#4 Types of Business Communication and How They Benefit Your Business

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The saying “communication is crucial” is widely known, and this is especially true in the world of business. Whether you’re a manager conveying company objectives to your team or a virtual receptionist handling customer inquiries, clear and effective communication is a make-or-break factor for a company’s success.

Effective communication is a must in business, but the challenge lies in ensuring that your team consistently communicates well. We recognize that achieving this can be a tough task. However, we have been recognized as the leading experts in Business Client/Customer Communication Services in the United States. As a result, we’ve broken down the various forms of business communication to assist your company in improving its interactions.

We will provide you with insights into the four types of business communication, highlighting their strengths and weaknesses. This will enable your team to adjust their communication approach to different situations more effectively.

There are four primary types of business communication.

Business communication encompasses the sharing of information among individuals within an organization and between the organization and external entities. These four main types are upward communication, downward communication, lateral communication, and external communication.

Upward, downward, and lateral communication are all forms of internal business communication, involving the exchange of information within an organization. This differs from external business communication, which involves interactions between the organization and external parties.

We have provided an overview of the strengths and weaknesses associated with each type of business communication, along with tips for achieving successful communication in each specific scenario.

1. Upward communication

As the name implies, upward communication pertains to interactions that move up the hierarchy within your organization. A typical example is when an employee reports information to a supervisor or manager. Another scenario occurs when a manager communicates with directors or high-level executives.

This form of business communication serves the purpose of keeping upper management informed about the company’s activities. It also offers employees a platform to inquire, express concerns, or offer suggestions.

2. Downward communication

Downward communication involves the transmission of information from the higher levels of an organization down to lower levels within the organizational structure. While it moves in the opposite direction of upward communication, these two types often complement each other.

Instances of downward communication include a manager providing instructions to a subordinate through email or an executive conveying business objectives to a manager. This mode of communication enables management to disseminate information, assign tasks, and uphold established standards.

3. Lateral communication

Lateral or horizontal communication occurs when employees interact with colleagues from different departments or with peers who hold similar positions within the organization. Instances of lateral communication include one coworker reaching out to another or a group of managers discussing the potential recruitment of a new employee.

The aim of lateral communication is to promote collaboration and coordination within an organization. In the absence of effective lateral communication, an organization might struggle to achieve their business objectives.

4. External communication

External communication involves the sharing of information from within the organization with external parties. For instance, a team within your company might submit a proposal for an outreach campaign to a client, or your organization may release a press statement to promote a new product or service.

This category also encompasses any digital communication that takes place via a website, email, or social media platforms, extending from your organization to consumers, clients, or other external stakeholders. Managing your organization’s external communication should be a high priority, as it significantly influences your business’s reputation and external relationships.

Business communication channels to be aware of

Now that you are familiar with the different types of business communication, it’s important to understand the typical communication channels that businesses employ. In a workplace environment, there are three primary communication methods: face-to-face, electronic, and written communication.

Face-to-face communication

Face-to-face communication is a form of synchronous interaction where two or more individuals engage while being able to see each other’s facial expressions and gestures. In the past, this typically meant an in-person meeting where both parties shared the same physical space. However, in today’s virtual work environment, it can also refer to online face-to-face interactions, such as video conferences.

Virtual communication

Virtual communication encompasses any type of interaction conducted through electronic devices like phones or computers. This form of communication can occur in real-time or asynchronously.

Typical instances of virtual business communication include virtual phone number, email, live website chat, Facebook chat, or other social media messaging, as well as communication on project management platforms.

Written communication

Written communication pertains to the exchange of information using only written words in a one-way direction. This communication channel is extensively employed in business and includes various forms such as reports, memos, contracts, proposals, manuals, standard operating procedures (SOPs), and press releases.

Emails, websites, and blog posts are also considered electronic forms of written communication, given their one-directional nature.

How business communication influences your company’s success

Effective business communication plays a crucial role in enhancing your organization’s success and growth. We outline some of the key advantages of practicing good business communication, both within and outside your company.

1. Builds a positive company culture

Maintaining transparent and accessible internal communication helps nurture a positive culture within your organization. Downward communication from leadership influences employee engagement and contributes to maintaining high morale. Furthermore, open upward communication ensures that employees feel their voices are heard.

Additionally, collaborative lateral communication reduces competition between departments, fostering team cohesion. It proves valuable for problem-solving and conflict resolution, promoting a harmonious work environment.

2. Promotes innovation

It’s often said that innovation thrives through communication, and companies can foster innovation by promoting team interactions. Lateral communication, which includes brainstorming sessions and meetings, encourages team members to share ideas and spark their creative thinking.

Open upward communication also facilitates employees sharing their innovative ideas with higher-ups and taking calculated risks to drive innovation within the company. Downward communication plays a crucial role in conveying leadership’s goals and vision for innovation. Both lateral and upward communication contribute to knowledge sharing, while external communication is employed to disseminate innovative concepts to the public.

3. Enhances your business operations

Another advantage of practicing effective business communication is its potential to enhance your business operations. Well-executed downward communication is vital for conveying company goals to employees, leading to improved organizational success.

Moreover, business communication plays a pivotal role in enhancing employee performance and productivity. Research has shown that 60% of business professionals encounter communication challenges on a monthly basis. Upward communication supports employees in seeking guidance when needed, while lateral communication promotes synergy and collaboration, enabling teams to collectively solve problems and achieve more.

Lastly, external communication plays a critical role in nurturing positive working relationships with other organizations, ensuring that your company’s workflow remains unhindered by external factors.

4. Promotes employee satisfaction

Internal communication serves as a valuable tool for maintaining employee satisfaction, ensuring that employees find their work fulfilling and are less inclined to seek alternative employment. Research indicates that employee satisfaction with internal communication is a predictor of improved employee engagement and increased attractiveness as an employer.

Maintaining open lines of communication between employees and management is essential for nurturing positive working relationships and enabling managers to stay attuned to the sentiments of their workforce.

Specifically, accessible upward communication empowers employees to provide feedback concerning any challenges in their workflow or their overall employee experience. This feedback can guide management in streamlining processes and ultimately increasing employee retention.

5. Enhances customer satisfaction

External communication plays a pivotal role in shaping an engaging and rewarding customer experience. Responsiveness in business interactions not only attracts more clients but also wins over customers.

Delivering helpful and informative customer service through channels like Smith.ai’s Live Chat is crucial for boosting customer satisfaction. Such communication methods also aid in problem resolution and customer retention, as effective external communication can help address and resolve any issues customers may encounter.

Conclusion

Every form of business communication is essential for your company’s success and advancement. Invest the effort to grasp the intricacies of upward, downward, lateral, and external communication to ensure your organization can effectively respond to any scenario.

Utilize our success-oriented tips to assist your team in navigating all types of interactions, whether they occur internally or externally. And remember to make the most of valuable resources, such as Smith.ai, for effective business communication.

by Stella Fisher

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