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Business communication can be broken down into two major categories: internal and external.

Internal channels involve company-wide communication, such as meetings, voicemail and memos. External channels connect your company with the outside world, especially to your customers. Now, we'll focus on internal channels of communication and we’ll discuss external channels of communication later on in Marketing and Operations.

The purpose of business communication is to ensure messages are properly delivered, received and understood. It’s a simple process, so how is it that something so simple can break down so often? The answer is that in most businesses there are no standards in place to guide the process. If people need to communicate something, they choose a method of communication and go to it. They might send out a memo, they might hold a meeting, or they might leave a voice mail message. Who knows? It’s much the same when people receive messages. How, when and if they respond is also left up to them.

The problem with this unstructured approach is that it breeds uncertainty. How often have we heard (or possibly said), “We had a breakdown in communication?” In an age when business moves at the speed of electrons, communication problems are no longer an acceptable excuse, yet communication problems are one of the primary challenges facing businesses today.

Every system in your business makes use of some type of communication. In fact, communication is the means of recording and relating systems. It's the underlying engine that guides and propels your systems, and the quality of your communication will limit or enhance the quality of your systems.


"When people talk, listen completely. Most people never listen."

- Ernest Hemingway

How does communication happen in your business?

Do new ideas get passed onto the people who need them? Is everyone kept up to date with your current business developments and plans? Is there a process to quickly and efficiently send information to those who need it? If anyone has a question, does he or she know where to get the answer? Do employees have to wait for the answer or can they get it themselves?

There are a vast number of ways that communication can happen in your business, each with their own strengths and weaknesses. For example, it would be inappropriate to promote an employee by e-mail or memo. That should be done in a face-to-face meeting. On the other hand, it would be a huge waste of time to meet privately with each employee to remind them that next Monday is a holiday. Something that trivial could be put in a monthly newsletter, or sent out as group e-mail.

tin can phone

Communication Flows

The flow of communication through your business can be broken down into four basic categories: communication; upward communication; horizontal communication; and informal communication.

Downward Communication is the flow of communication down your organizational chart, from a manager to those they are managing.

Examples of downward communication include:

  • Setting goals
  • Making decisions
  • Delivering information
  • Handing out assignments
  • Giving feedback
  • Offering training
  • Explaining policies and systems

Upward Communication is the flow of communication up your organizational chart, from an employee to his or her manager. Unfortunately, this type of communication is typically lacking because managers fail to ask for it and employees are sometimes too intimidated or unmotivated to offer it.

Examples of upward communication include:

  • Giving progress reports
  • Expressing concerns
  • Offering ideas for improvement
  • Offering new ideas
  • Making requests for clarification
  • Making requests for help

Horizontal communication is the flow of communication across your organizational chart, from one employee to another. Horizontal communication supports most of the real work in a business. Teamwork, for example, is made possible through horizontal communication. Unfortunately, this is also where the majority of communication errors occur. Why? Despite its importance, it's usually the least organized. Examples of horizontal communication include:

  • Coordinating activities
  • Receiving advice
  • Giving advice
  • Offering support
  • Collaborating on projects

Informal Communication is the unorganized free flow of communication throughout your business. Rumours, for example, travel this way. Typically, this type of communication is ignored by management because it tends to sit outside the company’s formal structure, nonetheless its impact on your company can be substantial.

Informal communication cannot and should not be fully controlled by management, even though it serves an important function in your business. You can, however, help to reduce its harmful effects indirectly by properly managing your company’s formal lines of communication. If your employees feel properly informed, they'll be less inclined to engage in speculative gossip and more inclined to make their conversations productive.

Examples of informal communications include:

  • Gossiping about individual employees
  • Rumours about the company’s future
  • Sharing ideas through casual conversation
  • Sending and receiving e-mail jokes
  • Social interaction between employees, both in and out of the work environment

Communication Objective

The question is not if you should organize your business communications, the question is how to do it best. Your communication strategy should act as your guide to designing communication systems that suit your company’s needs.

Write out your communication strategy in the space below.

Internal communications will be simple and clear. There will be a constant goal to reduce wasted time while increasing accuracy. To this end, electronic methods will be used whenever practical.