UNIT 5 CHANNELS OF BUSINESS COMMUNICATION

Structure

5.0 Objectives
5.1 Introduction
5.2 Factors Influencing Communication Channels
5.3 Organizational Structure Based Channel
5.4 Direction Based Channel
5.5 Expression Based Channel
5.6 Let Us Sum Up
5.7 Key Words
5.8 Answers to Check Your Progress
5.9 Terminal Questions

5.0 OBJECTIVES

After reading this unit, you should be able to:

• state the meaning of channel of communication;

• classify different channels of communication;
• distinguish between formal and informal channels of communication;
• explain channels on the basis of direction of communications;
• discuss channels for different ways of expression and
• describe channels at different level of business organisation.

5.1 INTRODUCTION

In Unit 4, you learnt about the purpose of business communication, which includes giving
information, improving knowledge of remote workers, improving customers’ satisfaction,
building a better image of the company, etc. In this unit, you will read about different types of
channels for business communication in detail.

Communication channel is the medium or means through which the message sent by the
sender travels to the receiver. For example in Television, you must be seeing and hearing
different events on different channels. Channel combines audio signal with a video signal;
together and they convey the message to the audience. In radio, channel has only audio
signal. Similarly while speaking or writing, we use a channel to convey a message. Thus,
television is an audio-video channel, whereas radio is only a audio channel. There are other
channels, such as telephone, voicemail, public address system, Invoice Internet Protocol
(VoIP). There are only written channels, such as letters, memorandum, invoices, blogs,
tweets, e-mails etc. The choice of the channel depends on type of communication , i.e.
whether it is verbal or non-verbal; if it is verbal, whether it is face-to-face or audio, and if it is
non-verbal, whether it is written in the form of hard or it is in the electronic form. It also
depends on the size of the business organization and areas of its operations; i.e. whether it is
big or small, national or multinational. Depending on all these factors various types of
channels are available. The Information Technology has made various channels and
communication platforms available depending on the need of the business organization. An
appropriate channel for communication can be selected. The choice of the channel in
business communication has important ramifications, because if a proper channel is not
selected and the message is not delivered in time or it is delivered in a distorted form,
business organisation may suffer not only financial losses, its corporate image may also be
blurred. In this unit, you will learn the factors influencing choice of a channel and
classification of channels.

5.2 FACTORS INFLUENCING COMMUNICATION CHANNELS

The following factors help in choosing a channel for the communication:

(i) The nature of message: Before choosing a channel, it is utmost important to

critically assess the nature of the message. In this context, think over the following
points:

• Is the message formal or informal?

• Is it necessary to keep a record of the message for future reference?
• Is it urgent?
• Is it confidential or sensitive?
• Is it general or specific?
• Is it for an individual or a group?
• Is the individual a peer, a higher-up, or someone you lead?
• Is it for your team or the whole company?
• Is it one-way or two-way communication, i.e.is a response expected?

After considering the above factors, it becomes easy to choose a channel. For example, a
formal business communication whose reference may be required in future and whose
response is required, should be sent through a verbal channel preferably in the written
form. But in case, it is urgent also, an electronic mail (e-mail) may be better. If it is not
formal, but is urgent, a Whatsapp message can be sent or a telephonic talk will also be ok.
Another example may be cited here: a marketing personnel of the company is negotiating
the price of an instrument with a buyer, who is insisting on a price lower than the quoted
price, for clinching the deal, marketing personnel needs a nod from his manager.
Therefore, he would like to provide detailed information to his manager. At the same time,
he would require feedback from the manager for further negotiations. In such a case, a
video-chat may be preferred. In case it is confidential and is for one person, a telephonic
conversation will be most appropriate.

(ii) Purpose of the message: While considering purpose of the communication,

following factors should be considered
• Is it for motivation?
• Is it for sharing of information?
• Is it for socialisation?
• Is to control your subordinates?
• Is it for the training of the staff?
• Is it for placing an order for the grocery?
After considering these points, one may choose an appropriate channel. For example, if it is
for the motivation or for the training of the staff, a face-face channel, such as audio-video
channel would be preferred. In case it is just for sharing an information, a telephonic
conversation may be preferred. But if an order is to be placed for a pizza or grocery, an app
of the concerned supplier may be used through smartphone.

