Internal communication is a process where information is distributed to stakeholders whose welfare depends on the company's success. These stakeholders not only include employees, but also vendors, investors, independent contractors and business partnerships. Internal communication is primarily about sharing facts to a person or group directly involved with representing the organization.

Employee vs. Internal Communication

Internal communication is often used interchangeably with employee relations or organizational communication. However, employee and organizational communication usually focus on conveying benefits and values. Employee communication -- traditionally directed by the human resources department or managers -- is tailored specifically for department employees. Organizational communication focuses on developing efficient systems, creating a positive work culture and encouraging collective participation. Theories of internal communication focus on managing who receives information, what is being shared, how that information is delivered to the right people, when they will receive it and why the communication is needed to make better decisions.

Internal Communication's Function


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Internal communication is a news-oriented function focused on getting relevant, timely and accurate information to the appropriate stakeholders. The internal communication practitioner focuses on educating, creating awareness and sharing knowledge of company data. Desired results include encouraging feedback, reinforcing constructive dialogue and reinforcing the stakeholder’s role in activities, problems and accomplishments. The internal communication manager integrates information through a variety of media -- newsletters, video, conference calls, email and personal interactions, just to name a few. She may work closely with employee and organizational practitioners, or even incorporate these roles' benefits.

Formal Communication Theories

Formal theories of internal communication include an examination of top-down, down-up and horizontal communication patterns. In top-down communication, managers share information to subordinates through formal conferences, training sessions or written documents. Down-up or upward internal communication includes gaining feedback or suggestions from employees or other stakeholders. Companies and managers that encourage down-up communication have an advantage by getting valuable counsel – such as a why a production method is outdated, tedious for the worker and costing the company millions -- that may help them make better decisions. Horizontal communication theories suggest that organizational units may be integrated and better equipped to maximize resources between departments. Horizontal communication encourages an open flow of information within workers at the same level.

Informal Communication Theories

Informal networks, or a ‘grapevine’ channel, can rule internal communication. Theories of internal communication suggest that distortion and influence are more commonly found in informal channels than formal channels. Informal networks do not follow rules of hierarchy with regard to influence; for instance, a manager may trust feedback from a receptionist before asking another manager about a particular situation. Certain people, regardless of their title, also may have influence over others in shaping opinion and sharing information. Though this information can be distorted or inaccurate, informal communication can promote peer-to-peer contact, which can save time and money.

Influence of Internal Communication


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The top priorities of internal communication are to influence company participation positively and commit to make better decisions. Motivation for internal communication includes a mutual, financial benefit for the company and stakeholder. Managing the output of information to specific groups interdependent on the company’s success is a major factor in internal communication theory. For example, a civil engineering firm hired to construct a project comprises independent contractors and not direct-hire employees of the company that ordered the project, but their primary involvement is to help build and advance the company. The engineering firm that wants to achieve that end – and be hired for future projects -- will work with the company to design an impressive, aesthetic building that speaks to the company’s mission. Understanding internal communication theories can help managers make better decisions and encourage a free flow of productive communication.