Essentials of Communication: Notes | Corporate & Other Laws for CA Intermediate PDF Download

 Page 1


13 
Essentials of Communication 
Learning Objectives 
After reading this chapter, you will be able to understand  
? Formal and Informal Communication  
? Interdepartmental 
? Verbal, Nonverbal and Written 
? Communication Channels 
? Barriers to Effective Communication 
? Planning and composing Business messages 
 “Worthless words are doubly unprofitable: the listeners' enjoyment is lost, and the speaker's 
own virtues vanish”.  Kural (Verse 194) 
13.1 Introduction 
There is no doubt that Communication is so fundamental that without it no organisation can 
exist and function effectively towards achieving its objectives. Communication is the principal 
means by which members of an organisation work together. It helps to bind them together, 
enabling them to react to and influence each other. It flows in different directions within the 
organisation : downward, upward, horizontally and diagonally. No manager can be effective in 
his job unless he is able to communicate. It is, therefore, apt to call communication  the “life-
blood” of an organization. As Sir John Harvey-Jones says, “communication is the single most 
essential skill.” Professional and result-oriented organisations are always looking for 
managers who can communicate persuasively and competently. It has been pointed out that 
about nine tenths of a manager’s time is spent in communicating, one way or the other. It lies 
at the very heart of management. Powerful concepts in management such as participation, 
empowerment and involvement revolve around communication.  
Given below are some of the factors responsible for the growing importance of 
communication: 
(a) Growth in the size and multiple locations of organisation: Most of the organisations 
are growing larger and larger in size. The people working in these organisations may be 
Page 2


13 
Essentials of Communication 
Learning Objectives 
After reading this chapter, you will be able to understand  
? Formal and Informal Communication  
? Interdepartmental 
? Verbal, Nonverbal and Written 
? Communication Channels 
? Barriers to Effective Communication 
? Planning and composing Business messages 
 “Worthless words are doubly unprofitable: the listeners' enjoyment is lost, and the speaker's 
own virtues vanish”.  Kural (Verse 194) 
13.1 Introduction 
There is no doubt that Communication is so fundamental that without it no organisation can 
exist and function effectively towards achieving its objectives. Communication is the principal 
means by which members of an organisation work together. It helps to bind them together, 
enabling them to react to and influence each other. It flows in different directions within the 
organisation : downward, upward, horizontally and diagonally. No manager can be effective in 
his job unless he is able to communicate. It is, therefore, apt to call communication  the “life-
blood” of an organization. As Sir John Harvey-Jones says, “communication is the single most 
essential skill.” Professional and result-oriented organisations are always looking for 
managers who can communicate persuasively and competently. It has been pointed out that 
about nine tenths of a manager’s time is spent in communicating, one way or the other. It lies 
at the very heart of management. Powerful concepts in management such as participation, 
empowerment and involvement revolve around communication.  
Given below are some of the factors responsible for the growing importance of 
communication: 
(a) Growth in the size and multiple locations of organisation: Most of the organisations 
are growing larger and larger in size. The people working in these organisations may be 
13.2 Business Law, Ethics and Communication 
 