(iii) Is the interaction with the receiver required? If yes, face to face channel will be
better. For this purpose, Whatsapp or Skype can be used.
(iv) Is it about showing some features of device? In this case, visual aids will be helpful
to impress upon the recipient of the message. As described in the previous unit, in
recent years, several such channels including Artificial Intelligence, Googl’s Duplex.
Blockchain, Augmented Reality (AR) and Virtual Reality (VR) Technologies,
Internet of Things (IoT) Technology and LiFi Technology have been developed. .
(v) Size of audience: It is one person or a small group or a large audience. As mentioned
earlier, for one to one interaction, channels such as telephone, Whatsapp, Skype can
be used. But if the message is for a mass, audio-visual channel is preferred.
(vi) Background of the audience: It is very important factor in choosing the channel. Is it
a group of managers, or subordinates or teammates? Are they well informed about
your products or you are going to introduce your products for the first time? Are they
of urban background or from rural background? For a meeting of the managers where
you are going to discuss company’s progress and achievements, audio-visual channel
would be preferred where you can explain your points with the help of graphs, bar
diagrams, etc. When you are making publicity of your products particularly in the
rural area, a channel such as Power Point will be most appropriate where you can
show attractive slides of your products including their popularity in the urban areas.

5.3 ORGANISATIONAL BASED CHANNEL

In an organization, there are primarily two types of channels – Formal and informal. Let us
learn them in detail.

Formal:
Formal communication is transmitted through pre-defined formal channel set by the
organization. Formal communication is typically sent by top management to various
departments that forward it to the respective lower level employees. It follows organizational
procedures. Formal communication channels include goals, policies and procedures of an
organisation. It has following characteristics:

(i) It occurs within the organizational framework.

(ii) It maintains formal rules of communication.
(iii) It is used for planning, controlling and organizing the activities.
(iv) Authority can be delegated to subordinates through formal communication.
(v) It has written record and can be used as evidence.

An example of formal communication is given in Figure 5.1.

 Source: GCF, LearnFree.org
Figure 5.1: A sample of the formal communication

There are several advantages and disadvantages of the formal communication.

Advantages
The formal channel has many advantages which are listed below:

1. Permanent record: A copy of the formal communication is always maintained in the

record and can be used as a reference or evidence. For example, a company clinches
a deal on a certain price and delivers the consignment. But after receiving the item,
receiver refuses to pay the settled price. In that event, the company can go to the court
of law and can use formal communication as a legal proof.
2. Increases efficiency: As it is used by following predetermined rules and format, it
increases the overall efficiency. In the above example, the bill having the negotiated
price would be sent to the receiver. No other formalities are required and thus time
will be saved.
3. Inculcates discipline: The formal communication system inculcates discipline in the
workers as they follow formal order carefully, because otherwise it may invite
disciplinary action.
4. Better coordination:. Formal communication induces coordination among the staff
as they have to follow written instructions.
5. Ease of delegation of authority: If need be, authority can be delegated to the
subordinates through this type of communication. For example in the above case, the
marketing manager would delegate his/her authority to the sales person to negotiate
the price and clinch the deal.
6. Free from mistakes: As formal communication has to follow well-defined rules and
regulations, there are lesser chances of mistakes in exchanging information within the
employees. In the above case, as every document would be a formal document, there
are no chances of confusion.

Disadvantages
In spite of many advantages, formal channel has some disadvantages too, which are given
below.
1. Slow: As the draft of the communication has to pass through many officers and get
approved by them before it is sent, it is slow.
2. Wastage of time: Due to a lengthy process of approval, much time is wasted.
3. Suppresses ingenuity: As it has to follow set rules and regulations, the ingenuity of
the employees to give suggestions out of the box is suppressed.
4. Inflexibility: As the communication follows set rules and regulations, there is no
flexibility.
5. Lack of personal touch: Many matters are amicably settled just due to personal
understanding and relations. But there is no scope of personal touch in the formal
communication.
6. Escapism: In case of an unpleasant decision or ambiguity in the rules, people shirk
their responsibility and try to escape.

