MBA I Sem Business Communication

Unit 1 Part a Notes

COMMUNICATION
The word „communication‟ has been derived from the Latin word „communis‟ which means common.
That is, sharing of ideas in common.
By communication, we mean the process of passing information as well as understanding from one
person to another. It is involved in all human relations. It is the nervous system of any organized group.
Through communication, information and understanding are developed. Organisations exist only
through communication, Planning, organizing, directing, controlling and co-coordinating in an
organization will not be successful without an effective communication.
Communication is a means to achieve an end. Through communication the organized activity is unified,
behavior is modified, change is effected, information is made productive and goals are achieved. The
success of an enterprise depends on the way in which information is communicated to others. If the
communication is effective, the productivity of the organization and the morale of the employees will go
up. Conversely, poor communication would mean poor results, poor profits and low productivity. Every
organization wants to impress the outside world as well as its employees, customers and government
that its activities and prices are competitive, profits reasonable and wages are fair, only through
communication. Inability to communicate effectively will lead to failure of the management in its tasks.
Thus through communication a business enterprise ensures the flow of information, perception and
understanding between various parts and members constituting it. It includes spoken, written, upward,
downward, inter-personal, intra-organisatinal and inter-organisational flow of information and reports.

DEFINITIONS : Communication has been variously defined by number of writers.

According to McFarland, Communication is “a process of meaningful interaction among human
beings. More specifically, it is the process by which means are perceived and understandings are
reached among human beings.”
Scott, Clothier and Spriegel have defined it as “a process involving the transmission and accurate
replication of ideas reinforced by feedback, purporting to stimulate actions to accomplish organizational
goals”.
For Dale S. Beach, communication involves “the transfer of information and understanding from
person to person”.
Allen Louis defines communication as the sum of all the things one person does when he wants to
create understanding in the minds of another.
For Newman and Summer, communication is an exchange of facts, ideas, opinions, or emotions by
two or more persons.
Herbert A. Simon has defined it as a process whereby decisional premises are transmitted from one
member of an organization to another.
For Charles E. Redfield, communication is the broad field of human interchange of facts and opinions
and not the technologies of telephone, telegraph, radio and the like.

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NEED FOR COMMUNICATION
 For the growth and development of commerce and business, communication is a must. Without
communication, commerce, business, industry and trade cannot exist.
 Lack of proper communication or ineffective communication will adversely affect all areas of
activity in the management of business.
 Effective communication makes the manger successful in his planning, directing, controlling and
coordinating the enterprise efforts through the human force in the organization.
 It is only through communication, people and structure are tied together, and Group of goals and
organizational goals are achieved only through communication. It is as vital as blood circulation in
a human system.
 Communication increase managerial efficiency, it helps the manager in achieving coordination.
Communication is needed in the recruitment process of potential employees. The recruits are told
about the organization structure, the policies and procedures only through communication.
 Communication is also needed to promote co-operation and industrial peace.
 It provides the information and understanding necessary for group effort.
To put it in a nutshell, communication is needed for managerial efficiency as well as for employee
satisfaction, motivation, co-operation and job satisfaction. Administrators are reported to spend 75 to 95
per cent of their time communicating-either sending or receiving messages.

OBJECTIVES OF COMMUNICATION : The objectives of communication include the following:

a) To tie people and organizational structure together
b) To help people to understand, appreciate, accept, and act upon the ideas, policies, procedures etc.,
of the organization.
c) To provide the information and understanding necessary for group effort.
d) To develop right attitudes among employees through motivation
e) To project the image of the enterprise in the society.
f) To promote mutual understanding, co-operation and goodwill between the management and the
employees.

PRINCIPLES OF COMMUNICATION
To achieve the objective of communication, the communicator should keep in mind the following
principles:
1. There must be a clear understanding of the objective or purpose of communication. (In the absence of
this principle being satisfied the communication fails).
2. The communication must be in an easily understandable language. The receiver should not be driven
to go in search of dictionary or an interpreter.
3. Communication must be complete and adequate in all respects to avoid misunderstanding.

