The importance of organizational communication

From watercooler chats to crisis communication, the way companies share information can make or break them

How to use four types of organizational communication.
WeWork Diagonal 444 in Barcelona. Photograph by WeWork

Humans are hardwired for communication. We communicate to share ideas, strengthen relationships, solve problems, and overcome challenges in our professional and personal lives. 

How we choose to speak to our colleagues, employees, and clients might seem like an incidental part of doing business, but effective organizational communication can be vital to a growing company’s success. The orderly flow of information within an organization, from those who have it to those who need it, can make an enormous difference.

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What is organizational communication?

Organizational communication is a technical term used to describe how people within a company share information and speak to one another, their clients, and their customers. It’s part of the wider field of communication theory, which is itself an attempt to analyze and understand how humans, animals, and even plants convey information to one another.

Organizational communication can be classified as either formal or informal. It includes everything from the style and content of press releases, to the channels and software used to keep teams connected and cooperating on projects. 

Types of organizational communication

Because organizational communication is such a broad and complex topic, it can be helpful to break it down into categories. Most communication within a business can be described using four key attributes:

Formal vs. informal

Formal communication takes place between people who have a clear hierarchy within an organization, such as between a boss and an employee, or between the company and a customer. It tends to be more scripted than informal communication. 

Informal communication takes place between people who have a more equal footing within an organization, such as between coworkers or friends. It’s typically more spontaneous and less controlled than formal communication.  

Internal vs. external

Internal communication takes place within an organization, typically between people who work for the same company. 

External communication is the kind of communication that takes place between an organization and the people outside of it, such as its customers or the general public. 

Verbal vs. nonverbal

Verbal communication is the kind of communication that uses words, either spoken or written. 

Nonverbal communication is the kind of communication that doesn’t use words, like body language, facial expressions, or tone of voice.

One-way vs. two-way

One-way communication is the kind of communication where information flows in only one direction, from the sender to the receiver. Notice board postings and press releases are examples of one-way communication.

Two-way communication is the kind of communication where information flows in two directions, from the sender to the receiver and back again. Team meetings and work Slack channels are examples of two-way communication.

Benefits of good organizational communication

As with so many aspects of life, open and clear communication is the foundation of a healthy relationship. If your company can’t communicate effectively with itself or with its customers, things can start to fall apart rapidly. 

A good organizational communication strategy ensures that everyone within the business is on the same page and aware of the company’s goals and objectives. It helps to strengthen and maintain relationships between employees, their customers, and their clients. And it can help to improve the overall efficiency of the business by allowing the orderly flow of information between the employees with valuable knowledge and the employees who need it.

What happens when you have ineffective organizational communication?

Ineffective organizational communication might seem like a small issue, but it can quickly snowball into major problems for your business. Misunderstanding instructions or simply not having the relevant information can lead to employees making costly mistakes. Customers can feel left in the dark or ignored, and decide to take their business somewhere else. Clients might perceive your poor communication as incompetence or indifference to their needs.

Employee morale also suffers when communication breaks down. Without transparency and openness, teams can become siloed and workers can feel isolated from the wider company culture. Learning about important business updates, such as an upcoming office move, through the grapevine rather than from a manager can lead to a sense of secrecy and negativity around the office.

How to create a successful organizational communication strategy

If you want to improve communication within your organization, there are a few steps you can take to make it happen:

  • Support two-way communication by setting up channels where employees can give feedback and ask questions. This can be as simple as setting up a Slack channel for open discussion or holding regular team meetings.
  • Make sure everyone has access to the same information by using a centralized system such as an intranet or an online knowledge base. This will help to avoid confusion and miscommunication.
  • Encourage transparency by being open about the company’s plans and objectives. Employees will feel more invested in the business when they know where it’s going and why.
  • Let employees feel like their voices are being heard by regularly asking for feedback and acting on it. This will help to build trust and improve morale.

Finally, make sure you’re using the right tools for the job. The right communication tools will make it easier for employees to stay connected and will help to improve the flow of information.

The role of leadership in organizational communication

Good organizational communication strategy starts with strong leadership. Leaders set the tone for how communication will work within the company, and it’s up to them to create an environment where employees feel comfortable sharing information and asking questions. 

Leaders also need to be role models for effective communication. When a leader constantly interrupts people or sends long-winded emails, that behavior is more likely to be replicated throughout the company. But if a leader is concise and to the point, that kind of communication will become the norm.

Why organizational communication is important in the workplace

Organizational communication is an integral part of any business, no matter the size or shape of the organization, so all leaders need to be aware of it. By understanding when it’s appropriate to use one-way communication; when to be transparent with teams; when to be informal with colleagues; and how to use the right tools to share information, you can create a communication strategy that will help to improve the overall efficiency of your business.

Steve Hogarty is a writer and journalist based in London. He is the travel editor of City AM newspaper and the deputy editor of City AM Magazine, where his work focuses on technology, travel, and entertainment.

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Management and Leadership