Informal:

It is a non-official, non-structured route of communication. Through informal

communication, good relationship is fostered by the company. Through informal discussion,
mutual understanding and solidarity are strengthened in a team. Employees give feedback
through informal channel to their supervisors. It has following characteristics:
(i) It is fostered through social relationship. No superior subordinate hierarchy comes in
the way. A team manager can invite his team-mates to lunch for celebrating success
of the project.
(ii) It is a two-way channel, i.e. both exchange their ideas/experience etc.
(iii) It does not have a definite path, i.e. conversation is beyond restriction of the
organisation and can proceed in multi-directions.
(iv) There is a possibility of distortion of the communication. It may take the form of
rumour also.
(v) It is a better way of resolving disputes, on many problems cannot be solved through
formal channels.
(vi) It motivates employees, as they feel being given importance.

There are some advantages and disadvantages of the informal channel.

Advantages

The informal channel has some distinct advantages which are as follows:
1. Encourages ingenuity: Employees are encouraged to make suggestions and new
approach.
2. Increases efficiency: As the employees can freely exchange their opinions, their
efficiency is enhanced in solving a problem.
3. Establishes cordiality: In informal communication, personal relations play a major
role, which creates mutual understanding and cordiality.
4. Saves time: As it has not to pass through a long protocol, it is fast and saves time.
5. Solution to problems: Before formalising a particular line of action, the management
can involve the staff to know their problems, conflicts and complaints and the like. In
this way, a mutual agreeable approach may be followed.
6. Induces sense of belonging: As the employees are involved in decision making, they
develop a sense of belonging for the organization.

Disadvantages

In spite of many advantages, informal channel has some disadvantages also as shown below:

1. No legal evidence: Informal communication does not have any legal standing.
2. May create confusion: As informal communication does not follow set rules and
regulations, there are chances that the intended message is distorted.
3. No secrecy: As the informal communication is finalised after discussing with several
people, its secrecy is not maintained. In the case of confidential matters, it is not
desirable.
4. Incomplete information: For informal communication, a particular person is not
responsible. Under these circumstances, the information may be incomplete. It may
cause delay in the execution of the project.
5. Induces irresponsibility: For the mistakes in an informal communication or its
incompleteness, a particular person cannot be held responsible. This may lead to
irresponsibility on the part of the employees.
6. May cause rumours: As the informal communication does not follow set rules and
regulations, people may speculate about it, which becomes a matter of rumours.
5.4 DIRECTION BASED CHANNEL

On the basis of direction of communication channels are classified in three categories,

namely downward, upward and horizontal.

Downward:

The channel used for transmitting communication from top to bottom of the hierarchy in an
organisation is known as downward channel. It is sometimes called lower level
communication also. Downward communication has following objectives:

(i) To communicate goals, new strategies, information about specific targets to the lower
level of the business organisation.
(ii) To communicate job instructions, or guidelines.
(iii) To announce decisions, promotions.
(iv) To seek performance feedback.
(v) To invite suggestions.
(vi) To motivate staff.

To elaborate the point, an example may be cited here. The CEO of a company decides to
establish a new manufacturing unit urgently and he/she wants to depute the staff from the
existing staff temporarily before new recruitments are made. For this purpose, he/she will ask
heads of the various departments to suggest the names of the appropriate persons who could
be relied upon and could be deputed.
A sample of downward communication is shown in Figure 5.2.
Source: www.businesscommunicationarticles.com

Figure 5.2: A sample of downward communication

Upward:

It refers to the communication by the lower level workers to the higher-ups in an

organization. It is known as upper level communication also. Upward Communication has
following characteristics:

(i) To make the leader and management aware of the problems and exceptions to set
routine.
(ii) To convey idea and suggestions
(iii) To make the management aware with the performance of individuals and departments
(iv) To convey grievances and disputes of the workers.
(v) To send financial and accounting information, such as cost, payments to be received,
interest on investments, levies, etc.

As an example, workers in the production department feel that the machinery they work upon
has become obsolete and it would in the interest of not only the company but also for their
safety, if the old machinery is replaced by the new one. They would channel their suggestion
to the higher hierarchy through their group leader/manager.

A sample of upward communication is shown in Figure 5.3.

Source: www.businesscommunicationarticles.com
Figure 5.3: A sample of upward communication
Horizontal:

The channels used for communicating among the persons of the same rank are known as
horizontal channels. It is used to the business organization of greater size and complexity. It
can be formal or informal, but basic purpose is coordination among different departments in
an organization. Horizontal communication may be one of the two types:

(i) Intradepartmental: These messages are exchanged between members of the same
department or division.

