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Business communication and its types



What is business communication?

According to Little (1990), communication is the process by which information is passed between individuals and/or organisations by means of previously agreed symbols (words, gestures, drawings etc.). In light of this definition, business communication is simply the sharing of information between people within and outside an organization for commercial purposes.

Communication involves three important elements i.e. transmitter, recipient, and medium. While transmitter is the sender of the message, recipient is the receiver of the message. Medium is the method by which the message is shared between the transmitter and the recipient.

Types of business communication

Business communication can be divided into two types i.e. internal communication and external communication. Organisations use different methods of communication for both types of communication.

Internal communication

Internal communication refers to any type of communication within an organisation. This type communication is very important for any organisations to run and maintain day-to-day operations.  Organisations usually use both oral and written methods for internal communication. Internal communication is of three types i.e. upward, downward, and horizontal.  It should be mentioned that both upward and downward communications are collectively called vertical communication.

  • Upward communication

It is a very important type of internal communication whereby information is passed on from employees to management. Management often needs feedback from employees to make both strategic and operational decisions. Upward communication helps management obtain feedback from subordinates/ employees. It also helps them engage employees in the decision-making process.

  • Downward communication

Since employees often need instructions from management to perform different tasks, downward communication becomes very important in any organisations. Downward communication is where information is passed on from management to employees.  Managers may simply brief employees orally or write memos to communicate with employees.

  • Horizontal communication

Managers sometimes need to communicate with other mangers or people of similar rank in an organisation. When communication takes place between people of similar ranks, it is called horizontal communication. This type of communication helps organisations solve problems, build harmony, and share good practices across the board.

External communication

External communication takes place when an organisation communicates with people outside the organisation. For example, managers often communicate with suppliers. Communication with customers is also an example of external communication. Organisations usually use the Internet, print media, radio, television and some other methods to communicate with customers. External communication is mostly formal, and therefore, requires formal communication.


In a nutshell, communication refers to sharing information from one person or groups of people to another. Organisations need to make their communication effective as it improves business efficiency, solves problems, and helps run business operations as per the organisational expectations.

The article publication date: 25 February 2017

Further reading/references

Little, P. (1990) Communication in business, 3rd edition, UK: Pitman

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Author: M Rahman

M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.

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