spread over different states of a country or over different countries. Keeping in touch, sending 
directions across and getting feedback is possible only when communication lines are kept 
working effectively. 
(b) Growth of trade unions: Over the last so many decades trade unions have been growing 
strong. No management can be successful without taking the trade unions into confidence. 
Only through effective communication can a meaningful relationship be built between the 
management and the workers. 
(c) Growing importance of human relations: Workers in an organisation are not like 
machines. They have their own hopes and aspirations. Management has to recognise them 
above all as sensitive human beings and work towards a spirit of integration with them which 
effective communication helps to achieve. 
(d) Public relations: Every organisation has a social responsibility, towards customers, 
government, suppliers and the public at large. Communication with them is the only way an 
organisation can project a positive  image of itself. 
(e) Advances in Behavioural Sciences: Modern management is deeply influenced by 
exciting discoveries made in behavioural sciences like psychology, sociology, transactional 
analysis etc. All of them throw light on subtle aspects of human nature and help in developing 
a positive attitude towards life and building up meaningful relationships. And this is possible 
only through communication. 
(f) Technological advancement: The world is changing very fast, owing to scientific and 
technological advancements. These advancements deeply affect not only methods of work but 
also the composition of groups. In such a situation proper communication between superiors 
and subordinates becomes very necessary. 
13.2 The Process of Communication 
Communication is a dynamic, transactional (two-way process) in which there is an exchange 
of ideas linking the sender and receiver towards a mutually accepted direction or goal 
consisting of seven elements: 
1. Sender (Source): The process of communication begins with a sender, the person who has 
an idea and wants to share it. A computer programmer explaining a new program to a co-
worker, accountant giving financial report to the superior are all examples of sender of 
communication. 
2. Encoding: The sender must choose certain words or non-verbal methods to translate the 
idea into a message. This activity is called encoding. While encoding a message, one needs 
to consider what contents to include, how the receiver will interpret it and how it may affect 
one’s relationship. A simple “thank-you” message will be relatively easy. In contrast, to inform 
200 employees of a bad news about salary cut requiring carefully planned messages. 
Page 3


13 
Essentials of Communication 
Learning Objectives 
After reading this chapter, you will be able to understand  
? Formal and Informal Communication  
? Interdepartmental 
? Verbal, Nonverbal and Written 
? Communication Channels 
? Barriers to Effective Communication 
? Planning and composing Business messages 
 “Worthless words are doubly unprofitable: the listeners' enjoyment is lost, and the speaker's 
own virtues vanish”.  Kural (Verse 194) 
13.1 Introduction 
There is no doubt that Communication is so fundamental that without it no organisation can 
exist and function effectively towards achieving its objectives. Communication is the principal 
means by which members of an organisation work together. It helps to bind them together, 
enabling them to react to and influence each other. It flows in different directions within the 
organisation : downward, upward, horizontally and diagonally. No manager can be effective in 
his job unless he is able to communicate. It is, therefore, apt to call communication  the “life-
blood” of an organization. As Sir John Harvey-Jones says, “communication is the single most 
essential skill.” Professional and result-oriented organisations are always looking for 
managers who can communicate persuasively and competently. It has been pointed out that 
about nine tenths of a manager’s time is spent in communicating, one way or the other. It lies 
at the very heart of management. Powerful concepts in management such as participation, 
empowerment and involvement revolve around communication.  
Given below are some of the factors responsible for the growing importance of 
communication: 
(a) Growth in the size and multiple locations of organisation: Most of the organisations 
are growing larger and larger in size. The people working in these organisations may be 
13.2 Business Law, Ethics and Communication 
 
spread over different states of a country or over different countries. Keeping in touch, sending 
directions across and getting feedback is possible only when communication lines are kept 
working effectively. 
(b) Growth of trade unions: Over the last so many decades trade unions have been growing 
strong. No management can be successful without taking the trade unions into confidence. 
Only through effective communication can a meaningful relationship be built between the 
management and the workers. 
(c) Growing importance of human relations: Workers in an organisation are not like 
machines. They have their own hopes and aspirations. Management has to recognise them 
above all as sensitive human beings and work towards a spirit of integration with them which 
effective communication helps to achieve. 
(d) Public relations: Every organisation has a social responsibility, towards customers, 
government, suppliers and the public at large. Communication with them is the only way an 
organisation can project a positive  image of itself. 
(e) Advances in Behavioural Sciences: Modern management is deeply influenced by 
exciting discoveries made in behavioural sciences like psychology, sociology, transactional 
analysis etc. All of them throw light on subtle aspects of human nature and help in developing 
a positive attitude towards life and building up meaningful relationships. And this is possible 
only through communication. 
(f) Technological advancement: The world is changing very fast, owing to scientific and 
technological advancements. These advancements deeply affect not only methods of work but 
also the composition of groups. In such a situation proper communication between superiors 
and subordinates becomes very necessary. 
13.2 The Process of Communication 
Communication is a dynamic, transactional (two-way process) in which there is an exchange 
of ideas linking the sender and receiver towards a mutually accepted direction or goal 
consisting of seven elements: 
1. Sender (Source): The process of communication begins with a sender, the person who has 
an idea and wants to share it. A computer programmer explaining a new program to a co-
worker, accountant giving financial report to the superior are all examples of sender of 
communication. 
2. Encoding: The sender must choose certain words or non-verbal methods to translate the 
idea into a message. This activity is called encoding. While encoding a message, one needs 
to consider what contents to include, how the receiver will interpret it and how it may affect 
one’s relationship. A simple “thank-you” message will be relatively easy. In contrast, to inform 
200 employees of a bad news about salary cut requiring carefully planned messages. 
 Essentials of Communication  13.3 
 
