Role of Communication in a Business Organization

by Nicole Papa; Updated September 26, 2017
Communication in a business organization provides information, direction and motivation.

According to the Wisconsin School of Business, all business is built on people who effectively communicate. Communication is the lifeblood of a business organization that sends and delivers messages to employees, the public and other businesses. When communication is delivered effectively, it increases employee satisfaction, customer retention and improves a company’s public image. Ineffective communication in a business organization can cause confusion, misunderstandings and makes for an unpleasant working environment.


Communication is the process of exchanging messages through symbols, words or gestures. A message is sent and received by another person or audience, and is interpreted differently depending on the audience's perceptual filters. Business organization is the system and procedures put in place in a company to help define, guide and motivate employees to concur with the organizational goals.


Communication in a business organization serves different purposes. It is the medium through which messages are sent. The messages sent may be a memo to employees, an advertisement intended for the public or a voicemail left for an executive of another company. Communication also serves as a listening and feedback agent. Communication allows employees and customers alike to share their thoughts, ideas and concerns about a particular matter. Communication in a business organization also educates, trains and develops employees to improve productivity and efficiency.

Types: Tall and Flat

According to, communication in a business organization is categorized into two types: tall and flat. Tall organizations have multiple levels of hierarchy that limit the amount of communication between leadership and subordinates. Feedback is not encouraged, and employees are expected to take directives and fulfill them without question. Flat organizations are designed to incorporate leadership and subordinates in problem-solving, decision-making and brain-storming. These types of organizations thrive on open communication between departments and management.

Types: Internal/External

The role that communication plays in internal communication is for information, training and vision. Internal communication is any message sent within the company. This can be in the form of an email, a company meeting or a discussion group. The role of communication in external communication is to promote, persuade and maintain a business' positive image. External business communication is any message sent from a company to an audience outside of itself. This is commonly accomplished through public relations, marketing and advertising efforts.


A communication assessment can help a business organization identify areas of communication weakness and strength. The assessment is intended for use to implement positive change in the organization in order to make communication more productive and effective. A communication assessment is performed by an external company, such as an organizational communication consultant, and is a combination of surveys, interviews and observations.

About the Author

Nicole Papa has been a freelance writer since 2004 with a focus on SEO and Internet marketing. She has written for and JOLT! Marketing. She graduated from the University of South Florida with a Bachelor of Arts in mass media communications, and from the University of Texas with an associate degree in theater performance.

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