DECLARATION

I here by declare that this presentation on ‘BUSINESS

COMMUNICATION’ is solely done by me as per the BBA (Banking &
Insurance) curriculum. The project is not copied from anywhere else. It is
my own efforts and hard work, which is being shown in the following pages.

Kirti Gupta
0651221806
(Candidate)

Counter Signed

H C Joshi

1
 CONTENTS

Page No.
Preface
Methodology 01
Introduction 02
Nature of Business Communication 03
Reasons for growing Needs for Business Communication 04
Process of Communication 05
Objectives and Functions of Business Communication 07
Importance & Role of Business Communication 09
Basic Forms of Communication 11
Media of Communication 15

Conclusion 25
Bibliography

2
 PREFACE

It is a matter of great pleasure to make this project on business

communication. It emphasizes on the clear & empathetic communication
skills necessary to build long lasting business relationships with various
stakeholders.

With globalization of business and the advent of technological advances

in information and knowledge, communication skills, both verbal and non-
verbal have become critical for success in all the fields.

The salient features of this project are as follows:

1. Key terms to enhance conceptual clarity.

2. Information of various types of communication.
3. Lucid, simple and conversational language.

I owe my gratitude towards Dr. NARENDER MOHAN, Director, DELHI

COLLEGE OF ADVANCED STUDIES and our co-coordinator Mr. H C
Joshi, who instead of their busy schedule have helped and provided their
guidance in making of this project.

3
 METHODOLOGY

These are two methods generally being adopted to collect the data i.e.,
from the primary sources or from the secondary sources. Data

Can be of two types: -

(1). PRIMARY DATA: In some cases the researcher may realize the need
for collecting first -hand information .As in the case of everyday life, if we
want to have first hand information or any happening or event, we either ask
someone who knows about it or we observe it ourselves, we do the both.
Thus, the two methods by which primary data can be collected are
observation & communication.

(2). SECONDARY DATA: Any data, which have been gathered earlier for
some other purpose, are secondary data in the hands of the researcher. In
contrast, those data, which are collected at first hand, either by the researcher
or by someone else especially for the purpose of the study are known as
primary data. Thus, primary data collected by one person may become the
secondary data for another. For example, the demographic statistics
collected every ten years are the primary data with the Registrar General of
India, but the same statistics used by anyone else would be secondary data
with that individual.

The data collected for this project has been taken from the secondary
sources. Various books of some famous authors have been used to make this
project. Also we have taken help of some websites concerning to this topic.

4
 INTRODUCTION
The term ‘communication ‘has been derived from the Latin word
‘communis’ that means ‘to share’. Communication may, therefore, be
defined as the process of sharing information, ideas and feelings so as to
create mutual understanding and co-operation among people.
Few definitions of communication are given below: -

 Communication is the process by which information is transmitted between

individuals and /or organizations so that an understanding response results.
–PETER LITTLE
 Communication is any means by which thought is transferred from one
person to another.
–CHAPPEL & REID
 Communication is the process of passing information & understanding from
one person to another.
–KEITH DAVIS

Communication is an attempt to share understanding by two or more

persons. It is a two-way process and is completed when there is some
response from the receiver of information.

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 NATURE OF BUSINESS
COMMUNICATION

An analysis of these definitions will reveal the following nature of

communication.

1) Communication is essentially a two way process. Information has not only

to be sent but has also to be received and understood. This process is incomplete
until the response or reaction based on proper understanding is available. Feedback
is an essential part of communication.
2) Communication is an ongoing process. When communication is absent
human activity ceases to exist.
3) Communication is essential in all types of organizations & at all level of
management.
4) Communication consists not only of facts but ideas & emotions too.
5) Organizational communication consists of a flow of messages through
several networks.
6) It takes two to complete communication. There should be a sender & a
receiver.
7) Communication is a goal-oriented process.

REASONS FOR GROWING NEED FOR BUSINESS

6
 COMMUNICATION

Effective communication has always been essential for success in

business. In recent times, communication has become all the more essential
due to the following reasons:

1. INCREASE IN SIZE: Business firms have grown tremendously in scale of

operations. A large business firm today employs thousands of people & has
rectories or offices in different parts of the world.

