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Types of Organizational Communication

December 19, 2017

White male and black female coworker discuss a project in front of a computer screen.

Organizational communication seems like a topic that businesses should concentrate on. 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 cost 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 communication that takes place in business 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.”

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 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.

Pursuing a Career in Business

Grace College’s online business programs provide students with the knowledge and skills needed to positively impact an organization. Graduates are prepared for entry-level and advanced marketing roles, as well as management positions and other opportunities for advancement. These faith-based programs apply biblical values to coursework.

Grace’s fully online bachelor’s degree in business administration focuses on the skills and tools graduates need to adapt and excel in the business world. This GOAL (Grace Opportunities for Adult Learners) program is designed for students balancing personal commitments while pursuing an education. It is priced substantially below most degree completion programs and can be completed in as little as 16 months.

The fully online MBA provides students with a strong foundation in marketing, accounting, finance and human resources as well as coursework in entrepreneurship. This program can help graduates pursue leadership opportunities in business.

The fully online master’s in nonprofit management equips students with the knowledge and skills to succeed in marketing communication, applying technology, creating and training staff, raising funds and improving efficiency within an organization.