(ii) Interdepartmental: These communication facilitates execution of joint projects in

which more than one departments of an organization are involved Horizontal
communication has following advantages:

a. It improves coordination and understanding

b. Free exchange of views
c. Time Saver

For example, the marketing department has the possibility of receiving a bulk order provided
the quoted price is lowered and the order is complied with on an urgent basis. In this case,
head of the marketing department will contact head of the finance department to enquire
about the possibility of lowering the price and also head of the production department to
enquire about the availability of the said item in sufficient quantity.

A sample of horizontal communication is shown in Figure 5.4.

Tanni Textiles Ltd.

24 Motijheel, Dhaka-1000. 1st March 2004

Manager
Human Resources Department.

Sub: A request for skilled salesmen.

Dear Sir,

We are going to increase our sales in the Dhaka region in the coming month. Now we need
50 skilled salesmen to serve our purpose.

I would appreciate it if you take all steps to appoint the mentioned salesmen. Truly yours,

Md. Suvro Khan

Sales Manager

Source: www.businesscommunicationarticles.com
 Figure 5.4: A sample of horizontal communication.

Check your Progress A

1. What is horizontal communication channel?

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2. Write two distinctions between formal and informal channels.
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3. Write two disadvantages of the formal communication channel.
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4. The workers in the production department want bonus. Which channel will they use?
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5. Which of the following statements are “True or False”?

(i) A formal message follows rules of the organization.

(ii) An informal communication can be even between the manager and a worker.
(iii) Job instructions are given through upward communication.
(iv) Grievances and disputes can be conveyed through downward communication.
(v) An appointment letter is always sent through written channel.

5.5 EXPRESSION BASED CHANNEL

On the basis of ways or means of expression, business communication channels are of two
types: Oral and Written:

Oral:
Oral channels are used for the transmission of spoken words. They include: telephone,
mobile phone, video-chat, mobile conferencing, in-person presentation, face to face
interaction, speeches, lectures, etc.

Commonly used oral channel are as follows:

Face-to-Face or Personal Communication: This is one of the richest communication

channels that can be used within and without an organisation. Some Apps such Sky Crew,
WhatsApp make it possible. It is particularly helpful because physical presence, body
language and tone of the speaker’s voice help the recipient to interpret the message. There
are no chances of ambiguity as sender and recipient face each other and clarify any point if it
is not clear. The speaker can know whether recipient has understood his/her message and can
ask the question to ensure it.
Broadcast Media Communication: Television, radio, loudspeakers fall in this category of
media communication channel. These media are used while addressing a mass audience.
The business organizations use these channels while advertising their products.
Loudspeakers are used in the annual general meetings of the company. The CEO of a
multinational company can address his global sites by having a television feed broadcast.

Mobile Communication Channels: A mobile communication channel is used when a

private or urgent message is to be communicated to an individual or small group. It this case,
both options, i.e. face-to-face or audio are possible. As the recipient is in direct conversation
with the speaker, he/she can interpret speaker’s tone along with the message.
These days, mobile communication channels have become quite popular for placing the
orders for grocery, making reservation in trains, bus, etc. and buying tickets for the theatre.

Electronic Communication Channels: These channels include e-mail, internet, intranet,

social media, platform, such as Facebook, Twitter, Instagram etc. This channel can be used
for one-to-one, group or mass communication. Although it loses personal touch, it is more
effective. However, while using this channel, ambiguity, sarcasm must be avoided, unless it
is necessary.
In business enterprises, e-mail has become quite popular as they can send information about
new arrivals and their discount offers by a click of mouse to a large number of customers at a
time.

There are many advantages and disadvantages of the oral business communication.