3. Message: For communication to occur your receiver should first get the message. A message is 
any signal that triggers the response of a receiver. Messages could be verbal (written or spoken) or 
nonverbal (such as appearance, body language, silence, sounds, yawns, sighs etc.) 
4. Channel: How will you send your message? Should it be sent via an electronic word processing 
system or through the printed word or through graphic symbol on paper, or via the medium of 
sound. 
The choice of channel or medium (written or oral) is influenced by the inter relationships between 
the sender and the receiver. It also depends upon the urgency of the message being sent.  
5. Receiver: A receiver is any person who notices and attaches some meaning to a message. In 
the confusing and imperfect world of business, however, several problems can occur. The 
message may never get to the receiver. It might be sent but lie buried under a mountain of files on 
the recipient’s desk. If the message is oral, the listener might forget it.  
6. Decoding: Even if the message reaches intact to its intended receiver, there is no guarantee 
that it will be understood as the sender intended it to be. The receiver must still decode it - 
Attaching meaning to the words or symbols. It may be noted that decoding is not always accurate.  
7. Feedback: Ultimately the receiver reacts or responds to the communication sent by the sender. 
The response could be based on clear interpretation of the symbols sent or it could be based on 
misunderstanding or misinterpretation of the symbols sent. Whatever the response of a receiver to 
a sender is, it is known as feedback. Feedback is an important component of the communication 
process, because ultimately the success or failure of the communication is decided by the 
feedback we get. 
 
Communication Process 
Forms of Communication: All communication passes through some well-defined stages or 
positions in the organisation. Everybody is familiar with the phrase ‘through proper channel’ 
Page 4


13 
Essentials of Communication 
Learning Objectives 
After reading this chapter, you will be able to understand  
? Formal and Informal Communication  
? Interdepartmental 
? Verbal, Nonverbal and Written 
? Communication Channels 
? Barriers to Effective Communication 
? Planning and composing Business messages 
 “Worthless words are doubly unprofitable: the listeners' enjoyment is lost, and the speaker's 
own virtues vanish”.  Kural (Verse 194) 
13.1 Introduction 
There is no doubt that Communication is so fundamental that without it no organisation can 
exist and function effectively towards achieving its objectives. Communication is the principal 
means by which members of an organisation work together. It helps to bind them together, 
enabling them to react to and influence each other. It flows in different directions within the 
organisation : downward, upward, horizontally and diagonally. No manager can be effective in 
his job unless he is able to communicate. It is, therefore, apt to call communication  the “life-
blood” of an organization. As Sir John Harvey-Jones says, “communication is the single most 
essential skill.” Professional and result-oriented organisations are always looking for 
managers who can communicate persuasively and competently. It has been pointed out that 
about nine tenths of a manager’s time is spent in communicating, one way or the other. It lies 
at the very heart of management. Powerful concepts in management such as participation, 
empowerment and involvement revolve around communication.  
Given below are some of the factors responsible for the growing importance of 
communication: 
(a) Growth in the size and multiple locations of organisation: Most of the organisations 
are growing larger and larger in size. The people working in these organisations may be 
13.2 Business Law, Ethics and Communication 
 