2. TECHNOLOGICAL ADVANCEMENTS: Rapid changes in science &

technology lead to obsolescence of technology & knowledge.

3. CUTTHROAT COMPETETION: Liberalization & globalization have

resulted in severe competition between public sector, private sector &foreign
banks.

4. TRADE UNION MOVEMENT: In banking sector, employees unions are

very strong powerful. Management must consult union leaders or several matters.

5. HUMAN RELATIONS: Effective communication between management &

employees is necessary to develop mutual trust & confidence.

PROCESS OF COMMUNICATION

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 The communication process is the inter relationship between several inter
dependent components. Different parts of communication process are
described below:

1. SENDER: The process of communication begins when the sender feels

the need for it & the idea generates in his mind. Sender or transmitter is the
source of the message & wants to transmit it for some purpose. The sender
may be a speaker, writer or an actor. He must have a clear picture in his
mind of what he wants to communicate.

2. MESSAGE: A message means what is being communicated. It may be

verbal or non-verbal. Message is the heart of communication.

3. ENCODING: The sender puts his ideas or facts into words, symbols,
pictures or gestures, which the other person can understand. This part of
message is called encoding.

4. CHANNEL & MEDIUM: Channel connects the sender with the receiver.
Medium is different from channel. For example, a letter is the medium
whereas mail service is a channel.

5. DECODING: The receiver translates the words & symbols used in the
message into idea & interpret it to obtain meaning. This is called decoding &
is opposite of encoding.

6. FEEDBACK: After deriving meaning the receiver reacts or responds to

the message. He sends back his response to the sender. This return flow of
communication is called feedback.

8
OBJECTIVES AND FUNCTIONS OF BUSINESS
COMMUNICATION

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 The basic purpose of communication is to convey information & ideas in
such a manner that will produce a response as desired by the sender. The
overall objective of business communication is organizations in to ensure
effective functioning of the organizations. Communication may be for any of
the following functions:

1. TO GIVE & RECEIVE INFORMATION: An individual often

communicates with others to receive information. In organizations, the
management uses communication to keep the employees well informed
about the goals, policies & rules. Managers also require information for
formulating plans & taking decisions.

2. TO PROVIDE ADVICE: Information tends to be factual & natural

whereas advice is subjective & opinionated. Advice may be given on
personal or official matters. Managers need specialized advice from experts
in matters like taxation, project finance, quality control, etc. Advice is more
effective when given through face – to –face contact.

3. TO PROVIDE COUNSELLING: Counseling is an organized &

specialized activity requiring professional expertise & an objective
approach. Face to face conversation with counselors helps workers to
improve their physical & mental health.

4. TO ISSUE ORDERS & INSTRUCTIONS: In order to get things done, a

manager issues orders & instructions to his subordinates. An order is a
directive to do something whereas an instruction indicates how to carry out
the order. Order involves assignment of task while an instruction specifies

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the way the task is to be done. Orders & instructions may be oral or in
writing.

5. TO IMPART EDUCATION & TRAINING: Education involves formal

communication over a long period so as to widen knowledge & skills. It
consists of both teaching & learning. Education may be provided to
executives, workers, customers & public.

6. TO RECEIVE SUGGESTIONS: Employees & customers are a useful

source of new ideas for business as they are in direct touch with operations
& procedures of banking. In addition to suggestions, reports, appeals,
grievances etc. are also collected from employees through communication.

7. TO ISSUE WARNING & NOTICE: Warning & notice are generally

given only after milder methods like advice & appeal fail to achieve results.
Warning implies a notice to caution people in special situations. It may be
oral or written. The purpose of warning should be to improve behavior rather
than to punish or humiliate the person.

8. TO IMPROVE MORALE: Morale reflects the mental health of people.

High morale about is necessary to improve efficiency & performance.
Communication about the policies & programs of the organizations helps to
improve the attitudes & morale of employees.

