Class 12 Business Studies Lesson 10

Concept of Communication:

Communication is the process of transmitting information from one person to another. The word communication is derived from the Latin word “communis” which means common. Communication is the essence of leading, decision making, coordinating, and motivating in an organization. It is considered as the lifeblood of an organization.

Communication is a continuous process. It never ends and is universal. It is the exchange of facts, ideas, thoughts, feelings, and values from one person to another. It is an important function of management. Communication should be understood by the receiver in the same sense as intended by the sender.

According to Keith Devis, “Communication is the process of passing information and understanding from one person to another.”

Process of Communication:

1. Sender: The sender is the person or group who conveys the message. He initiates the process of communication. Thus, the sender must have the message, idea, or information which he wants to convey.

2. Encoding: When the sender translates the message into words, symbols, or other forms, he is using encoding skills. Language is the most common code. The purpose of encoding is to make the receiver understand the message.

3. Channel: The medium through which the message is transmitted is called the channel. Examples: audio (radio), audiovisual (television, cinema), print (newspaper, magazine), personal (face-to-face), and mechanical (telephone, internet, email, fax, etc.).

4. Decoding: The receiver interprets and translates the message into meaning. This enables him to understand the message.

5. Receiver: The person who receives the message. The receiver may be a listener, reader, or viewer. Effective communication is always receiver-oriented.

6. Feedback: The reaction given by the receiver in response to the message is called feedback. It plays an important role in making future communication more effective.

7. Noise: Any disturbance that hampers communication is called noise. It reduces the effectiveness of communication, so both sender and receiver should try to minimize it.

Importance of Communication:

1. Smooth operation of organization: Success of business organizations depends on effective communication. Lack of it may lead to failure in achieving objectives.

2. Quick decision and implementation: Communication provides managers with necessary data and information for accurate and quick decisions.

3. Proper planning and coordination: Planning functions like setting objectives, premises, alternatives, and coordination are only possible through communication.

4. Essence of managerial functions: Functions such as planning, organizing, directing, staffing, leading, and controlling depend on effective communication.

5. Better public relations: Communication helps maintain healthy relations with the public by making business policies clear.

6. Sound industrial relations: Effective communication builds mutual trust and confidence between management and workers.

7. Maximum production and minimum cost: Communication ensures coordination of resources, removal of misunderstandings, and efficiency in operations.

Principles of Communication:

1. Principle of clarity: The message should be clear so the receiver interprets it correctly.

2. Principle of attention: The communicator should capture the receiver’s attention by understanding their needs and interests.

3. Principle of adequacy: Information must be complete and adequate. Incomplete information leads to delays and misunderstandings.

4. Principle of consistency: The message should align with organizational goals, policies, and plans.

5. Principle of motivation: Communication should inspire and motivate employees to perform better.

6. Principle of timeliness: The message should be delivered at the right time to remain relevant.

7. Principle of feedback: Communication is complete only when the sender receives feedback from the receiver.

Types of Communication:

1. Vertical Communication: Flows upward or downward in an organization.

   • Downward communication: Flows from higher levels to subordinates, e.g., orders, rules, circulars.

   • Upward communication: Flows from subordinates to higher levels, e.g., reports, suggestions, complaints.

2. Horizontal Communication: Flows between employees or departments at the same level. Promotes coordination and cooperation.

3. Diagonal Communication: Flows between employees of different departments or levels without a direct reporting relationship.

Barriers to Effective Communication:

Physical Barriers:

(a) Noise

(b) Distance

(c) Poor feedback mechanism

Psychological Barriers:

(a) Selfishness

(b) Emotions (anger, fear, jealousy, etc.)

(c) Perception differences

(d) Distrust of sender

(e) Attitude of receiver

Organizational Barriers:

(a) Poor planning of message/channel

(b) Complex structure with too many levels

(c) Status and position differences

(d) Poor timing

Semantic Barriers:

(a) Use of technical words

(b) Badly expressed messages

(c) Faulty translation

(d) Long and complex sentences

Important Questions:

1. Define communication. Show the importance of communication in business.

2. What are the barriers to effective communication? Explain.

3. What is communication? Explain the process of communication.

4. What is communication? Discuss the principles of effective communication.