spread over different states of a country or over different countries. Keeping in touch, sending 
directions across and getting feedback is possible only when communication lines are kept 
working effectively. 
(b) Growth of trade unions: Over the last so many decades trade unions have been growing 
strong. No management can be successful without taking the trade unions into confidence. 
Only through effective communication can a meaningful relationship be built between the 
management and the workers. 
(c) Growing importance of human relations: Workers in an organisation are not like 
machines. They have their own hopes and aspirations. Management has to recognise them 
above all as sensitive human beings and work towards a spirit of integration with them which 
effective communication helps to achieve. 
(d) Public relations: Every organisation has a social responsibility, towards customers, 
government, suppliers and the public at large. Communication with them is the only way an 
organisation can project a positive  image of itself. 
(e) Advances in Behavioural Sciences: Modern management is deeply influenced by 
exciting discoveries made in behavioural sciences like psychology, sociology, transactional 
analysis etc. All of them throw light on subtle aspects of human nature and help in developing 
a positive attitude towards life and building up meaningful relationships. And this is possible 
only through communication. 
(f) Technological advancement: The world is changing very fast, owing to scientific and 
technological advancements. These advancements deeply affect not only methods of work but 
also the composition of groups. In such a situation proper communication between superiors 
and subordinates becomes very necessary. 
13.2 The Process of Communication 
Communication is a dynamic, transactional (two-way process) in which there is an exchange 
of ideas linking the sender and receiver towards a mutually accepted direction or goal 
consisting of seven elements: 
1. Sender (Source): The process of communication begins with a sender, the person who has 
an idea and wants to share it. A computer programmer explaining a new program to a co-
worker, accountant giving financial report to the superior are all examples of sender of 
communication. 
2. Encoding: The sender must choose certain words or non-verbal methods to translate the 
idea into a message. This activity is called encoding. While encoding a message, one needs 
to consider what contents to include, how the receiver will interpret it and how it may affect 
one’s relationship. A simple “thank-you” message will be relatively easy. In contrast, to inform 
200 employees of a bad news about salary cut requiring carefully planned messages. 
 Essentials of Communication  13.3 
 
3. Message: For communication to occur your receiver should first get the message. A message is 
any signal that triggers the response of a receiver. Messages could be verbal (written or spoken) or 
nonverbal (such as appearance, body language, silence, sounds, yawns, sighs etc.) 
4. Channel: How will you send your message? Should it be sent via an electronic word processing 
system or through the printed word or through graphic symbol on paper, or via the medium of 
sound. 
The choice of channel or medium (written or oral) is influenced by the inter relationships between 
the sender and the receiver. It also depends upon the urgency of the message being sent.  
5. Receiver: A receiver is any person who notices and attaches some meaning to a message. In 
the confusing and imperfect world of business, however, several problems can occur. The 
message may never get to the receiver. It might be sent but lie buried under a mountain of files on 
the recipient’s desk. If the message is oral, the listener might forget it.  
6. Decoding: Even if the message reaches intact to its intended receiver, there is no guarantee 
that it will be understood as the sender intended it to be. The receiver must still decode it - 
Attaching meaning to the words or symbols. It may be noted that decoding is not always accurate.  
7. Feedback: Ultimately the receiver reacts or responds to the communication sent by the sender. 
The response could be based on clear interpretation of the symbols sent or it could be based on 
misunderstanding or misinterpretation of the symbols sent. Whatever the response of a receiver to 
a sender is, it is known as feedback. Feedback is an important component of the communication 
process, because ultimately the success or failure of the communication is decided by the 
feedback we get. 
 