IMPORTANCE & ROLE OF BUSINESS

COMMUNICATION

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 Human beings have an inborn desire to communicate with each other.
Man is a Social animal & in order to socialize he makes use of language &
body movements. Communication has become indispensable to the success
& well –being of people everywhere.

According to Hibert Simon, “without communication there can be no

organization for there is no possibility then have the group influencing the
behavior of the individual.”

Sound communication plays a vital role in organizations in the following

ways:

1. EFFICIENT PLANNING: Accurate & up to date information concerning

the external environment & internal conditions is necessary for taking right
decisions at the right time. The quality of managerial decisions & plans
depends largely on the quality of information & its erective transmission.

2. TRAINING & DEVELOPMENT: Communication is an essential for the

orientation & on-going training of both workers & executives’.
Communication provides knowledge & the degree of learning depends to a
great extent on the communication.

3. MOTIVATION & MORALE: Communication plays an important role in

inspiring people to work hard & in fostering positive attitudes. Managers can
increase & job satisfaction of employees by keeping in close touch with
them.

4. COORDINATION: Communication is the most effective means for

unifying & integrating the efforts of individuals towards the common goals.

12
It serves as a cementing force in the face of narrow specialization &
facilitates teamwork.

5. LEADERSHIP: A leader can modify the behavior of his people through

tact & persuasion. Leadership becomes inspiring & effective when the leader
remains in close touch with his subordinates.

6. EFFECTIVE CONTROL: Communication from the boss serves as the

basic on which employees regulate their work & know how well they are
doing. A manager can correctly judge the performance of his subordinates
and take suitable remedial actions on the basis of feedback information from
them.

7. SOUND INDUSTRIAL RELATIONS: Communication creates a meeting

of minds & a meeting of hearts. It can bring people closer to each other.
Sound & open communication helps to improve relations between employer
& employees and between employer & trade unions.

8. COPORATE IMAGE: Communication is indispensable for every

organization to develop & maintain reputation or goodwill in society. A
business concern can keep itself in close touch with customers, investors,
dealers, suppliers & other sections of the society through various forms of
communication.
BASIC FORMS OF COMMUNICATION
A channel of communication is the route or path over which messages
flow from the sender to the receiver. The flow of messages should be

13
 carefully organized into a well-designed network of channels so that their
flow is smooth & free. There are two broad channels for communication –

 Formal
 Informal

FORMAL COMMUNICATION: -

Formal communication refers to the flow of messages along the

prescribed in the organizations structure. Formal channels are deliberately
designed & represent authority responsibility relationships between different
positions in the organization. Formal communication channels are
prescribed & controlled by managers & supervisors in the organization.

ADVANTAGES:
Formal channels of communication offer the following advantages –

1. Formal communication allows flow of information in an orderly &

authentic manner as it takes place along the officially prescribed routes.
2. Formal channels cover all subsystems of an organization. It is useful for
reaching out easily to the branches & offices of an organization spread far &
wide.
3. In formal channels of communication there is a tendency to filter
information. Therefore, managers at higher levels are not bogged down with
it.
LIMITATIONS:

1. Formal channels of communication tend to inhibit the free flow of

information, as messages have to pass through the prescribed routes.

14
2. Formal communication is slow & rigid. Therefore, they are time
consuming.
3. Formal communication channels are expensive as the messages are
generally in writing.

INFORMAL COMMUNICATION: -

Informal communication is also known as grapevine. It represents the

unofficial channels of communication, which are controlled by people
themselves rather than by the management.

Informal communication becomes routine under the following conditions:

1. When an organization is passing through a difficult period & its members
lack a sense of direction & develop feeling of uncertainty.
2. Employees form informal groups due to feeling of inadequacy & lack of
self-confidence.
3. Managers form a favored or coterie group due to which other employees
get a feeling of isolation or insecurity.

GRAPEVINE CHAINS: -
Keith Davis has identified four types of grapevine chains, which are as
follows:

1. SINGLE STRAND: In this type, information flows through a long line of

persons to the ultimate receiver.

2. GOSSIP WHEEL: It involves passing of information of a person in the

center to all around him.

