15 Importance of Communication in Business

Communication is the central point to operating all business activities and all managerial activities which are communication-centric. So detail discussion about the importance of communication in business is given below:

Table of Contents

Importance of Communication in Business

Barnard said, “Communication is the central point to operate all business activities and all managerial activities which are communication-centric.“

Such a definition signifies the use of communication in business. Some of those are as follows.

1. Achievement of goals

Every organization works to achieve its own goal. To do such, the first and prime objective of communication is to establish the link between management and employees so that predetermined goals may be achieved through their combined effect.

2. Exchange of information

In order to define and explain the predetermined goal of an organization, there must be an exchange of information from top to bottom of the organization, to accomplish the goal; both internal and external communication is required.

3. Enhancement of employee Skill

Human resources may be skilled, semi-skilled, or unskilled. Skilled and efficient human resources are considered to be the assets of an enterprise.

To transform human resources from unskilled to semi-skilled and from semi-skilled to skilled requires training. Such training is implemented through effective communication.

4. Formulation and execution of the plan

In this age of competition, every organization formulates its plan in such a way, so that it can edge over competitors in terms of price, quality & service.

So, the development and thereafter execution of plans involve extensive communication.

5. Direction to the subordinates

For better job performance, subordinates require specific instructions and orders from their respective bosses.

Communication is the link that creates a network between boss and subordinate to share the message and make proper feedback.

6. Facilitating joint effort

Management alone is helpless to achieve its goal. It requires the co-operation of all employees for the purpose.

Communication flows to create joint initiatives between management and the employees.

7. Motivating employees

Motivation acts as an energizer. It makes and keeps employees active. Motivation must be situational i.e. persons at different levels require different types of motivation. Such motivation is accomplished through communication.

8. Increasing job satisfaction

If an employee is not satisfied then it affects his performance. So, causes of dissatisfaction are to be identified and steps are to be taken to solve the problems through financial or non-financial incentives. In all cases, communication is needed.

9. Maintaining effective labor relations

Good management-labor relation is a prerequisite for achieving target results. Any sort of confusion or misunderstanding may hamper the joint effort.

Close relations should be developed between employers and employees. Such a situation is created when both interact or communicate formally or informally.

10. Maintaining co-operation and coordination

An organization consists of various departments that need coordination because the activities of one department are dependent on another department.

While all officers and employees need mutual cooperation for proper functioning, Communication facilitates such purpose.

11. Making the employees aware of changes

Everything changes due to time and changes should be considered to keep pace with the moving world.

So, employees must be informed in advance regarding any future change so that they are not likely to resist the change. Communication is a powerful means here.

12. Investigation & marketing research

In this competitive age, every business wants to satisfy its customers and consumers.

So, a business makes research regarding taste, choice & demand of buyers as well as the impression of the market and without any communication, investigation, and marketing research is impossible.

13. Advertisement and Circulation

Due to the advancement of technology, any piece of public information can be circulated within a second.

Every Organization is trying heart and soul to create and expand its market by defeating its competitors.

Communication aids an Organization to advertise and circulate its product and service to the mass people and therefore helpful for market creation.

14. Development and Implementation of Internal Control Structure

Internal control structure (ICS) sets the tone for an organization. It helps in the proper functioning of all activities and the effective utilization of resources.

To formulate and implement ICS, there is nothing alternative to communication.

15. Connection with stakeholders

Shareholders, creditors, suppliers, regulatory bodies, and the government are interested parties called stakeholders.

They have different interests in a business such as

Shareholders want regular payment of dividends at a better rate,
Creditors want better servicing of their extended credit,
Regulatory bodies want compliance with various rules & regulations of the state etc.

Each and every interest of the stakeholders has fulfilled the interims of active communication.

A flowchart about the importance of communication in business given below gives a glance idea of the importance of communication in business. Click on the image for a large view.

The overall development is the ultimate goal of every organization arid communication should be directed toward that goal.

Communication is adapted to the needs and interests of the receiver in order to cause the receiver to react in a manner that accomplishes the purpose of the sender.

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