Importance of Effective Communication

Last Updated: 16 Mar 2021
Essay type: Process
Pages: 4 Views: 105
Table of contents

In this age of competition communication is the number one problem of the management. Competition, complex methods of production, large scale operations and specialisation in production functions have increased the importance of communication. Without effectivecommunication a manager cannot perform his duties well. Communication is as essential to business as blood is to the human body. Success of the communication system affects the successof business. The following points will prove its importance in business:

  • Smooth Working of a Business Firm Communication is necessary for the successful smooth and unrestricted working of anenterprise. All organisational interaction depends upon working of an enterprise. All organisationalinteraction depends upon communication. The manager co-ordinates the human and the physicalelements of an organisation into an efficient and working unit that achieves common objectives. Beit an activity of purchase or sale or production or finance it is the process of communication thatmakes cooperative action possible.
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  • The internal and external communication process of anorganisation decides the various activities to be done and various objectives to be achieved. “Communication is basic to an organisation’s existence from birth of the organisation through itscontinuing life when communication stops, organised activity ceases to exist. ”
  • Basis of Managerial Function Communication plays an important role in discharging the various functions of management. No function of management is possible without the communication process.

It's importance in performing the various functions is as follows


Planning the most important among the functions of management, requiresextensive communication among the executives and the other personnel. Communication isimportant in executing a planned programme and then controlling the activities of the personnel with the help of feedback information.


Organisation is the second important function of management whichdecides the various activities of an organisation, divides them into workable units,delegates authority to perform the.

For this purpose, communication is a must becausedifferent persons, departments and group come to know their powers and jurisdiction onlythrough an effective means of communication.

Direction and Leadership

Direction and effective leadership requires an efficient systemof communication in an organisation. A good leader can direct or lead his subordinatesonly when an efficient system of communication is present. It brings both the leader andthe subordinates in close contact with each other and removes misunderstanding if any.

Motivation An efficient system of communication enables management to change theattitude of the subordinates and to motivate, influence and satisfy them. Most of theconflicts in business are not basic but are caused by misunderstood motives and ignoranceof facts. Proper and timely communication between the interested parties, reduces the points of friction and minimises those that inevitably arise.


The present day big organisations, designed on the basis of specialisationand division of labour are constituted of a large number of people. In order to achieve thedesired objective, it is very necessary to co-ordinate the efforts of labour engaged in thevarious activities of production and the organisation. Co-ordination requires mutualunderstanding about the organisational goals and the mode of their accomplishment; andthe interrelationship between the works being performed by various individuals.


Communication aids in controlling the activities of the individuals departmentand groups. The facts standards and information are communicated to the concerned partiesand they perform their respective obligations according to the standards set forth in the plan. . Maximum Production at Minimum Cost Every organisation aims at getting the maximum output at the minimum cost and for this purpose it requires an effective internal and external communication system. In the external field,and efficient communication system helps in improving public opinion having contacts withgovernment departments and getting market information in order to achieve the primary goals.

Prompt Decision and its Implementation In order to make prompt decisions, fact collecting process is necessary. Information must be received before any meaningful decision and for this purpose communication is a primaryrequirement.Again to implement the decision effectively its communication to subordinatesconcerned is essential. Thus, decision-making and its implementation require and effective systemof communication.

Building Human Relations Man is the most active and effective factor of production and good human relations are the basis of cooperation and industrial peace that requires good working conditions and work-environment. As we have discussed earlier communication is a two-way traffic which helps promote cooperation and mutual understanding between the two partners of an organisation.Efficient downward communication helps the management to tell the subordinates what theorganisation wants and how it can be performed. On the other hand upward communication helpsthe workers in putting their grievances and suggestions and reactions to the policies, before themanagement.

Job-satisfaction and Good Morale Morale is the human element that motivates a man to work in the right spirit. Goodcommunication removes the possibility of misunderstanding among the parties concerned. Workersknow what they have to do and how it creates a sense of cooperation among them. It increases themorale of the workers and each worker will have job satisfaction.

Avoids Illusion While passing through various stages information may be distorted by interested partiesand many create illusion and misunderstanding among persons. Illusion is the great enemy of communication. An efficient system of communication aims at removing illusions andmisunderstanding by communicating facts and figures.

Contacts with External Parties Communication is essential not only for the internal management of the organisation but italso helps contacts with the outside world.Contact with outside agencies such as customers,associations, other manufacturers, advertisers, suppliers, trade unions, research councils andinstitutions, etc. are necessary for furthering the interests of the organisation. It increases thegoodwill of the firm and helps in creating a favourable public attitude towards the organisation. Steps to Make Communication Effective In order to remove barriers to communication an open door communication policy should be prepared and followed by managers at all levels. The superiors in the organisation must createand atmosphere of confidence and trust in the organisation so that the credibility gap may benarrowed down.

Major efforts in this direction are:

  • Two-way communication The organisation’s communication policy should provide for a two-way traffic incommunication upwards and downwards. It brings two minds closer and improves understanding between the two parties the sender and the receiver. A sound feedback system should be introducedin the organisation so that distortion in and filtering of messages should be avoided. There should be no communication gap.
  • Strengthening Communication Network The communication network should be strengthened to make communication effective. For this purpose the procedure of communication should be simplified, layers in downwardcommunication should be reduced to the minimum possible. Decentralisation and delegation of authority should be encouraged to make information communication more efficient, throughfrequent meetings, conferences and timely dissemination of information to the subordinates.

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Importance of Effective Communication. (2017, May 09). Retrieved from

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