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3. PROBABILITY CHAIN: Here one person transmits information at
random to others who in turn transmit further in a similar manner.

4. CLUSTER CHAIN: It involves selective communication in a group.

Cluster chain is the dominant grapevine pattern & most informal
communication flows through this chain.

ADVANTAGES:
Informal communication provides the following advantages:

1. VALUABLE FEEDBACK: Managers can obtain useful feedback

concerning their decisions & actions through the grapevine. Informal
channels provide feedback much faster than the formal channels.

2. SUPPORT TO FORMAL CHANNELS: The grapevine serves as a

supplementary channel or communication. Grapevine can be used to
transmit information, which is considered unsuitable for the formal channels
of communication.

LIMITATIONS:
1. INCREDIBLE: Informal channels of communication enjoy less
credibility. As the information spreads through the word of mouth it cannot
always be taken seriously.

2. DAMAGE TO THE ORGANISATION: Gossips & rumors are essential

part of grapevine. Grapevine may distort true picture. All kinds of stories
may be spread about responsible people & the image of the organizations
may be spoiled.

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HOW TO MAKE EFFECTIVE USE OF GRAPEVINE?
The following steps may be taken to make grapevine effective:

1. Keep the employees well informed so that they may not spread rumors.
2. As far as possible keep an open door policy without creating impressions
of cheap popularity.
3. Identify the leaders of informal groups & win their confidence so as to
feel the pulse of employees.
4. Organize fruitful group activities so as to or increase the self worth of
employees.
5. Involve employees through their leaders in the decision-making.

MEDIA OF COMMUNICATION
Several methods or means are used in communication. The different
media used in communication may be classified as follows:

17
1). VERBAL COMMUNICATION

(A). Oral
(B). Written

2). NON-VERBAL COMMUNICATION

(A). Sign language

(B). Body language
(C). Para language
(D). Space, surroundings and time.

VERBAL COMMUNICATION

The term verbal implies, use of words’, which makes language. Human
beings alone are gifted with the use of words. Verbal communication means
communication through speech and written words. The process of
communication involves the use of a common set of symbols between the
sender and the receiver. Words are the most accurate and powerful symbols.
Therefore, most of the communication in work organizations takes place
through words.

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ORAL OR SPOKEN COMMUNICATION

Oral communication means spoken communication or communication

through speech. A person learns to speak much before writing. In
organizations also people speaks much more and much before writing.
Therefore, speech or oral use of language is a widely used method of
communication; oral communication takes place through face-to-face talks
(both formal and informal), telephone, loudspeaker, etc.

ADVANTAGES:
1). IMMEDIATE FEEDBACK: The speaker can immediately understand
the reaction of the audience or group, he is addressing.

19
2). TIME SAVING: Oral communication is very fast. It saves the time
involved in writing the message.

3). ECONOMICAL: Oral communication saves the money spent on

stationery in an organization.

4). PERSONAL TOUCHES: Oral communication builds upon health

climate the organization by bringing superiors and subordinates closer. It is
an effective tool of persuasion.

5). SECRECY: Oral messages can be more easily kept confidential than
written messages.

LIMITATIONS:
1). POOR RETENTION: The listeners cannot retain oral messages in his
memory for a long time. The speaker himself may not recall what he
actually said.

2). NO RECORD: Oral communication provides no record for future

reference. In the absence of record, oral message have no legal validity.

3). TIME CONSUMING: Oral communication may not always be time

consuming. Sometimes meetings continue for a long without arriving at any
satisfactory conclusion.

4). MISUNDERSTANDING: Oral communication is likely to be

misunderstood due to poor vocal expression and noise. The speaker may not
be able to make him quite clear or the listener may be inattentive. This is

20
likely to be truer when the two individuals are not on good terms with each
other.

5). LENGTHY MESSAGES: Oral communication is not suitable for

transmitting lengthy messages. Some parts of vital importance are likely to
be missed when lengthy explanation is required.

6). LACK OF RESPONSIBILITY: Oral messages are not recorded.

Therefore it becomes difficult to hold person’s responsibility for mistakes,
inaccuracy, and untruth in oral communication.