Communication Process 
Forms of Communication: All communication passes through some well-defined stages or 
positions in the organisation. Everybody is familiar with the phrase ‘through proper channel’ 
13.4 Business Law, Ethics and Communication 
 
which means that the sender of a written communication means to pass it on to the addressee 
through someone occupying an important position in the hierarchical system of the 
organisation. In this way the word ‘channel’ means the position or point through which the 
communication passes So, we can divide the channels of communication into two categories: 
(a)  Formal 
(b)  Informal 
13.3 Formal Communication 
A formal communication flows along prescribed channels which all organizational members 
desirous of communicating with one another are obliged to follow. Every organisation has a 
built-in hierarchical system that can be compared to a pyramid. It can, therefore, be 
understood that communication normally flows from top downwards. But it is not always so. 
Communication in an organisation is multidimensional or multidirectional.  
 
Given below are the directions in which communications are sent: 
(a)  Downward 
(b)  Upward 
(c)  Horizontal or Lateral 
(d)  Diagonal or Crosswise 
Page 5


13 
Essentials of Communication 
Learning Objectives 
After reading this chapter, you will be able to understand  
? Formal and Informal Communication  
? Interdepartmental 
? Verbal, Nonverbal and Written 
? Communication Channels 
? Barriers to Effective Communication 
? Planning and composing Business messages 
 “Worthless words are doubly unprofitable: the listeners' enjoyment is lost, and the speaker's 
own virtues vanish”.  Kural (Verse 194) 
13.1 Introduction 
There is no doubt that Communication is so fundamental that without it no organisation can 
exist and function effectively towards achieving its objectives. Communication is the principal 
means by which members of an organisation work together. It helps to bind them together, 
enabling them to react to and influence each other. It flows in different directions within the 
organisation : downward, upward, horizontally and diagonally. No manager can be effective in 
his job unless he is able to communicate. It is, therefore, apt to call communication  the “life-
blood” of an organization. As Sir John Harvey-Jones says, “communication is the single most 
essential skill.” Professional and result-oriented organisations are always looking for 
managers who can communicate persuasively and competently. It has been pointed out that 
about nine tenths of a manager’s time is spent in communicating, one way or the other. It lies 
at the very heart of management. Powerful concepts in management such as participation, 
empowerment and involvement revolve around communication.  
Given below are some of the factors responsible for the growing importance of 
communication: 
(a) Growth in the size and multiple locations of organisation: Most of the organisations 
are growing larger and larger in size. The people working in these organisations may be 
13.2 Business Law, Ethics and Communication 
 
spread over different states of a country or over different countries. Keeping in touch, sending 
directions across and getting feedback is possible only when communication lines are kept 
working effectively. 
(b) Growth of trade unions: Over the last so many decades trade unions have been growing 
strong. No management can be successful without taking the trade unions into confidence. 
Only through effective communication can a meaningful relationship be built between the 
management and the workers. 
(c) Growing importance of human relations: Workers in an organisation are not like 
machines. They have their own hopes and aspirations. Management has to recognise them 
above all as sensitive human beings and work towards a spirit of integration with them which 
effective communication helps to achieve. 
(d) Public relations: Every organisation has a social responsibility, towards customers, 
government, suppliers and the public at large. Communication with them is the only way an 
organisation can project a positive  image of itself. 
(e) Advances in Behavioural Sciences: Modern management is deeply influenced by 
exciting discoveries made in behavioural sciences like psychology, sociology, transactional 
analysis etc. All of them throw light on subtle aspects of human nature and help in developing 
a positive attitude towards life and building up meaningful relationships. And this is possible 
only through communication. 
(f) Technological advancement: The world is changing very fast, owing to scientific and 
technological advancements. These advancements deeply affect not only methods of work but 
also the composition of groups. In such a situation proper communication between superiors 
and subordinates becomes very necessary. 
13.2 The Process of Communication 
Communication is a dynamic, transactional (two-way process) in which there is an exchange 
of ideas linking the sender and receiver towards a mutually accepted direction or goal 
consisting of seven elements: 
1. Sender (Source): The process of communication begins with a sender, the person who has 
an idea and wants to share it. A computer programmer explaining a new program to a co-
worker, accountant giving financial report to the superior are all examples of sender of 
communication. 
2. Encoding: The sender must choose certain words or non-verbal methods to translate the 
idea into a message. This activity is called encoding. While encoding a message, one needs 
to consider what contents to include, how the receiver will interpret it and how it may affect 
one’s relationship. A simple “thank-you” message will be relatively easy. In contrast, to inform 
200 employees of a bad news about salary cut requiring carefully planned messages. 
 Essentials of Communication  13.3 
 
