Business communication is a type of communication used for the purposes of a business. The term refers to both internal and external communication, meaning communication within a business and communication between a business and the public with the aim of promoting a product, service or idea. Communication is a continuous process, in which the sender/encoder conveys verbal or non-verbal messages through some medium to the recipient/decoder. It is essential that the recipient interprets the message as it was intended by the sender. Feedback, or the response of the recipient, is an integral part of the communication process as it shows whether the message was understood in the right way, or ultimately whether the communication was effective. This need of feedback makes communication a two-way process. Communication in business needs to be effective as it is the essence of good management. Effective communication helps managers perform their basic functions of planning, organizing, leading and controlling. One of the main characteristics of business communication is that it is goal-oriented. It is different from other types of communication as the purpose of business is to make profit.
Effective communication is essential for the proper functioning of an organization as it promotes motivation in the team, serves as a source of information, helps in socializing and assists in the controlling process. There are a number of barriers that may stand in the way of effective communication, for example, perceptual and language differences, information overload, inattention, time pressure, external distraction (such as noise and poor lighting) and emotions. Business communication is generally a formal means of communication, meaning that it does not contain colloquial expressions and often follows certain rules. It moves through formal channels and is connected with the official status of the participants. Based on the means used to convey the message there are two types of communication: oral (via speech) and written (via writing). Written communication is most often, but not exclusively, formal. Oral communication can be in the form of direct conversation or telephonic conversation. Several examples of oral communication in business are meetings, speeches, presentations, discussions, conferences, interviews and lectures. Oral communication is preferred when the message is of a temporary kind or when there is a need of direct interaction. Face-to-face communication is important when the sender wants to build trust. Written communication is an essential part of business communication and is used in agendas, reports, manuals and others. Unlike oral communication, which is more spontaneous and allows immediate feedback from the recipient, written communication causes delay. At the same time, writing is considered more reliable, precise and explicit. Written communication is useful in setting principles, policies and rules for the running of an organization and is of great importance for keeping records.
One informal business communication is the "grapevine," or gossip. This type of communication encompasses the whole organization, irrespective of the authority levels. However, grapevine communication is considered typical of the lower levels of organization. There may be various reasons for the existence of this type of communication, for example, a feeling of uncertainty among employees in the absence of reliable information, or a feeling of segregation when the managers favor certain employees. Grapevine communication may supplement formal communication, and allows managers to get quick and sincere feedback from their subordinates. But it has serious drawbacks in that it is often based on rumor and may not provide a clear and complete picture of the situation. In addition, when used excessively, grapevine communication may reduce the productivity of employees. According to Barry Eckhouse, communication in modern business is essentially a competitive activity, as writers and speakers strive to win the attention of their audience in competition with other parties. In his book Competitive Communication: A Rhetoric for Modern Business (1999), Eckhouse posits that in competitive business communication, the sender may gain advantage via messages that are differentiated or that require the least amount of effort to understand.