Communication is a part of our day-to-day life which involves the act of sending and receiving
messages, but business communication is different as it has a goal to be achieved. Business
communication can be termed as the act of sending or receiving messages with the intention of
achieving a goal at the end. Therefore, business communication can also be termed as organizational
communication which is of two types: formal communication and informal communication.
Formal communication is for official purposes and formal language is used to communicate.
There are two types of formal communication as formal internal communication and formal external
communication. Formal internal communication refers to official communication within the
organization. there are four types of formal internal communication as upward communication,
downward communication, horizontal communication and diagonal communication. Upward
communication refers to communication from a subordinate from a lower level in organizational
hierarchy to his supervisor in a higher position in the organizational hierarchy. For an example, the
assistant finance manager reporting to the CEO. Downward communication is when someone in a
higher position in the organizational hierarchy communicates to a subordinate from lower hierarchical
levels such as the CEO giving instructions to the marketing manager. Horizontal communication is when
two employees from the same level of hierarchy communicates such as the communication between
two finance executive officers. Diagonal communication occurs across departments or divisions, where
employees from different levels of hierarchy in different departments communicate. For an example,
the marketing manager emails the finance executive office.
Formal external communication refers to sending or receiving of messages between external
parties in the external organizational environment and the organization. This external environment
includes customers, shareholders, investors, suppliers, potential investors or society as a whole. For an
example, receiving and clarifying customer complaints.
Informal communication which is also known as grapevine or personal communication is a
casual form of communication which uses informal language and is random. It could be done internally
or externally. It is mostly how employees interact with one another as it is an easy way of
communicating emotions. Although grapevine leads to informalities within the organization it also has
its benefits. Grapevine communication encourages good relationships among employees, and this will in
turn bring out a positive change in their performance which eventually leads to organizational success. it