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4. The medium of communication must be appropriate considering the situation. Urgency of the matter
and the subject itself.
5. The messages should be consistent with the overall objectives and policies of the organization.
6. The actions of the communicator should not be contradictory to the message communicated.
7. There should be follow-up of communication to make sure that the receiver has understood the
message properly.
8. To ascertain the receiver‟s reaction, feedback must be encouraged.
9. Grapevine being a powerful channel for communication, it should be encouraged and not curbed.
10. The communication skills of the executives should be developed through proper training.
11. To be successful in oral communication, the executives must be good listeners-that is, they should
listen more before speaking out their mind.

TYPES OF COMMUNICATION :
Communication in an organization may be oral or written; formal or informal.
Oral Communication: In oral communication, the communicator has to talk and listen. Talking and
listening may be face to face, or in group discussion or over telephone and television. Oral
communication is generally informal and feedback is quick and instantaneous. The examples of oral
communication are: speeches, group discussions, and grapevine.
It is unsuitable for highly technical subjects and it is liable to be misunderstood. Moreover, no
commitment is involved on the part of the receiver.
Written Communication: Written communication is formal and is appropriate when the information
sought to be sent is meant for due compliance by the receiver. Written communication stands for
seriousness, authority and credibility, and clarity. However, it is an expensive, time consuming and rigid
type of communication. Feedback is always late. Written communication includes letters,
memorandums, bulletins, periodicals, forms etc.
Formal Communication: Communication is an organization in general falls under the formal
communication category. A formal communication flows through formally established channels. It is
concerned with work-related matters. Orders, instructions and decisions of the management are
communicated to the subordinates through the formal channel only. The formal communication flows in
three directions, viz., downward, upward and laterally or horizontally between departments.
 Downward Communications which flow from superiors to the subordinates in an organization are
known as downward communication. This is used to direct the efforts of the subordinates, define
their goals, tell them what is expected of them, what resource are available, and to administer
rewards and punishments.

Examples of downward communications are: orders and instructions about job, directions to
understand the job and its relationship with other jobs, organizational policies and procedures,
reprimands, criticisms, etc.. The important problems in this type of communication are
coordination, distortion and resistance. However, people at lower level of the organization have a
high degree of fear and respect towards downward communication thereby leading to a high degree
of its acceptance.

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  Upward communications are those which flow from the subordinates to the superiors and which
act as a feedback. Examples of upward communication are: Information about subordinates‟ work
performance, their problems relating to work, performance appraisal of subordinates, opinions, attitudes,
feelings etc. This type of communication is more susceptible to various obstructions and bottlenecks because
of its special nature. It cannot be taken for granted as it often carries managerial control information.

 Lateral or Horizontal Communication involves flow of information between persons of the same
hierarchical level in an organization. This is meant for helping coordination of the activities of
different departments. In addition to providing help for the task of coordination, horizontal
communication also provides emotional and social support to the individual, and avoids the slower
procedure of directing communication through a common superior. All formal organizations
provide for horizontal communication.

Examples of horizontal communication are: communication between production and marketing

personnel, between finance and production personnel, between personnel and finance department
etc., the greater the interdependence of work of the departments, the greater is the need for
horizontal communication.

INFORMAL COMMUNICATION
When communications do not flow through structured channels formally recognized, they are said to be
informal in nature. The informal communication is very much a part and parcel of the organizational
process. Informal communication, known also as ‘grapevine’ flourishes in all organizations. It is not
structured, and it does not have any formal recognition. Yet it exists due to the natural human tendency
to communicate feelings, grievances etc., and it cannot be eliminated.

In fact, grapevine is being encouraged in all organizations to get a feedback quickly on all organizational
matters. Any rumor is said to be from the grapevine. Today, the term applies to all informal
communications. It is through informal communication, people in an organization carry on social, non-
programmed activities within the formal boundaries of the unit concerned.

