Administrative Business

Communication
Business Management Department

Compiled By :Kedjela Midjena (MBA)

Burayu Campus
Finfinnee 2025
 Chapter One
Overview of Business Communication
1.1. Meaning and Definitions of Communication
Communication comes from the Latin word Communicare, which means to make common to many,
share. It is the lifeblood of every business. Information must be conveyed, received, understood, and
acted upon in a proper manner. When there is a breakdown in this process, organizational efficiency
suffers. Most organizations depend on communication to accomplish their objectives.

When people in business and professions are asked to define communication, they often respond by
saying something like, Communication is the process of transferring thoughts and ideas from one person
to another. This definition sounds good from the surface; it includes the idea of communicating our idea
and thoughts to others, which is a necessary occurrence in business. However, the words transferring
and from one person to another inaccurately imply that communication is like pouring liquid from a jar
to a glass. In other words, the definition implies a simple one-way action where person A takes
knowledge from her/his head and simply pours (transfers) it into the head of person B. Obviously,
communication is not that simple. Person B may refuse to accept As ideas and may wish to present
her/his own ideas. Or B may completely misinterpret As message. As one communication scholar notes,
Communication does not consist of the transmission of meaning. Meanings are not transferable. Only
messages are transferable, and meanings are not in the message, they are in the message-user.

A more accurate definition of communication can be found by considering the definitions given by
different authors. Some of these definitions are the following:
Communication occurs when an exchange of messages result in shared meaning Bovee & Thill
Communication is a two way process of exchanging ideas or information between human beings.
Murphy & Peck
Communication is the process of conveying messages (facts, ideas, attitudes, & opinions) from one
person to another so that they are understood. M.W. Cumming
Communication is the process of people sharing thoughts, ideas, & feelings with each other in
commonly understandable ways. Hamilton & Parker
From the above definitions, you might notice that all of them share something in common. All of the
definitions stress that there should at least be two people for communication to occur & there should
also be some kind of message that is intended to be transmitted from one party to another. And, when
people communicate, they express their ideas & feelings in a way that is understandable to each other.
They share information with each other.

To put it in a nutshell, the above definitions of communication call attention to the following five
essential points:
1. Communication is a process
Communication refers to a series of activities to be accomplished in a sequence; it does not refer to
incidental events and transactions among people.
2. Communication is purposeful

1
When senders - receivers communicate the sender originally should have an objective to be checked at
the end of the communication process. Communication is not just the transfer of messages but
purposeful transfer of messages between senders and receivers. Thus it does not refer to incidental
transactions between people
3. Communication involves people
Communication shows the degree of understanding among senders-receivers and how they relate to each
other. Therefore, it refers to communication among people only and the exchange of interpersonal
behaviors among them.
4. Communication involves shared meaning
This suggests that in order for people to communicate, they must agree on the definitions of the terms
and symbols they are using. The symbols used by the sender should be similarly interpreted by the
receiver in order to ensure equal or similar understanding between them.
5. Communication is symbolic
In communication symbols such as, letters, numbers, words, gestures, sound, etc can only represent or
approximate the ideas they are meant to communicate. In other words symbols are not perfect
representations of our ideas. Thus we have to take care in selecting symbols that best approximate the
senders ideas.
Communication is vital to human existence. It is how we pass on to others our thoughts and feelings,
tell them what we want them to do, ask them to help us, share with them our knowledge and experience.
Without communication we would each live as if alone in the world.
1.2. Development of Business Communication
In the past so many years, office technology has improved, and with it has come an array of
developments that make business communication easier, faster, and less costly than before. Office
technology permits information to be produced quickly and easily. For example, a typist using personal
computer as a word processor can produce in one hour a greater number of typed paged with fewer
errors than a typist working with a standard electric typewriter. Moreover, if changes have to be made,
the computer-generated pages can be modified by adding, deleting, or rearranging material without
having to retype everything. Information analysis & data retrieval have been made simpler & faster
through modern office technology. Hence, technology plays a crucial role in the operation of todays
modern offices.

Technology can help us reduce the time spent creating various business documents, as well as enhance
our ability to create professional-looking documents that will get attention from others. In addition,
technology facilitates the nearly instantaneous transmission of written and electronic communication
using duplicating machines and electronic mail.

