Importance of Communication in Business

Communicating effectively in speaking and writing extends across all areas of business,
including management, technical, clerical and social positions. And now in today’s world, the
phenomenal growth of internal trade creates the need to emphasis more on communication skills.
The importance of communication is explained below.

• Communication is the lifeblood of every organization. Its main purpose is to effect

change to influence action. Organizations cannot function without open and effective
communication. All business activities require employees to exchange information, ideas,
plans; order needed supplies; make decisions, rules, proposals, contracts, and agreements.
• It’s all about the bottom line. The “bottom line” is a company’s net income after all
expenses have been paid out of its earnings. The bottom line determines whether or not
you stay in business. And without effective communication, you won’t. Whether you’re
running your own business, or just starting out on your business career, you’ll need to be
a great communicator! According to a recent study, companies with good communication
practices are three and a half times more likely to outperform their competitors. A
business’s ability to compete may be the number one reason to promote effective
communication.
• Success of Business. The success of any business to a large extent depends on efficient
and effective communication. It takes place among business entities, in market and
market places, within organizations and between various group of employees, owners and
employees, buyers and sellers, service providers and customers, sales persons and
prospects and also between people within the organization and the press persons. All such
communication impacts business. Done with care, such communication can promote
business interests. Otherwise, it will portray the organization in poor light and may
adversely affect the business interest. Effective communication to people outside the
organization can help create a good reputation and have a positive impact on its ultimate
success.
• Relationship Building. Today's business world relies on relationships in so many ways.
Whether you are recruiting a talented, new manager or negotiating a new contract with a
vendor, relationships are the foundation of success. Communication is the foundation of
strong relationships. An example of creating a foundation for success could be to send a
prospect a note on his birthday without trying to sell him anything. The language in an
email to a vendor who has increased prices could cause the vendor to come to the
negotiation table or to walk away from the deal.
• Builds an effective team. If open communication within a workplace is encouraged, a
more cohesive and effective team will emerge. Good communication within a team also
tends to boost employees’ morale. When employees feel that they are well informed of
the company’s direction and vision, they will feel more secure within their role. When
team leaders are effective communicators, they inspire workers to reach for a common
goal. They make sure everyone knows their responsibilities and how to perform them.
With an open dialogue, employees pitch in when others in the organization need their
help, and know when to ask for help, in return.
• Prevents conflict. When there’s open and honest communication, everyone’s on the
same page. Sure, there may be disagreements, but they’re less likely to turn into problems
when differences of opinion are given the outlet and respect they deserve. If people are
 good communicators, they listen well and don't overreact. This helps reduce and prevent
conflict in the workplace, which otherwise, could create problems. Co-workers can work
out a disagreement and still be respectful, and potentially could remain friends.
Employees who are able to listen to customer issues and communicate solutions without
becoming defensive, accusatory or otherwise negative, are good ambassadors for the
company. When consumer conflicts are positively resolved, consumer loyalty goes up.
• Managing employees. When managers are effective communicators, they are more able
to inform staff adequately of their responsibilities and what is expected from them. Good
communication skills also help managers to provide constructive feedback to their staff,
build better relationships, and understand personal goals that staff may wish to work
towards. This helps in achieving business goals effectively.
• Customer service relies on good communication. If you don’t know what your
customers want, how can you give it to them? Whether you sell products or services, you
need to listen to the needs of your customers, answer their questions, and provide answers
that make sense to them. And when customers turn to social media to communicate, you
need to be quick, attentive, and polite.
• Facilitates innovation. When employees feel comfortable in openly communicating new
ideas, cooperation and innovation will always be high. In addition, if staff are unable to
convey their ideas due to limited communication skills, the ideas will not be implemented
to its full potential. In this scenario, employees get the opportunity to share what isn't
working in operations procedure or to discuss new ideas for sales promotions.
• Contributes to growth of the company. A lack of communication can lead to the
collapse of any organization. Without proper marketing and communication internally
and externally, most organizations will struggle to survive. Communication can also lead
to productivity and helps to avoid unnecessary delays in the implementation of policies.
• Ensures transparency. When regularly communicating both internally and externally,
organizations/businesses remain more transparent. This is important in building trust in
your brand, in your services and also internally when it comes to the trust that employees
have in higher management. Observing current scenario in Pakistan, there is a heavy
emphasis on business transparency and corruption control. Businesses with transparent
assets, investments and functions are safer than the non-transparent ones. This largely
effects the image, growth and profitability of a business.
• Communication costs. Poor communication can cost an organization time and money.
Time spent just in written tasks can occupy much of the working day. Ineffective
communication that alienates customers are more expensive than the effective one
because it destroys goodwill. Furthermore, in fields such as aviation, construction,
medicine, mining, oil drilling and others, poor communication can result in loss of life
and money.