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What is effective communication and its importance

Updated: Jun 18

Communication happens when information is passed from one party to another. They could be in either form;

  1. Verbal communication - telephones, teleconferencing

  2. Written communication - texting, email, memos

  3. Visual communication - images, charts, diagram

In business, communications can be categorized as internal and external communication. Internal communications involve communication within the organization i.e communicating between employees, while external communications involves communicating with individuals outside the organization, such as customers, suppliers, governments, investors etc.

Internal communications can be either vertical or horizontal. Vertical communications involve communicating from the top of the organizational hierarchy to the bottom level, and vice versa, while horizontal communications involves communication between departments and colleagues at the same level of the hierarchy.

Communications can also be one-way or two-way. Two-way communication involve direct feedbacks from both or multiple parties in communication. They usually happen real-time in meetings, tele-conferencing, tele-conversation, but can also take place via email. One-way communication will be information passed without a way to provide feedback, i.e posters, news, newsletters, advertisements, train schedules.

Communication that is endorsed by its sources are known as formal communication. While informal communication are passing of information, usually conversation between colleagues and individuals that does not represent official business decisions.

In certain situations, communication is best conducted openly to anyone without restriction. Open communication are likely one-way communication like train schedules, where can be accessible by anyone. While close and restricted communication involves controlled access to information by certain parties of interest.

Communications using technology are such as emails, fax, text messages and video conferencing.


  1. Methods of Communication

  2. Effective Communication

  3. Communication Barriers


  1. Identify and explain two suitable methods of communication a firm might use with manufacturers in a country if it decided to purchase supplies from them. (6 marks) May/June 2019/13

  2. Do you think using communication methods based on information technology (IT) is the best way for a large business to communicate with its suppliers? Justify your answer. (6 marks) May/June 2020/11

  3. Outline two reasons why effective communication between RGP’s employees and customers is important. (4 marks) May/June 2020/13

  4. Identify and explain two ways STC could improve communication between managers and workers (6 marks) Feb/March 2018/12

  5. Identify and explain two possible barriers to communication between S&V and its suppliers. (4 marks) Oct/Nov 2019/13

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