June 24, 2024

Brad Marolf

Business & Finance Wonders

Four Types of Communication in Business and Marketing

Communication is crucial to the success of any business. A company needs to communicate with its customers and/or clients, as well as other external stakeholders such as suppliers, shareholders, banks, and wholesalers. But internal communication is also vital. At the very least, a business is made up of individuals, all of whom have different job descriptions. As companies grow, they divide into multiple departments, and hierarchies develop.

Management, CEOs, and board members need to speak to and understand each other and have accepted channels of official communication that can be relied on and referred back to. But they also need to keep clear channels of communication open with employees on the shop or office floor, as well as departmental heads, field operatives, and so on. Additionally, once a company is spread out over a wide geographical area, for instance, with a chain of shops or branches across the country or around the world, effective communication becomes both more complex and more essential.

The benefits of effective internal communication

Good communication results in everyone pulling in the same direction. All company employees, at whatever level, know exactly what they should be doing and feel like they are all on the same team. If there are any problems, then they know who to talk to in order to resolve them.

All employees know their supervisors will be available and give them a definite answer. Managers at all levels have the information they need to make appropriate, informed decisions. When a situation arises that needs to be decided at a higher level, they are able to easily pass on the required information so that action can be taken.

The results of poor communication

Poor communication can lead to confusion and low morale, thus affecting productivity. Departments become isolated from each other. One hand is unaware of what the other hand is doing. Time, money, and resources are wasted as tasks are duplicated unnecessarily.

Bad communication can cause a company to run inefficiently. Management may not have accurate, up-to-date information on which to base decisions, and so the company flounders. Employees feel like their grievances are not listened to, and their observations on how they could do their job better are ignored. Inter-departmental rivalries may develop while decision-making is compromised.

The importance of communication

Internal communication can make or break a business. The bigger a company becomes, the more vital it is for internal communication to be efficient and effective. But external communication is also essential to a business’s success, whether in the form of marketing or direct information to and from other parts of the industry. This flow of information dictates how a company is seen and, ultimately, whether the public decides to buy its products or not.

For these reasons, there is a growing demand for communication specialists in business. Studying for a masters degree in communication online at St. Bonaventure University can prepare you for a successful career in marketing, customer relations, content creation, brand management, and many other related fields. Studying online means you can continue developing your professional expertise while gaining a valuable qualification that will advance your prospects in this competitive but rewarding sector.

Upward communication

Business communications are typically divided into four categories. The first of these is upward communication. An example of this communication is reporting to a superior. For instance, an employee to a manager, a manager to a senior executive, or an executive to the business owner. It is how those in charge generally receive information about the day-to-day functioning of the business.

Upward communication may take place in the form of written reports, meetings, telephone conversations, or one-to-one briefings. The information may include data as charts, analytics, or financial breakdowns. Another example of upward communication is the employee or customer survey, which provides information on a wide range of subjects that the company may or may not act upon.

Valuable information

Upward communication is the most common way for management to remain in touch, receptive to staff needs, and informed about the company’s progress. Without it, upper management can become cut off and detached from the current reality of business operations. Upward communication is equally valuable to those further down the ladder, as it makes them feel listened to and able to voice their concerns. It improves job satisfaction and productivity, while management is able to act on issues before they become bigger problems.

This form of communication also gives executives and managers access to a wider perspective on company issues and a potential “idea pool” for future development. If employees are encouraged to make suggestions, a company is more likely to be innovative and find creative solutions rather than stagnate or merely follow existing trends. When workers and management feel that they can communicate freely with those above them, relationships tend to be more harmonious, as opposed to an “us and them” attitude.

Pitfalls and problems

If upward communication is not encouraged, then those further down the chain may try to cut corners, avoid passing on information that could make them look bad, or just create a heavier workload. Management must always be aware that upward communication may just consist of employees telling their superiors what they think they want to hear. Generally, the greater the power imbalance in a relationship, the less reliable communication becomes.

Those with more to lose may be concerned about being completely honest with those above them. In some cases, this may be because they fear censure for criticizing management decisions or think they will be blamed for passing on bad news. In other cases, the protocols of internal communication may result in the information received being compromised or distorted. To avoid this, channels should be kept clear and open without obfuscation or too much “red tape.”

Overcoming barriers

Employees must feel that it is worthwhile to pass on information or suggestions. If past experience or company culture causes them to think that no action will be taken, they are less likely to go to the trouble of “sticking their neck out” and making a report. They may feel uncomfortable talking to management if their superior is seen as a distant or foreboding presence.

To overcome these barriers, every employee should have a direct supervisor they report to regularly and are comfortable communicating with. Ideally, there should be multiple channels available, with regular conversations in which employees are encouraged to voice concerns, make suggestions, and speak their minds openly without fear of being seen as troublemakers or incompetent. Anonymous surveys and suggestion boxes are other ways to overcome employee reluctance and receive honest upward communication.

Downward communication

As the name suggests, downward communication flows in the opposite direction from upward communication. Information passed down from management to subordinates is more likely to be in the form of orders, instructions, new requirements, or reminders of expectations. It is not generally up for discussion or questioning. In some cases, it may just consist of company news such as recent sales figures, new acquisitions, new legal requirements, personnel changes due to retirement, etc.

Although this news may be considered good or bad, it is basically neutral information in the sense that it is just passing on facts. In other cases, management may be communicating the decisions they have come to with the expectation that these decisions will be acted on. Downward communication is rarely used to invite participation in the decision-making process. Rather, it is used to inform those who will carry out the results of the decision of their duties in this regard.