MERITS AND DEMERITS OF GRAPEVINE

Merits: The organizational grapevine has tremendous capacity to carry information both helpful and
harmful to the organization. It is recommended because of its positive features.
i) It is the grapevine which gives a manager much feedback about employees and their work
experiences, thereby increasing his understanding of what he needs to do be a supportive manager.
ii) It also helps to interpret management to the workers so that they may be more supportive.
iii) The special feature of grapevine is its fast pace.
iv) It is flexible and personal, it spreads information faster than most management communication systems do.
v) Grapevine can crack even the tightest company screen, because of its capacity for cutting across
organizational lines and dealing directly with the people who are in the know of reality.
vi) All evidence shows that grapevine is influential, either favorable or unfavorable and management do
make its use in real life. In fact, some management even attempts to cultivate the grapevine.

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Demerits: The most undesirable feature of grapevine is rumor which generally gives it a bad name.
Rumor could by chance be correct, but generally it is incorrect; so it is presumed to be undesirable.
Since rumor tends to change as it passes from person to person, and finally takes an epidemic form it
greatly damages organizational interests.
But it is wrong to strike at the whole grapevine merely because it happens to be the agent which carries
rumor. The correct approach is to identify its cause and to deal with it firmly.

PROCESS OF COMMUNICATION
Whether formal or informal, the basic communication process is still the same. In fact, communication
has been defined as a process. The various components of the communication process are:
(a) the source or sender; (b) the message; (c) the code; (d) the transmission media; (e) the receiver‟s
response or feedback.

(a) The source: The sender of the message is the source for the receiver. That is, the organization or the
individual who sends the communication would be the source for the receiver. The sender or the source
must be sure about the purpose of the message or communication. The purpose may be
(1) informing the receiver,
(2) persuading the receiver,
(3) educating the receiver or
(4) changing the attitude of the receiver towards the source or the object of the message itself.

(b) The Message: The contents of the communication constitute the message. Such contents may be
mere information, suggestion, order, advice, persuasion, warning etc., the message must be so drafted or
coded that it may achieve the purpose for which it is sent. In other words, the message should influence
the receiver and change his attitude.

(c) The Code: The message is required to be put into a code before it can be transmitted through
appropriate medium. All human languages are codes. Encoding involves the use of symbols. The words
and phrases in languages are symbols and form language units. The communicator‟s message must be
translated into a common language which reflects the idea.

(d) The Transmission Media: The means through which managers communicate their subordinates are
known as transmission media. The communication process can be carried out in three media:
(a) Oral, (b) Written, and (c) Visual or non-verbal,
Letters, reports, bulletins, newspapers, magazines, film-strips, face-to-face dialogue, gestures, tone,
facial expressions etc., can all be termed transmission media. For distant contacts telephones, telex,
telegrams etc., are employed.

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For two-day and multi-channel communication, conference, seminars, committee meetings, group
discussions, etc., are made use of. It is the sender who should select an appropriate medium for the
transmission of his message. If the choice is inappropriate, it is likely to affect the flow of
communication and even result in communication failure, Facial expressions, tone of voice, and even
silence may be termed as media for communication.

(e) The Receiver: Effective communication is one which is receiver – oriented and not media-oriented.
The receiver is the individual or the organization for whom the message is encoded and transmitted. The
code competence of the receiver should be compatible qualitatively and quantitatively to the code
competence of the sender. In other words, the receiver must be able to decode the message and to
communicate his response to the sender. It may be pointed out here that words often mean different
things to different people, and the same word may have many different meanings.

(f) The Receiver’s Response or Feedback: The receiver‟s response or action is the final stage in the
communication process. It is also known as feedback. The source sends the message only to have a
feedback and it will suffer if there is no response or feedback. Instant response can be expected and is
possible only in face-to-face conversation.
One-way communication process will not give any feedback, but a tow-way communication will have
feed-back. A feedback provides a channel for the receiver-response which enables the sender to
determine whether the message has been understood by the receiver as intended. With timely feedback,
any distortion in meaning can be corrected by another communication.

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