Communication Methods in Business. 1500 word essay

What are the different types of communication methods generally used in an organization and for what purposes are formal communication used.

Communication is one of the most important organizational activities that take place on a daily basis and involves the transfer of information from one person/department to another through the use of a communication medium. It is achieved through the exchange of understandable words/context/text between a minimum of two agents that can understand one another. Communication can also be described as a process where information, thoughts and ideas are transmitted between two parties with the goal of mutual understanding via a suitable medium.  There are numerous definitions and types of communication; this paper will, however, focus on formal and informal modes of communication. Communication in organizations may either be formal or informal and usually takes place through the use of newsletters, magazines, bulletin boards, emails, circulars, memos, reports and other physical formats (Johnson, 1993).

According to Johnson (1994), a formal organizational structure comprises people who communicate via official means of retrieving information; this is the traditional vision of most managers. Organizational roles determine office interactions and centres in the authoritative coordination of work (Johnson, 1994). Informal approaches to communication, on the other hand, recognize that social needs and informal interactions underlie communication and as such, communication methods may be less rational. Informal communication, on the other hand, is not based on the type of role occupied by an individual but rather based on a combination of human needs and formal factors (Johnson, 1994).

Formal communication is the type of communication that takes place through the use of pre-defined means of communication set up by management; it is usually a structured type of communication and may be composed as policy manuals, procedural manuals, memoranda, circulars and reports that are handed out to staff members. Formal communication is usually documented and the outputs are generally informational and conducted in a one-way manner. Formal communication can also be described as an official method of communication that involves both oral communication and written communication; it takes place by following the structure of the organizational chart and may be in the form of departmental directives and memoranda (Johnson, 1994).

Formal communication has many advantages when used appropriately. Some important ones are:

  • They help in identifying responsible authorities within the organization
  • They help to define and maintain authoritative structures and communication lines within formal environments

Formal communication, however, comes with a fair share of disadvantages; it tends to be a bit clumsy, time-consuming and restrictive. Excessive use of formal communication methods makes it difficult to establish and maintain relationships within the organization.

Informal communication is, however, a less official mode of communication that takes place amongst colleagues in relaxed settings and environments. It is built around relationships formed in organizations and is achieved through any obvious lines of communication (Johnson, 1994).

According to Johnson (1994), informal communication does not reflect the organizational chart and is usually more personal than formal methods of communication. Examples of this kind of communication involve having job-related discussions with colleagues at work over a drink or calling colleagues in another unit within the organization to assist in handling a problem.

Communication may be oral, visual, graphic, non-human, or non-verbal communication. Formal communication is used in structured business and managerial environments and strictly follows the rules of language. It is also used in meetings, state affairs, government and other official settings.


















Johnson, J. David. 1993. Organizational Communication Structure. Norwood, NJ: Ablex Publishing,

Johnson, J. 1994. “Differences Between Formal and Informal Communication Channels.”. The Journal of business communication (1973) (0021-9436), 31 (2), p. 111.




















Question 2

What are the motivational benefits gained from effective downward communication?

Communication is extremely important in organizations as it provides an efficient way of interacting with employees and addressing organizational concerns. Effective communication can go a long way to increase productivity, reduce grievances and increase the job satisfaction of employees on the job.

Downward communication is a type of top-down communication that involves the use of circulars, instructions, official memos, reports, group meetings and other formal methods of communication within an organization. Downward communication can also be described as the act of passing down instructions to subordinates to ensure that they follow specific instructions in order to complete a task. This type of communication is commonly found in bureaucratic environments where the superiors use their abilities to attain targets by issuing commands and policy directives to different staff working under them. The authority line flows from the most senior management to junior staff within the organizational hierarchy (Anderson & Level, 1980).

Effective downward communication has a significant number of benefits which are enumerated as follows:

  • It ensures that tasks are completed effectively, on time and within the required scope
  • It helps to prepare staff for both major and minor changes that may occur within the organization
  • It clears the air and eliminates misunderstanding(s) by providing clear, specific and direct instructions
  • It gives organizational staff a feeling of being adequately carried along on all projects and activities

A major benefit of downward communication is that it increases efficiency. This is possible because staffs are usually more likely to follow direct instructions from management than their colleagues. The downward communication is usually more effective in giving direct instructions to organizational staff and it ensures that people are constantly provided with an environment that facilitates the accomplishment of organizational goals and objectives. The downward method of communication is pervasive in bureaucratic and traditional organizations (Anderson & Level, 1980).

Effective downward communication can be used to provide employees with vital official information, initiate two-way discussions with management, announce decisions/policies and provide motivation for staff by informing them of the general direction of the company.

In conclusion, downward communication boosts employee morale and provides them with feedback that can help improve efficiency across all aspects of the organization (Anderson & Level, 1980).



Anderson, J., & Level, D. (1980). The Impact of Certain Types of Downward Communication on Job Performance. Journal of Business Communciation , Vol. 17 ( 4), 51-59.





















Question 3

What are the benefits of using MIS at the tactical level?

Today’s organizations are operating in an extremely competitive environment. Consequently, they have to develop strategies that not only ensure that effective business plans are in place, but which also ensure that the right information is made available to Management at the right time. Apart from using intuition, effective managers have to rely on accurate data and intelligence solutions that can aid decision making significantly. This is where Management Information Systems (MIS) come in.


A Management Information system is a combination of internal controls that extend to people, documentation, tools, technologies and procedural information used by management consultants in solving problems. They are different from other types of information systems because they are mostly used in analyzing other operations within the organization in order to make effective managerial decisions (Laudon & Laudon, 1991).


MIS may also be used to refer to a group of information systems that help management in achieving effective decision making. Such systems usually involve decision support systems, knowledge management systems, expert systems and executive information systems. It is a combination of resources that combine technology with business processes to provide timely information to organizations. It can be argued that one of its best uses is the tactical approach. When MIS is used in retrieving, storing, processing and analyzing a wealth of information in order to gain strategic advantage, then it becomes extremely useful to the organization (Laudon & Laudon, 1991).


MIS can also be described as an information system that provides CEOs and Executive Staff Members with reports and access to performance records, sales records and historical records which help them make the key decisions they need to survive within the business environment.


The tactical benefits from MIS are illustrated as follows:


Strategy Support

Even though the MIS itself cannot design and implement strategic plans, it provides management with accurate information on developing strategies, understanding the effects of these strategies and choosing the best alternative at any particular point. MIS can achieve this through the transformation of data to information for effective decision-making. It provides a way for managing huge volumes of data that would otherwise be useless to managers.


Processing of Data


MIS provides a valuable time saving mechanism for collation of vast amounts of information, processing and storage.





MIS can be used as a management by objectives tool; this is a tool that managers and subordinates use to agree on what can be achieved within a set period of time through the use of what is known as the SMART ratio. This means that objectives have to be Specific, Measurable, Achievable, relevant and time-bound. It provides key performance metrics for judging employee performance.


Strategic Advantage

Core competencies are functions that an organization can perform better than its rivals; every organization has at least one core competency. An exceptional MIS can help an organization achieve competitive advantage as it provides an in-depth source of information about the organization and the sector in which it operates.  Improved reporting helps organizations to refine their business processes in line with organizational strategy as needed; MIS provides the platform for improving the supply chain management process. Improved response achieved via MIS implementation also comes with increased flexibility to respond to market demands. This ensures that organizations are constantly ahead of competition

































Laudon, Kenneth C., and Jane Price Laudon. Management Information Systems: A Contemporary Perspective. 2nd ed. New York: Macmillan, 1991.