7). IMPRECISE: People usually take less care when speaking than when
writing. Therefore, spoken words tend to be less precise than the writing
words. Often the exact point the speaker is trying to make is lost in a mass of
words.

WRITTEN COMMUNICATION

While oral communication is natural and spontaneous, written

communication requires conscious effort. Written communication involves
transmission of information through letters, notices, circulars, memos,
reports etc.

ADVANTAGES:
1). WIDE ACCES: Written communication is the most economical and
probably the only means of communication when long distances separate the
sender and the receiver of the message.

21
2). PRECISION AND ACCURACY: Written messages are prepared with
due thought and care. The communicator tends to be accurate and factual
because authenticity of written message can be challenged and verified.

3). REPETITION: Written messages can be read again and again. Therefore,
the message is likely t6o be understood better. There is little chance of any
part of the message being lost.

4). MECHANICAL EFFICIENCY: Messages can be written and

conveniently transcribed, transmitted, field and retrieved. Copies in any
numbers are also easy to make and distribute at relatively low cost.

5). PERMANENT RECORD: Written communication provides a permanent

record for future reference. Such written records of policy decisions and
performance in the past serve as a good guide for decision making and
planning in future.

LIMITATIONS:
1). TIME CONSUMING: In addition to the time involved in sending written
messages, time has to be spent in putting the messages in writing. As much
time is wasted, it is not suitable when the message is to be sent immediately.

2). COSTLY: Written communication is more expensive than oral

communication. Paper and ink typing costs are involved in addition to
postage, etc. If the message is poorly drafted written communication is
effective.

3). LACK OF SECREACY: It is difficult to keep written messages

completely secret.

22
4). IMPERSONAL: Written messages tend to be formal and there is lack of
personal touch. Therefore, the receiver is less receptive.

5). DELAYED FEEDBACK: Immediate feedback is not possible in case of

written communication. The sender of the message has no opportunity to
judge the reaction from the facial expressions of the receiver.

NON-VERBAL COMMUNICATION

Human beings communicate in many ways other than through words.

Words often fail to convey the exact meaning. Therefore, pictures, drawings,
sounds are often used to convey messages. All these means (other than
words) used in communication are known as non-verbal communication.

SIGN LANGUAGE
Sign language involves use of audio and visual signals.

1). AUDIO (SOUNDS) SIGNALS: Drum beating is used to make important

announcements and to tell people to assemble at a specified place. Several
types of alarm signals are used to caution people.

2). VISUALS SIGNS: A visuals aid is an illustration in tabular, graphic or

pictorial form. Visual aids help to get the messages across more effectively
by making the message interesting, by clarifying and simplifying the topics,
and by highlighting important points.
Given below is a checklist for creating effective visuals:
(a). Visuals should be simple and easy to understand.
(b). Depict the data accurately and stress main points.
(c). Visuals should be appropriate for the intended audience.

23
(d). Typeface and fonts should be clear and readable.
(e). Keep the captions short and informative.

BODY LANGUAGE

Human body and its various parts play an important role in

communication. The study of messages conveyed by body movements is
known as body language or Kinesics. Just as language uses symbols to
convey meaning, our body conveys messages. Man may play with words but
his body can tackle issues before they become problems.
Body movements of a person are guided by his thoughts and feelings. The
nodding of head, blinking of eyes, waving of hands, shrugging of shoulders,
etc. are all expressions of human thoughts and feelings.
The role of different parts of the body in communication is given below:

(1). HEAD: The position of our head conveys a lot of meaning. There is an
old saying ‘Hold your head high’. It is a sign of honor, self-respect and self-
confidence. A head bent low, on the other hand, shows modesty, politeness
and guilt.

(2). FACE: Face has been called the mirror of the mind because whatever a
person feels deep inside is reflected on his face. A great amount of regular
practice is required to control feelings and adopt positive attitudes in all
situations.

(3). EYES: Eyes communicates our deepest feelings. Therefore, eye contact
is of great importance in face communication. Eyes adopt different positions
in different situations. Fixed eyes show concentration, raised eyes indicates
surprising or fear; smiling eyes reflect happiness.

