10 Reasons Why Communication Is Important in Business
table of contents
What is Business Communication?
10 Reasons Why Communication Is Important in Business
Types of Business Communication
All organizations must maintain open lines of communication with their clients and staff, both internally and externally. A firm will find it difficult to carry out its desired activities without good communication, so a well-organized communication network is essential for corporate success. Therefore, in this article, we have covered 10 major reasons why good communication is vital for business.
What is Business Communication?
Business communication refers to the exchange of information either internally (within an organization) or externally (between two different organizations, parties, etc.).
It includes giving feedback, suggesting ideas, sharing opinions, discussions, negotiations, client pitches, planning strategies, and so on. All these together constitute the essential elements of the communication process in a business.
Because business communication is goal-oriented, it is often formal, crisp, factual, and practical in nature. It can be verbal or written, in person or remote, including via channels like telephone calls and video conferences.
Yet one of the most effective channels of business communication is email. In fact, about 86% of professionals prefer this medium. One reason for email’s popularity is the ability to interact with recipients in bulk. Today, the market abounds in email marketing services that allow automating bulk email campaigns. For instance, with tools such as Snov.io, you can send drip email campaigns to many contacts and still be sure your messages will be highly personalized.
10 Reasons Why Communication Is Important in Business
People are the foundation of any business — be it the managing directors and executives or employees, sellers and buyers — so no business will thrive without good communication between these groups. But what are the specific benefits of prioritizing business communications?
Take a look at these top ten reasons why communication is important for all corporations and startups, as well as world-leading organizations.
Helps Exchange Meaningful Information
Sharing information is crucial to the successful working of any business, be it informing your employees of the required facts, policies, and procedures, sharing important information through business presentations, or connecting with your customers. A quick movement of information must take place within any organization to ensure multi-directional communication.
Without this exchange, it’s impossible to imagine any business thriving and increasing profitability.
2. Results in Efficient Planning
Communication in business management paves the way for proper planning and implementation of structure and order within a company.
Every business has its own characteristics and needs and being aware of the realities affecting your company aids in making plans that will lead to its growth. Taking advice from people outside your organization like marketing experts, finance consultants, legal advisors, etc. also helps with implementing the right strategies.
All of this is best achieved when different hierarchical levels within the organization and external members communicate continuously and in an efficient manner.
People collaborating together
3. Ensures Better Functioning of a Business
Effective communication helps to ensure coordination among the team members and keeps everyone on the same page and well-informed.
The various departments within an organization work together, coherently, to achieve a shared goal. Team leaders know where their teams stand, their respective goals, and the required steps to be taken to reach them. The employees understand their duties as representatives of the company and how to tackle their issues.
In this way, communication in business guarantees everyone within a company can carry out their respective tasks without difficulty.
“Communication amongst team members is now more important than ever given many teams are working remotely,” says Matt Buchanan, Chief Growth Officer at Service Direct. “Whether it’s through communication platforms like Slack or Microsoft Teams, being able to quickly and efficiently communicate with colleagues ensures teams are able to function better in a remote/hybrid work environment.”
4. Eliminates Misunderstandings and Solves Problems
Two-way communication is the essence of any harmonious relationship — whether it’s manager-manager, executive-manager, manager-employee, or employee-employee.
Human resources are the driving force of any organization. As a human resource manager, providing a healthy environment is important for bridging the gap between them and the rest of the organization, while at the same time boosting their productivity. It creates room for solving disagreements and removing conflicts and misconceptions. With the right set of skills and knowledge, you can become an HR manager and help drive the organization to success.
Woman typing on laptop
Another significant use of communication for businesses is that it helps tackle challenges.
For example, if a new employee is confused about how to create an invoice, they might not gain clarity on the process unless an experienced peer or senior provides the necessary guidance. In this way, establishing business communication is of paramount importance.
5. Builds Reliable Teams
Valuing communication is synonymous with valuing your employees in a business. When the people in your company are aware that they are heard and have the right to express their thoughts and opinions, they are driven to deliver their best. This passion is ideal for building strong and reliable teams that will lead your company to success.