Some of the communication technologies include:

▪ Computers
▪ Fax machines
▪ Scanners
▪ Satellite networks
▪ Telephone (voice mail, cellular phones, pagers)

2
 ▪ Telecommunication (electronic mail, video conferencing, on-line information services)
▪ Copiers
▪ Software
1.3. Characteristics of Communication
As articulated by Gerald Miller, communication has three basic characteristics: dynamism, uniqueness
and transactional nature.
Dynamism
Every communication event stems from a series of past events and triggers a series of new ones.
Communication is affected by prior attitudes, planned thoughts and people to whom the message is
addressed. It is thus a dynamic phenomenon without beginning, without end, continually responding,
and continually changing.
Uniqueness
Evolving naturally from the notion of dynamism is the concept of uniqueness. No two communication
events are a like because of the change in the sender, the audience, delivery, time situation etc.
Transactional Nature
Communication scholars Wenberg and Wilmot mentioned that in communication all persons are
engaged in sending (encoding) and receiving (decoding) messages simultaneously. Each person is
affecting the other. Each communication transaction involves reciprocal exchanges of feelings,
meanings, ideas and responses.

1.4. Significance and purposes of communication in Management

1.4.1. Significance of Communication
Effective communication is important in a business setting because of the following reasons:
1. It helps organizations achieve their goals. So important is communication that without it an
organization cannot function. Its activities require human being to interact, react communicate. They
exchange information, ideas, plans, order needed supplies, make decisions, rules, proposals, contracts,
agreements. Both within (internal) and outside the organization (external) communication oral or
written- is its lifeblood. A vital means of attending successfully to matters of company concern is
through effective internal communication. It helps increase job satisfaction, productivity, safety, and
profits as well as decrease absenteeism, grievances, and turnover. Messages to persons outside the
company can have a far-reaching effect on its reputation and ultimate success.
2. Businesses growth in size: large businesses have a number of branches within a country or even
abroad. For their health and growth, it is extremely important that the central organization maintains a
thorough and up-to-date knowledge of the various activities at the branch offices, keeps the branch
offices well acquainted with the activities at the center, and maintain some kind of link among the
various branches. This calls for effective and efficient network of communication.
3. Complexity of business activity: business activities have become extremely complex that different
departments handle specialization, planning, production, sales, stores, advertising, financing, accounts
etc. Thus, if these departments do not communicate with one another as well as with management, there
will be no coordination among them.

3
4. Business Competition: business has become very competitive such that products of common
consumption are available in the market in dozen of brands. All these brands do not sell equally well.
Marketing research has revealed that firms that communicate better can also sell better.
5. A valuable job requirement: if you can communicate effectively in speaking and writing, you have
an important, highly valued skill. Especially if your career requires mainly mental rather than manual
labor, your progress will be strongly influenced by how effectively you communicate your knowledge,
proposals, and ideas to others who need or should receive them. Preference for communication skills is
found in the job descriptions listed by numerous companies wishing to employee college graduates.
Some of these requirements could be:
✓ Must be able to communicate with all levels of management
✓ Needs ability to compose effective correspondence
✓ Must have ability to communicate and sell ideas
✓ Will prepare special analyses, research reports, and proposals
Job and career opportunities in which effective communication is the main responsibility are available in
various areas, such as customer relations, labor relations, marketing, personnel, public relations, sales,
teaching, etc. Also, technical and scientific fields need editors, producers, researchers, and writers.
Communication skills are also important in local, state, and federal governments. Even when your work
is mainly with figures, as in the accounting profession, the ability to communicate to those who read
your financial reports is essential.
6. An essential for promotion: the requisite for a promotable executive is ability to communicate. The
ability to write and speak well becomes increasingly important as you rise in an organization. Too often
those who cannot communicate effectively in either oral or written communications remain buried in
lower, dead-end jobs. Members of management spend 60 to 90 percent of their working days
communicating, speaking, writing, and listening. Many surveys and articles have confirmed the
statement that effective communication is essential for success and promotion in business.
As a trainee on a new job, you have opportunities to speak about problems with co-workers and to
submit memos, reports and letters that test your ability to communicate clearly and quickly. A frequent
complaint of managers is the inability of college graduates to make them heard, read or understood.
Your messages can reveal how well you are doing a job, and they help management to evaluate your
fitness for a substantial promotion. For example, imagine that you are one of several highly trained
employees in an organization that requires everyone to submit frequent oral and written reports to
clients or company personnel. If there is an opening for promotion and you each rate about the same
except that you alone can write and speak effectively, then clearly you have the advantage over the
others.
7. A help to meet personal responsibilities: people put things in writing to create a record, to convey
complex data, to make things convenient for the reader, to save money, and to convey their own
messages more effectively. Effective communication- written and spoken- also helps you to better
accomplish various aims in your personal activities. You will sometimes need to write letters, proposals
or reports, or to present your views orally as committee chairperson, club officers, etc. In these roles you
might communicate with public officials, business, industrial, or professional people; or personal
friends. Whatever your purpose, you will usually achieve them more effectively when you apply the
same skills that help you communicate effectively in business.

