The four communication components are encoding, decoding, transmission medium and feedback. The sender of a personal or business communication message encodes and transmits it through one or more media to the receiver, who decodes it and responds by providing feedback. In business, effective communications gets deals done, allows managers to motivate their employees and helps companies interact with their stakeholders. Poor communications may result in low morale, lost productivity and lack of trust.


The first communication component is encoding, which is the translation of ideas and concepts into symbols and gestures. The sender begins by deciding the message to be transmitted. Good ideas often become lost if the encoding process is botched. For example, conversations muddled with irrelevant facts and convoluted logic might make it impossible to have a clear and productive dialog on the facts, according to Harvard Business School professor John P. Kotter and University of British Columbia professor Lorne A. Whitehead. Deceptive communication strategies, such as fear mongering, may create anxiety about imaginary risks that may also turn people against a good idea. Business author Theodore Kinni wrote in Harvard Business School Working Knowledge that the power of communications can be maximized by interpreting facts and not just reciting them, and by using emotion and symbols to amplify messages and instantly connect with employees.


The encoded message is transmitted through a medium or channel. The two basic business channel categories are oral and written. Oral communications can be carried out over the telephone or using Internet-based technologies such as virtual teleconferencing and webcasts. Written communication includes reports and memos on traditional paper-based media or on electronic media. Oral channels are faster because the sender and the receiver can use verbal and nonverbal cues to transmit messages and provide responses almost instantaneously. This is why executives travel all over the world to conclude business deals because establishing personal touch and trust can be difficult using emails and virtual meetings.


Decoding is the job of the receiver of the message. It involves interpreting the verbal and nonverbal messages transmitted by the sender. For successful business communication, the encoding and decoding processes must be in sync. This requires trust between the receiver and the sender. Cultural differences often play a part in building this trust, especially in the interpretation of nonverbal communications. For example, pointing with a finger is acceptable in North America but considered rude in many parts of Asia.


Feedback is the final step in the communication process in which the receiver responds to the sender's message. This signal can be verbal -- for example, "Yes, I think it's an excellent idea" -- or nonverbal, such as a sigh or a long pause to indicate disagreement. Feedback allows the sender to take corrective action by retransmitting or rephrasing a misunderstood message. However, feedback should be provided quickly because delays can kill business ideas and lead to lost business opportunities.