The chain of command

Downward communication may be looked at in terms of a chain of command. Once decisions are made at the top, everyone needs to know what they should be doing. New operational procedures, new targets, and new regulations all need to be communicated effectively, along with clear guidelines on how each department and/or employee is expected to perform.

Different types of information may be given to different departments via different channels for the sake of clarity, confidentiality, and security. It may be that each department or even each individual employee only needs the information relevant to their particular job role. In some cases, it may be useful or helpful to morale to communicate how and why a decision has been reached. In other cases, however, this may be thought irrelevant, with a description of the decision-making process serving only to reduce clarity and potentially undermine authority.

Pros and cons

Clear downward communication allows for responsibility to be delegated and department or branch managers empowered to act effectively within their sphere of authority while maintaining company-wide consistency in terms of expected standards and procedures. It also allows setting of boundaries so nobody oversteps their authority in any matter.

The drawbacks of downward communication are bound up with those of “top-down” management. If employees or even middle management feel that information mostly flows one way and they are expected to follow orders without question, then morale and company loyalty may suffer. Downward communication and upward communication should therefore be equally balanced as much as possible, enabling a two-way dialogue without compromising authority.

Lateral communication

In business terms, lateral communication is between equals within the same company. Rather than moving up and down with all of the power relationships that entails, information moves sideways between departments, managers, and employees of comparable status. In theory, there should be no issues around power or authority compromising communication, allowing it to be frank and free-flowing. If a business is run as a cooperative, then all communication is theoretically lateral.

Lateral communication may take place via emails, meetings, telephone conversations, or informal discussions. Brainstorming sessions and cooperation on the cloud are further examples of lateral communication. This form of communication is ideal for problem-solving, team building, and coordination of activities or resources.

Potential disadvantages

Lateral communication is more organic than other forms, and one of its greatest strengths is that it is less bound by protocol and power relationships. However, the potential disadvantages include the possible creation of factions or cliques that only communicate freely amongst themselves, shutting out other departments or individuals, including those above or below them on the status ladder.

The organic nature of lateral communication can also become too informal, leading to inconsistency, mixed messages, and contradictory information if no permanent record of communications is kept. If all channels of communication are considered equally official, then there may be no definitive source of information or paper trail to follow up on if facts become confused. Action may be taken based on rumor or hearsay, while disagreements and conflicts can easily arise.

If rivalries develop between departments, information becomes a weapon to be strategically withheld or given out with expectations attached. Possession of information can seem to give a kind of false status, where one party feels superior to another based on their access to said information rather than any formal position in the company hierarchy. The free sharing of information between departments should be encouraged, while keeping written records of lateral communications is advised, whether in the form of minutes or copies of memos.

External communication

External communication is most obviously relevant to marketing, as it describes how information is conveyed to parties outside of the company. These parties may include clients, customers, government or regulatory bodies, the media, other industry players, suppliers, retailers, and more. Marketing is one type of external communication, but other examples fall under business-to-business (B2B) communication. Any communication directed outside of the company is external communication.

External communication creates brand identity and presents a positive image of the company to those it deals with and the general public. Building strong relationships with customers and within the industry is essential for growth, and it starts with effective external communication. For this reason, external communication needs to be tightly controlled and supervised.

Context is everything

While unauthorized statements from company employees should be strongly discouraged, a culture of transparency is increasingly seen as a sign that a company is trustworthy, honest, and has nothing to hide. It’s certainly always better to behave impeccably rather than attempt to suppress or spin information after the fact. Nevertheless, sometimes statements can be misinterpreted, mistimed, or otherwise landed wrongly.

For this reason, it’s recommended that all external communications be carefully vetted and only made through the appropriate channels. The advice “read the room” is also appropriate here. Know your audience and be appreciative of the wider context in which your words or images will be disseminated and absorbed. Many companies make the mistake of adopting a “one size fits all” approach to marketing, which is unnecessary and unhelpful.

In today’s connected world, communications intended for a specific demographic can quickly reach a wider public than was intended, so bear in mind the diverse audience that you may unwittingly reach. It is no longer safe to assume that only those who understand the immediate context of communication will receive your message. Take care of tone and imagery, and ensure that any advertising or promotion cannot be misunderstood in a way that would accidentally give offense or the wrong impression.

Marketing and communication

Marketing is not just about communicating with the general public. It’s also dependent on effective internal communication to make sure that the right message is being put across and that all channels have a consistent look and tone. Identifying a target audience, working out the best way to communicate with them, and responding to new developments are all critical tasks that rely on a constant exchange of information within the business or marketing department.

In a marketing office, members of the team need to know the benefits of the product they’re promoting and the key talking points to focus on. Downward and lateral communication can be used to ensure that information is available and understood at all levels. These forms of communication can also be effective in motivating employees to hit targets and deadlines and increase overall productivity.

Upward communication channels should also remain open so employees with special insights or who simply have a great idea can pass these on to their supervisors. The marketing department will also communicate upwards to the head office or the equivalent with status and progress reports, insights, and responses from the media and general public.

Even before a marketing campaign begins, the department will use multiple methods of communication to research the project. Surveys and focus groups use all four types of business communication to elicit information about the target demographic for a product.

Traditional marketing is a prime example of external communication, but it’s also a form of downward communication in that information is passed down from the marketing department to the general public. But modern marketing methods also use upward communication in the form of encouraging conversations on social media or harvesting information using loyalty cards and other means. Word-of-mouth promotion and other organic marketing methods can also be considered forms of lateral communication. In these ways, all four types of business communication can be effectively used as part of a wide-reaching marketing campaign.