4
1.4.2. Purposes/Objectives of Communication in Management
Communication is neither transmission of message nor message itself. It is the mutual exchange of
understanding, originating with the receiver. Communication needs to be effective in business.
Communication is essence of management. The basic functions of management (Planning, Organizing,
Staffing, Directing and Controlling) cannot be performed well without effective communication.

Business communication involves constant flow of information. Feedback is integral part of business
communication. Organizations these days are very large. It involves number of people. There are
various levels of hierarchy in an organization. Greater the number of levels, the more difficult is the job
of managing the organization. Communication here plays a very important role in process of directing
and controlling the people in the organization. Immediate feedback can be obtained and
misunderstandings if any can be avoided. There should be effective communication between superiors
and subordinated in an organization, between organization and society at large (for example between
management and trade unions). It is essential for success and growth of an organization. Communication
gaps should not occur in any organization.

Business Communication is goal oriented. The rules, regulations and policies of a company have to be
communicated to people within and outside the organization. Business Communication is regulated by
certain rules and norms. In early times, business communication was limited to paper-work, telephone
calls etc. But now with advent of technology, we have cell phones, video conferencing, emails, and
satellite communication to support business communication. Effective business communication helps in
building goodwill of an organization.

Just as communication is vital for our existence in civilizes society, also it is essential for functioning of
organization. Without communication there would be no organization. Needless to say, communication
is the ingredient that makes organization possible. It is the vehicle through which the basic management
functions are carried out. Virtually all actions taken in an organization are preceded by communication.
The major purposes of communication in organizations include:
Instruction: The instructive function unvarying and importantly deals with the commanding nature.
The communicator transmits with necessary directives and guidance to the next level, so as to enable
them to accomplish his particular tasks. In this, instructions basically flow from top to the lower level.
Integration: It is consolidated function under which integration of activities is endeavored. The
integration functions of communication mainly to bring about inter-relationship among the various
functions of the business organization. It helps in the unification of different management functions.
Information: The purposes or function of communication in an organization is to inform the individual
or group about the particular task or company policies and procedures etc. Top management informs
policies to the lower level through the middle level. In turn, the lower level informs the top level the
reaction through the middle level. Information can flow vertically, horizontally and diagonally across
the organization. Becoming informed or inform others is the main purpose of communication.
Evaluation: Examination of activities to form an idea or judgments of the worth of task is achieved
through communication. Communication is a tool to appraise the individual or team, their contribution

5
to the organization. Evaluating ones own inputs or others outputs or some ideological scheme demands
an adequate and effective communication process.
Direction: Communication is necessary to issue directions by the top management or manager to the
lower level. Employee can perform better when he is directed by his senior. Directing others may be
communicated either orally or in writing. An order may be common order, request order or implied
order.
Teaching/Training: The importance of personal safety on the job has been greatly recognized. A
complete communication process is required to teach and educate workers about personal safety on the
jobs. This communication helps the workers to avert accidents, risk etc. and avoid cost, procedures etc.
Influencing: A complete communication process is necessary in influencing others or being influenced.
The individual having potential to influence others can easily persuade others. It implies the provision
of feedback which tells the effect of communication.
Image building: A business enterprise cannot isolate from the rest of the society. There is
interrelationship and interdependence between the society and an enterprise operating in the society.
Goodwill and confidence are necessarily created among the public. It can be done by the
communication with the different media, which has to project the image of the firm in the society.
Through an effective external communication system, an enterprise has to inform the society about its
goals, activities, progress and social responsibility.
Employee orientation: When a new employee enters into the organization at that time he or she will be
unknown to the organization programs, policies, culture etc. Communication helps to make people
acquainted with the co-employees, superior and with the policies, objectives, rules and regulations of
the organization.
Control: A company uses communication as a way to maintain control over employees and their work
environment. Written human resources policies and procedures dictate how employees are permitted to
act in the workplace. Job descriptions outline the parameters of an employee's job functions.
Motivation: Communication fosters motivation by clarifying to employees what is to be done, how well
they are doing and what can be done to improve performance if its subpar. We saw his operating in our
review of goal-setting and reinforcement theories. The formation of specific goals, feedback on progress
toward the goals, and reinforcement of desired behavior all stimulate motivation and require
communication.
Emotional Expression and Interdependence: The communication that takes place within the group is
a fundamental mechanism by which members show their frustration and feelings of satisfaction.
Communication therefore provides release for the emotional expression of feelings and for fulfillment of
social needs.