While the main purpose of business communication is to ensure that all parts of a business’s operations run smoothly different types of communication serve different purposes.
Case Study 1: The Inland Revenue has changed the way that it is run and structured to become far more customer focused. Extensive training has been carried out within the organization to improve internal and external communications. For external communications, it expects its employees to 'be open to customer problems and try to understand the situation from their perspective'. Internally, this translates into people being 'approachable and understanding at all times' e.g. in their dealings with colleagues.
There are three main types of business communication such as internal communication, external communication and mixed communication.
Choosing the right type of communication depends on several factors, such as the audience, purpose, message complexity, and desired outcome. Let’s take a look at these three in more details.
Internal business communication
Internal communication is between different people or groups of people who work within the same business organization. Employees such as colleagues, managers and subordinates communicate with each other inside their own department or with other departments in the firm.
Examples of internal communication may include giving and receiving information and instructions, discussing day-to-day business activities, having meetings about the business’s daily affairs, discussing ideas for products and services, etc.
The quality and effectiveness of internal communication can have an impact on many areas of the business. When employees are encouraged to participate in group discussion, then effective communication will aid motivation as workers do not feel isolated, hence increasing productivity. Asking staff for their ideas can assist with problem-solving. If changes in consumers’ decisions take a short time to be communicated to the decision-makers, then the business will be quick to respond with appropriate products. Correct understanding of a properly expressed message will lead to correct responses – right products being made. Finally, effective coordination between departments will be helped by good communication links between them.
Internal communication can occur in different directions. The most common of these are horizontal and vertical:
A. Horizontal business communication. This is the main direction of communication in modern matrix structures. It occurs when people from the same level of an organizational hierarchy communicate with each other such as staff within the same business department or with the same status in different departments. It happens along an organization chart between people who have the same status, but different areas of responsibility. However, there might be misunderstanding between departments about the culture, ways of working, objectives, problems, technical language, etc. as well as of conflicting objectives of different departments.
B. Vertical business communication. This is the main direction of communication in traditional formal hierarchies. It occurs when people from different levels of an organizational hierarchy communicate with each other. It happens between people who have different status, but similar areas of responsibility. There are two types of vertical communication:
a. UPWARD VERTICAL BUSINESS COMMUNICATION. This occurs when a person communicates with a person or group of people above them in the organization structure at the higher level in the hierarchy. It is used to report on progress about the task, respond to inquiries from supervisors and pass on important information relating to targets that have been set.
b. DOWNWARD VERTICAL BUSINESS COMMUNICATION. This occurs when a person communicates with a person or group of people below them in the organization structure at the lower level in the hierarchy. It is used to give instructions and pass on important information about target to achieve.
Here is a list different communications media when communicating internally (within a business): meeting minutes, teleconferencing, grapevine (gossip), memorandum (memo), E-Mail, notice board, reports, presentations, newsletters, etc.
External business communication
External communication is between different people or groups of people who do not work within the same business organization. Employees communicate with people and organizations outside the business – the business’s stakeholders including suppliers, customers, shareholders, the government, lenders, etc.
Examples of external communication may include selling products to customers, dealing with complaints, sending investment information to shareholders, ordering raw materials from suppliers, sending press releases to the media, liaising with government agencies over TAX and new regulations, negotiating with trade unions, etc.
The quality and effectiveness of external communication can have an impact on many areas of the business. Effective external communication to customers is essential for any business if it is to remain customer-focused. It must ensure effective advertising of products to prevent potential customers from being confused about a product’s qualities because of a poor advertisement. When a customer places an order, it needs to be clear what he wants, so that the business supplies exactly what is required. Suppliers must be informed when and where to deliver raw materials. Businesses may also have to deal with handling crisis situations and pressure groups who may be concerned about their activities.
The most common categories of external business communication include:
- Marketing and advertising. Reaching out to potential customers to promote products or services.
- Public Relations (PR). Managing the public image of the organization through media outreach and communication strategies.
- Customer service. Addressing customer inquiries and concerns.
- Investor relations. Communicating with investors to maintain financial stability and attract investment.
- Partner communication. Collaborating with other organizations to achieve mutual goals.
Here is a list different communications media when communicating externally (outside a business): letters and other postal service, bills, invoices, E-Mail, customer magazines, Public Relations (PR) materials, reports, presentations, etc.
Mixed business communication
The most common categories of mixed business communication include:
- Internal communication with external elements. Sharing company news with the public through social media or press releases.
- External communication with internal elements. Inviting customers to participate in product development or feedback surveys.
- Employee advocacy. Encouraging employees to become brand ambassadors and promote the company on their personal networks.
In summary, business communication can be to both internal and external receivers.
Effective communication often uses a combination of internal and external channels to reach the target audience and achieve specific goals.
As always, the most important factor in business communication is that other people understand what they are being asked to do, so that they carry out their work efficiently.