24
(4). GESTURES: Gestures refer to the movement of our arms, legs, hands,
torso, etc. Arms spread out convey the meaning of wide, shuffling legs
indicate nervousness, an erect torso reflects intensity.

(5). BODY SHAPE AND POSTURES: Standing or sitting erect leaning

forward or backward, stretching or bending sideways all conveys meaning.
A person can make positive or negative impressions of himself or others
through his body postures.

PARA LANGUAGE

The word ‘Para’ means ‘like’ and therefore, Para language is ‘like
language’. It is non-verbal because it does not involve use of words. But it is
like verbal communication because it is related to the way words are spoken.
A wide range of signs is used in Para language.

(1). VOICE: Voice is the most important element of Para language. The
voice used by a speaker reveals his education, training, temperament and
general or background. Voice can be more clear or unclear, pleasant or
unpleasant, cultivated or musical and so on.

(a). Speaking speed: A speaker may speak at different speeds on different

occasions or during different parts of speech. It is not desirable to speak fast
or slow at all times.

(b). Pitch variations: Speaking at length on the same level of pitch makes the
speech monotonous or boring. Therefore, wide variations in pitch are made
during a speech.

25
(c). Volume variations: It means loudness of the speech. Volume variation
puts life into our speaking. The loudness of voice should be adjusted
according to the size of the audience.

(e). Non-fluencies: Non-fluencies refer to utterances such as ‘oh’, ‘ah’, ‘um’,

‘ok’, ‘you’, etc. Careful and judicious use of these utterances improves the
fluency of the speech.

(2). WORD STRESS: Proper word stress is highly important in

communication. A speaker can change the meaning by putting stress on a
word here or a word there in the same sentence.

SPACE, SURROUNDINGS AND TIME

Non-verbal signals, which mutually understand, by the sender and the

receiver originate from many sources. One such important source is the
space around us, which communicates in its own way. Communication
experts call this dimension of communication ‘proxemics. It is the study of
how we communicate with the ‘space language’.

(1). Intimate: Physical contact to18 inches

(2). Personal: 18 inches to 4 feet
(3). Social: 4 to 12 feet
(4). Public: 12 feet to as far as one can see or hear.

26
SURROUNDINGS

The physical environment around us speaks their own non-verbal language.

Surroundings consist of a large number of objects. Two important parts of
surroundings are color and layout. We get meaning from our surroundings.

(a). COLOUR: Colors have been associated to convey meaning since time
immemorial. Different colors are associated with different attitudes,
behavior patterns and cultural backgrounds.

(b). LAYOUT AND DESIGN: The space arrangement of an office, the

furniture and its design, etc. is important in communication. A tastefully
decorated office creates good impression.

TIME LANGUAGE (CHRONEMICS)

There is a saying “time is money”. Under time language we send out signals
indicating the importance of time to us. Time management has become a
very important part of management.

27
 CONCLUSION

Conclusively we can say that communication is a necessary condition

of human existence and social organization. Taking all these factors into
account we can function satisfactorily and achieve the goals with the help
of effective communication that operates both internally and externally.

The most important of these functions are:

(1). Establishing and dissemination of the goals of an enterprise.

(2). Developing plants for their achievement.
(3). Organizing human and other resources in the most effective and
efficient way.

Externally, communication relates an enterprise to the environment

outside. It is through information exchange that managers become aware
of the needs of customers, availability of suppliers, the claims of
stockholders, the regulation of governments, and the concerns of
community. It is through communication that any organization becomes
an open system interacting with its environment and responds to it
fruitfully, purposefully and desirably.

28
 BIBLIOGRAPHY

(1). Dr. C. B. Gupta, Personality Development & Communication skills -1,

Published by Mayur Paperbacks, Year 2007.

(2). K.K.SINHA, Business Communication, Published by Galgotia

Publishing Company, Year 2006.

(3). T.N.Chabbra, Organizational Behavior, Published by Dhanpat Rai &

Company. (Pvt.) Ltd., Year 2005.

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