation, the employer can take into confidence the employees through effective communication. It can be a uniting force for the employer and employee.

When an employer communicates effectively with an employee, appreciating his/her work can increase the loyalty of employees towards the employer and organisation.

 

2. Enforcing Rules and Regulations

Business organisations need to enforce rules and regulations for effective functioning.

The employees or subordinates have to follow those rules and regulations and they must be communicated by management.

Rules and regulations are communicated in a better way to improve the performance of a business organisation and lead to goals achievement.

Poorly communicated rules and regulations can lead to mismanagement and under-performance of employees.

 

3. Helps Avoid Conflicts

Employee to employee and employee to superior management conflicts are common in organisations.

There may be many reasons for conflicts, but miscommunication is for sure one of those.

Miscommunication on part of employee or superior can lead to conflicts, arguments, and controversies, and it also affects organisational performance.

Proper communication within a business organisation helps to reduce conflicts. By communicating effectively and clearly, they can avoid conflicts.

  

4. Helps to Build Dedicated Team

Teamwork is essential for business success. The formation of a team can be complex because the members can differ from each other in nature.

Every human being has different qualities, behaviours, attitudes, thoughts, and other personality traits.

When different people participate in a team, sometimes it becomes difficult to understand each other. And mutual understanding is important for effective teamwork.

Here, comes the importance of effective communication in business.

An effective communication system can connect them and they can communicate their concerns to other team members.

Team members with good communication, they prevent misunderstandings. Differences of opinion can be overcome with effective communication.

When team members know each other’s sentiments, emotions, and personalities, it leads to a strong team. And also leads to improved performance.

5. Communication of Vision, Goals, Plans, Policies

Every business organisation has a vision and that vision must be communicated to the employees.

Vision is the futuristic picture of any organisation. The employees of that organisation must know exactly, what the future destination of that business is?

The management must make communication to align employees with organisational vision.

A good communication system can also help to educate employees about organisational goals and objectives.

To direct all the efforts towards achieving goals and objectives, they must be communicated to the subordinates.

In the same way, plans and policies of business must be communicated to the employees.

Formation of plans and policies may be a function of higher management, but while implementing them the lower-level employees must be involved.

Before the implementation of plans, they must be communicated to the employees, so they understand and become a part of the implementation process.

Therefore, the communication system can align vision, goals, plans, and policies with employees, and direct their efforts towards achieving them.

 

6. Improves Innovation and Creativity

Innovation and creativity drive businesses. Businesses need people, who should be innovative and creative.

Business communication can help in bringing business innovation and creativity.

Employees of a business organisation can be a great source of innovation and creativity.

Effective business communication facilitates employees to communicate their ideas and suggestions to their superiors.

When employees openly express their selves, it can help to get innovative and creative ideas.

The management must ensure the employees have the freedom to express suggestions and ideas without fear and in this way innovation and creativity can be developed.

 

7. Change Management

For business organisations change is inevitable. Change, internal, and external both are important to be managed.

Changes affect the stakeholders within the organisation as well as outside.

Change creates resistance, and to overcome that resistance sometimes becomes challenging for management.

With the help of better and effective communication, management can overcome this challenge.

It is the best tool to pave the way for effective change management.

The management or employer can communicate those changes to the stakeholders before implementing them. It helps the management to take into confidence the stakeholders.

 

8. Communication as a Management Tool

Communication is an important tool available for management. The management needs a communication system in various ways.

An effective communication system links management with all stakeholders.

Five fundamental functions of management planning, organising, staffing, controlling, and directing can’t be accomplished without proper communication.

It also helps to enforce rules, regulations, and policies for good performance.

It helps management to design training and development programs for employees. It is crucial for explaining and implementing working rules and procedures.

 

External Communication in Business

The importance of communication in a business organisation can also be considered from an external perspective.

A business has to communicate with external stakeholders. They may be included, customers/clients, suppliers, partners, shareholders, contractors, investors, and prospects.

Communication with them is equally important as with internal stakeholders.

In this section, I highlighted the importance of external communication:

 

1. Customer Relationships

Customers or consumers are one of the crucial external stakeholders. Customers are important because they are the biggest source of income for a business.

Effective business communication can help to attract new customers and retain existing ones.

A business organisation with the help of a good communication system can generate campaigns to attract customers.

Effective interaction with customers increases the level of customers’ satisfaction. The more satisfied the customers, the more they will buy the products or use services.

It plays a key role to build a strong relationship with customers and that ultimately benefits the business organisation.

Building relationships with customers is incredibly essential for a business to grow and perform well.

Also read: Communication Skills with Customers

 

2. Communication with Suppliers

Suppliers are the stakeholders or entities who are connected to the business in one way or another.

Good communication with suppliers is also important and it brings value to the business.

Effective interaction with suppliers leads to fewer mistakes or errors and that saves time and resources. It ultimately leads to improved performance and productivity.

 

3. Improves Public Relations

Building relationships with the external world is an important and integral part of business communication.

Positive public relation creates and improves the company’s image as well as the brand image.

Interaction with external stakeholders is a significant way to collect feedback about products or services. And feedback can play an important role to improve the quality of products or services.

The businesses can maintain better public relations through proper communication systems, and it can help to maintain the reputation of a business.

 

 

Final Thoughts

Effective communication is essential for business success and survival.

There are a lot of reasons, why communication is so important for a successful business. And some of those as I mentioned in this article.

Having an effective communication system improves productivity, performance, and business grows rapidly.

Ineffective communication can be destructive and cause business failure.

 

Frequently Asked Questions (FAQs)

Why is communication so important?

Communication is a basic quality of human beings. It connects people to share information, ideas, thoughts, etc.

 

Why is communication important in a workplace?

Communication is important in personal life as well as in a workplace. It is important in a workplace because you have to interact with co-workers, superiors, and other stakeholders.

 

What is the role of communication in business?

The role of communication in business is like lifeblood. It is important for the success and survival of a business.

 

 

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