6. Strengthens Customer Relations
The scope of business communication is not limited to the internal elements of your organization. Your customers are the reason why your business exists and ensuring their needs are met is essential.
This can be accomplished by taking note of their feedback, conveying messages through explainer videos, informing them about your latest releases or simply showing your loyalty towards them. Knowing what kind of customer service you must provide or the improvements your products need to undergo is only possible when you know your customers well.
7. Improves Leadership
While employees are the mediators between a company and their customers, the leaders take care of the investors, shareholders, executives, and so on. In short, they have to work with various groups of people, handling different roles for the smooth operation of the company.
Having a clear understanding of switching communication styles becomes crucial here. While you can speak in a friendlier or more commanding tone with your employee, conversing with a director demands a formal touch. In fact, the code-switching required at work is precisely why the email template generator Parakeet offers a casual and formal version of each of their emails.
Moreover, it’s the leaders who choose and provide direction to a company — such as the new objectives, guidelines, and procedures to follow. To be able to lead a business requires a substantial amount of knowledge in the field, which is attainable when one’s networking is solid.
8. Achieves Employee Satisfaction
Good communication helps make your employees content, happy and motivated. Having feedback from superiors adds to their growth and being able to provide feedback to the company makes them feel respected.
With proper communication, employee success and retention rates reach new highs. This further strengthens the labor-management relationships, which is another hurdle in running a successful business.
Woman laughing
9. Helps in Decision Making
It’s easier to make the right decisions when you’re informed about the current situation of your company. Whether you need to recruit more managers, dissolve a team, create a new campaign or update your products/services to beat the competition, well-communicated facts lead to timely and informed decisions.
10. Creates Scope for New Ideas, Suggestions, and Improvements
Involving all employees in the strategy development process introduces new opinions, understandings and perceptions on a subject. This not only prepares the employees for the future but allows unique and interactive brainstorming sessions.
The result is the multi-dimensional growth of the company. Employees get to share their stories and eventually build trust with their superiors and the company as a whole. The managers or team heads learn about new views on a topic and points they might have missed or overlooked. Ultimately, the company is more likely to achieve its short- and long-term goals.
Types of Business Communication
Depending on the people involved, there are two main types of business communication:
Internal Communication
Internal communication refers to the information shared within the organization without any involvement of an external person. This is the kind of communication aided by tools like help desk software.
It can further be categorized into four types:
Downward Communication
Old fashioned phones
Information flowing from the top level of the organization’s hierarchy to the bottom-level workers is called downward communication.
Example: executives or CEOs sharing facts with department heads or managers guiding subordinates, etc.
Upward Communication
When the flow of information is upward, i.e. from the bottom level towards the higher levels.
Example: workers giving ground reports to the supervisors or managers suggesting improvements to the executives, etc.
Horizontal Communication
Horizontal or lateral communication occurs when the same level of employees exchange information.
Example: department heads discussing their opinions on a project or a board of directors holding a meeting.
Diagonal Communication
Communication taking place between a higher/lower level of one department and a lower/higher level of another department respectively is called diagonal communication.
Example: head of the design department instructing the content managers.
2. External Communication
Any communication between the workforce of the organization and external individuals is termed external communication.
Some examples include a customer consulting an employee, managers communicating with clients and suppliers, executives networking with industry experts, etc.
Some external communication formats include annual reports, magazines, brochures, whitepapers etc.
Man holding a report
Conclusion
Human beings are social creatures and have the need to interact with one another using different forms of communication, be it oral or written. The same principles apply in any business as it utilizes human resources.
Business communication is a key ingredient in the running of a company. The members of a business must communicate with one another to ensure all operations are undertaken smoothly and the flow of information is effectively carried out.
Author Bio:
Aditya is a certified SEO trainer and has worked with SaaS companies and startups to enhance their digital marketing presence. He is also a fan of ahrefs.
