The importance of good communication in organisations

By Indeed Editorial Team

Updated 8 December 2022

Published 30 November 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Organisational communication includes all the communications within a company, such as those between employees, representatives, managers and press officers. The importance of effective communication in organisations is vital to ensuring business success. Companies become more effective when they enhance their communication systems. In this article, we explore the different types of communication in organisations, what they are and why they are crucial.

Why is communication in organisations important?

Effective communication in organisations creates a consistent image and tone across internal and external communications, producing a thriving business environment with a consistent brand image. Organisational communication is vital for managers because communication is foundational to planning projects and implementing tasks. The importance of organisational communication includes:

Building a positive work environment

Increased morale promotes a positive working environment that drives the company towards success. In creating a work environment with open communication channels, employees understand their responsibilities and the company's expectations. Employees better understand how to reach their targets, increasing staff morale and boosting staff employee retention rates. Equally, open communication channels work in management's favour, too, so that they can listen to and address staff concerns. Overall, this form of effective workplace communication ensures all team members feel valued and considered in company decisions.

Related: Why is communication important? (And how to improve it)

Increasing staff motivation

Clear communication in business environments can increase staff motivation by setting defined and achievable goals. In knowing the task parameters and the processes required to complete the task, managers can create clear objectives for their employees. Additionally, organisational communication can provide feedback to help employees improve their workplace performance and grow as industry professionals. When staff feel motivated, workplace productivity also increases, thereby enhancing company output.

Related: Productivity tools for effective work and organisation

Facilitating growth and development

A crucial element to business success is developing and changing with the market and consumer demand. Here, effective communication within an organisation is essential in promoting business development and growth to stay ahead in the market. With open communication channels between employees and management, staff can share ideas, communicate policy changes and quickly develop approaches to solve new challenges. As such, the business stays up-to-date with current best practices, and clients see the constant improvement of the company's services.

Related: 5 types of change within organisations (plus examples)

Providing necessary information

Communication in business settings is vital in ensuring all staff have the information to complete their tasks. Team members have the necessary data, policies or facts to complete their job accurately and with insight. So, disseminating information through the organisation is essential to maintaining employee productivity and business insight. Equally, access to information can assist managers in decision-making processes and problem-solving.

Related: How To Be a Good Communicator (With Steps)

Developing strong management

When managers use effective organisational communication, they strengthen their management skills. From delegating tasks to motivating their staff, building employee relationships and resolving conflicts, management improves with clear, assertive communication. Furthermore, maintaining open communication channels between managers and their employees promotes practical problem-solving and efficient responses when facing unexpected issues.

Related: Improving Your Manager Communication Skills

Maintaining compliance with company policy

Written formal policies enable companies to communicate definitive procedures for various workplace scenarios. From an employee code of conduct to a disciplinary procedure, policies help create unified expectations, streamline processes and create safe, accessible workplaces. This communication method ensures all employees feel supported and welcome. Managers communicate the company policies and update employees on any new procedures to maintain open communication channels and accurately set workplace expectations. To do this, managers may create an employee handbook, a shared electronic location for policy documents or use other media techniques.

Encouraging staff collaboration

When working in a team with shared goals, organisational communication helps everyone collaborate and achieve a common outcome. Communication is essential in creating these collaborative settings, maintaining a shared vision and turning complex processes into achievable steps. For larger teams, this aspect of communication in an organisation also helps leaders clarify each team member's responsibilities. In encouraging staff collaboration, using formal and informal communication methods is vital, ensuring managers share essential information through the appropriate channels to promote teamwork and spaces for open discussion.

Related: Positive feedback examples for boosting staff morale

Creating a recognisable brand image

Businesses maintain an established brand. From social media posts to internal memos, familiar brand images makes your company recognisable to customers, developing loyalty and increasing sales. So, maintaining a consistent tone and style in all communications helps promote a company's consistent image. Larger companies often have specific branding guidelines to standardise their communications, creating distinctive styles on social media and developing a professional presence in their industry sector.

Types of effective organisational communication

In achieving effective communication within an organisation, a business understands the different types of communication and when to use them. This information helps employees know which communication type is appropriate for certain situations, helping maintain workplace efficiency and encourage company success. Some different organisation communication styles often used in workplace settings include:

Written communication

Communicating using text is useful when creating concrete pieces of information and producing a reproducible record of communication. Written communication methods favour brevity and succinct paragraphs to maintain the reader's attention. Sometimes, written language is less energised and engaging than other communication methods, such as verbal presentations. So, when communicating using writing, remember to consider the intended audience to use the appropriate tone and format. Common examples of writing communication in the workplace include:

  • emails

  • documents and handbooks

  • memos

  • staff noticeboards and newsletters

  • posters and signs

Oral communication

Oral or verbal communication methods frequently occur when working in a team. Using excellent verbal communication skills can encourage employees to share ideas, collaborate and voice concerns in the workplace. Oral communication creates dynamic interactions, with the tone, non-verbal signals and setting impacting the delivery. It's vital to ensure you speak clearly and practice active listening to avoid miscommunication when using verbal communication methods. Oral communication methods often found in professional organisations include:

  • face-to-face meetings

  • informal conversation

  • virtual meetings

  • phone calls

  • presentations and speeches

Hierarchical communication

Hierarchical communication refers to the direction of communication within the company's structure. By understanding what type of hierarchal communication you are using, businesses can increase the effectiveness of their interactions. For example, upward communication in a business hierarchy refers to employees addressing their management with suggestions, concerns or ideas. While these communications may be informal conversations or written letters, employees understand company policies for approaching senior staff. Meanwhile, downward communication refers to when managers or team leaders address employees lower in the company's hierarchal structure.

These instances may occur when managers delegate a task, raise a grievance or offer constructive feedback. As the communicator has seniority in these meetings, managers are respectful and responsible towards the employee. Comparatively, horizontal communication refers to staff interacting with their peers and others on the same organisational level. Often, these instances are casual, day-to-day communications, so while they are essential in maintaining employee satisfaction, they remain professional.

Related: 4 types of communication (with examples)

Team-based communication

Team-based communications are informal business communications that promote collaboration, innovation and growth within a company. When communicating in a team, employees communicate freely through different channels and routes to discuss ideas and share important information. Often, team-based communication is fast-paced, from brainstorming in group meetings to sharing quick points on a team's shared electronic workspace. Thanks to the informal tone and format, team-based communications help promote creative and innovative responses to tasks, helping develop employees' problem-solving and teamwork skills. Often, due to the quick, conversational methods, these organisational communications do not leave paper trails.

Formal communication

Formal communications often take a written format, but they also include official meetings and announcements within an organisation. These communication types differ from informal communications, which may refer to a manager answering a question in passing or two employees discussing a project over lunch. Formal communications help set employee expectations, keep a clear record of events and maintain compliance with business legislation through written procedures. Additionally, formal communications tend to move through the company's hierarchal structure, and they help keep a practical, systematic approach to business.

Some examples of formal communications in businesses include:

  • policies

  • procedures

  • meeting minutes

  • memos

External communications

External communications refer to any publicly available or outward-going communication. People outside your organisation have access to these communications, so they remain within your company branding guidelines and use a consistent, friendly tone. Companies hire professionals like content developers and social media managers who specialise in developing positive brand images for some external communications, such as social media posts, press releases and marketing campaigns. External communications also include emails to partner organisations and meetings with contractors. So, all staff members receive training on maintaining a professional tone in external communications for their organisation.


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