A Grace College Study on Organizational Communication

Communicating between different parts of a business is not as simple as it sounds. If you’re a business leader interested in improving your communication structure in the organization, you’re in the right place. If you want to take organizational communication to the next level, a great next step is to check out Grace College’s online Master of Business Administration program or Master of Nonprofit Management degree. But first, let’s start with a closer look at types of organizational communication.

On the surface, organizational communication seems to be a focus topic for businesses and nonprofit organizations. However, according to research from the Society for Human Resource Management (SHRM), many companies are losing money due to poor communication.

One survey of 400 companies with 100,000 employees cited an average loss per company of $62.4 million per year from inadequate communication to and between employees. A separate article said that miscommunication costs smaller companies of 100 employees an average of $420,000 per year.

“The critical problem—which you may also recognize—is that although worldwide surveys continue to confirm the importance of good communication, these same surveys consistently report that prospective and current employees are doing poorly enough to be labeled ‘deficient’ in their communication skills,” SHRM said.

What Is Organizational Communication?

Organizational communication simply refers to the communication structure in organizations and nonprofit environments.

Because organizational communication encompasses everything from individual to mass communication, it is an extensive field. “As a result, organizational communication is as broad in its domain as the field of communication as a whole,” according to Journal of Communication. “Furthermore, communication in organizations has been studied not only by communication scholars, but by scholars in most of the social sciences. This breadth has given the area eclecticism in approach, theory, and methodology that is a strength in its diversity … for at least the past 20 years, the field has been repeatedly and extensively reviewed and is arguably the most thoroughly reviewed domain of communication research.”

With a degree from Grace College Online, you can become an expert in this field. The following sections introduce only the basics for select types of organizational communication.

Formal vs. Informal Communication

Formal communication is associated with the formal organizational structure of the company. Ideally, communication flows smoothly, accurately, and timely through the proper channel appropriate to the specific company. For instance, seniority will dictate how communication will flow from one department to another or from specific managers to specific employees. Certain tools and technologies are often used to aid in formal communication.

Formal communication can have several forms.

• Meetings
• Conferences
• Telephone calls
• Company newsletters
• Performance reviews

The strength of formal communication is that it standardizes communication, ideally benefiting the clarity of each message. Its primary weakness is that it undermines the free and uninterrupted flow of communication, which is what defines informal communication.

Informal communication includes casual, social, and personal messages in the organization. Also referred to as the grapevine, informal communication and messages involve person-to-person communication networks of employees that are not officially sanctioned by the organization. This type of communication cannot be prevented. The strength and weakness of informal communication is that it is spontaneous and quick. This can lead to meaningful insights or inaccurate, misinterpreted, and distorted information.

Downward, Upward, or Horizontal Communication

There are three general types of directional communication that take place in corporate and nonprofit organizations.

• Downward communication flows from superiors to subordinates. This typically takes the form of orders, instructions, and policy directives to people at lower levels in the company. Examples include feedback on job performance and information about policy and procedures.
• Upward communication flows from subordinates to superiors. This is the opposite of downward communication; it originates from people at lower levels and is directed to those who are above them. Examples include suggestion statements, reactions, reports and proposals.
• Horizontal communication flows from people who are on the same level of the organization. This type of directional communication enables people to interact with their peers without involving people at other levels in the company. Examples include the communication between subordinates of one boss or between managers.

Enhancing a Career in Business or Nonprofit Management

Organizational communication is one of the crucial aspects of a well-designed business or organization. Through Grace College online you can build upon this study and put a communication structure in organization to work in a nonprofit setting with our Master of Nonprofit Management degree or in a corporate setting with our Master of Business Administration degree. 

Both of these Grace College online programs’ courses are delivered with an intentional applied emphasis. Consistent with learning-by-doing, course assignments allow students to use course concepts in their current employment setting. This allows students to quickly develop an initial proficiency with the concepts being covered and encourages students to demonstrate to their employers the value-added nature of the program..