3. Message: For communication to occur your receiver should first get the message. A message is 
any signal that triggers the response of a receiver. Messages could be verbal (written or spoken) or 
nonverbal (such as appearance, body language, silence, sounds, yawns, sighs etc.) 
4. Channel: How will you send your message? Should it be sent via an electronic word processing 
system or through the printed word or through graphic symbol on paper, or via the medium of 
sound. 
The choice of channel or medium (written or oral) is influenced by the inter relationships between 
the sender and the receiver. It also depends upon the urgency of the message being sent.  
5. Receiver: A receiver is any person who notices and attaches some meaning to a message. In 
the confusing and imperfect world of business, however, several problems can occur. The 
message may never get to the receiver. It might be sent but lie buried under a mountain of files on 
the recipient’s desk. If the message is oral, the listener might forget it.  
6. Decoding: Even if the message reaches intact to its intended receiver, there is no guarantee 
that it will be understood as the sender intended it to be. The receiver must still decode it - 
Attaching meaning to the words or symbols. It may be noted that decoding is not always accurate.  
7. Feedback: Ultimately the receiver reacts or responds to the communication sent by the sender. 
The response could be based on clear interpretation of the symbols sent or it could be based on 
misunderstanding or misinterpretation of the symbols sent. Whatever the response of a receiver to 
a sender is, it is known as feedback. Feedback is an important component of the communication 
process, because ultimately the success or failure of the communication is decided by the 
feedback we get. 
 
Communication Process 
Forms of Communication: All communication passes through some well-defined stages or 
positions in the organisation. Everybody is familiar with the phrase ‘through proper channel’ 
13.4 Business Law, Ethics and Communication 
 
which means that the sender of a written communication means to pass it on to the addressee 
through someone occupying an important position in the hierarchical system of the 
organisation. In this way the word ‘channel’ means the position or point through which the 
communication passes So, we can divide the channels of communication into two categories: 
(a)  Formal 
(b)  Informal 
13.3 Formal Communication 
A formal communication flows along prescribed channels which all organizational members 
desirous of communicating with one another are obliged to follow. Every organisation has a 
built-in hierarchical system that can be compared to a pyramid. It can, therefore, be 
understood that communication normally flows from top downwards. But it is not always so. 
Communication in an organisation is multidimensional or multidirectional.  
 
Given below are the directions in which communications are sent: 
(a)  Downward 
(b)  Upward 
(c)  Horizontal or Lateral 
(d)  Diagonal or Crosswise 
 Essentials of Communication  13.5 
 
Formally a clerk working in any section cannot directly communicate with a Managing Director 
but has to follow the reporting hierarchy. It has been called “the main line of the organisation’s 
operational communication”. In this are included the reports, records and other forms that 
supply working information to the various parts of the organisation, orders, instructions and 
messages that flow up and down in the hierarchical system and the letters, sales 
presentations, advertising and publicity material that go out to the public. These forms of 
communication just do not happen by themselves. 
They are carefully thought out and well designed. Great care is taken in their design and 
movement. 
Advantages of formal communication: 
(a)  The formal channels account for most of the effectiveness of communication. As has 
been said earlier great care has to be taken in sending across any letter or report through 
the ‘proper’ formal channel. 
(b)  Formal channels cover an ever – widening distance as organizations  grow. Through 
them it is easier to reach out to the branches of an organisation  spread far and wide. 
(c)  The formal channels, because of their tendency to filter information, keep the higher level 
managers from getting bogged down. 
(d)  Formal channels of communication consolidate the organisation and satisfy the people in 
managerial position.