Advantages

Oral communication has many advantages. In a recent survey it was found that more than
55% of the executives preferred oral communication. Main advantages of the oral
communication are as follows:

1. Immediate feedback: The speaker gets immediate feedback about the reaction of the
receiver, i.e. whether he/she is agreeable with what the speaker proposes or he/she
disagrees. The tone of speaking of the receiver also gives the impression of his/her
reaction.
2. Time saving: It saves time as no draft of the communication is prepared, processed
and finalised. In case of the work-load being high, the executive often prefers this
mode of communication.
3. Personal touch: Oral communication has a personal touch. When two persons talk,
they first enquire about the wellbeing of each other, which creates an environment of
cordiality.
4. Saves costs: It saves costs as in this mode of communication, no paper, pen, computer
or stamp, etc. are used.
5. More effective: As the executive speaks, his/her personality and executive powers are
reflected during the conversation. The tone, assertiveness, pitch and intensity of the
voice convey the feelings.
6. Flexibility: Depending on the situation and demand of the other party, more attractive
terms, conditions, price, etc. can be offered immediately. Thus, oral communication is
flexible.
7. Maintaining secrecy: When it is a conversation between two persons, confidentiality
can be maintained.
Disadvantages

In spite of many advantages, oral communication has some disadvantages also. Main
disadvantages are as follows:

1. No record: No record is normally maintained of the oral communication.

2. Misunderstanding of the word: Sometimes due to technical fault or otherwise, the
actual message is not understood, which may create misunderstanding and main goals
of the organization may be defeated.
3. Incoherent speech: Sometimes the sender is not able to speak coherently due to weak
command on the language or slang. In such cases receiver may not understand the
meaning of a message and confusion may be created.
4. Possibility of omitting main subject: Sometimes during the talk, the speaker may
deviate from the subject and may forget the message altogether. So, expected result
may not be achieved.
5. Expensive: A long oral communication, particularly over long distances, may be
expensive.
6. Delayed decision: In spite of oral approval, the party may insist for written
communication. In this way, decision making is delayed.

An example may be cited here which illustrates both advantages and disadvantages of the
oral communication. Salesmen of two companies negotiate with an educational institution for
the supply of an instrument. Head of the institution insists on a lower price. The salesman of
company A has access to higher-ups on mobile and seeks their permission which is given
orally. On the other hand, salesman of company B writes to the higher-ups for seeking the
permission. They accept the offer, but the written permission reaches the salesman very late.
The company A has already succeeded in clinching the order.

Now let us look on another aspect. In the case of company A, there is no written document
about the permission for the lower price. Due to some confusion, the boss of the salesman A
refutes that he ever gave his consent for the lower price. Obviously, there would be much
problem for the poor salesman.

Written:

It includes letter, policy documents, memos, brochures, manuals, notices and announcements,
etc. Advertisements in newspapers and magazines also come in this category. The recipients
can contact the organization through other channels in case additional information is sought
for.

It may be added that e-mails discussed under electronic communication channel is also a
written communication channel, only difference being that it is written in the digital form,
whereas other communications described above are in the form of hardcopy. Formal
business communications, such as recruitment letters, contracts, budgets, quotations, etc. are
always in the written form.

Written message has many advantages and disadvantages.

Advantages

As mentioned earlier, written channel has several advantages which can be listed as follows:

1. Permanent record: The documents of written communication form a permanent

record, which can be referred whenever needed. It can be produced as a legal
evidence in the court of law.
2. Easy to preserve: In contrast to the oral and non-verbal communication, written
message can be preserved for a long time. If need be, important information can be
retrieved from the preserved documents.
3. Better way of presenting complex matters: Complex project reports are better
presented in the written form, which can be explained with the help of graphics, bar
diagrams, etc.
4. Prevention of wastage of time and money: As the written communication is centred
on the main issue, it prevents wastage of time and money.
5. Can be delivered to many persons at a time: The written message can be sent to
many persons at a time. For example, the e-mail of the message can be sent to a large
number of clients/employees with a click of mouse. Now it has become a preferred
mode of sending written message.
6. Accurate presentation: Through written communication, the managers can present
the information in an accurate and clear manner. There are no chances of ambiguity
and confusion.
7. Possibility of correction before sending: The written message can be checked and
corrected before sending.
8. Reflects image: A well drafted message typed on an attractive letterhead of the
company and sent in a good quality of envelop conveys good images of both the
person and the organization.

Disadvantages

In spite of many advantages, written communication has some disadvantages also, which
are given below:

1. Takes longer time: Drafting and preparation of the written communication take
much time. Thus, it is a time consuming channel. It costs valuable time of both the
writer and the reader.
2. More expensive: It is an expensive mode of communication channel as it requires not
only paper, pen, ink, computer, etc. but also the staff who prepares it.
3. Delayed response: In this mode, response is delayed as draft of the proposed reply is
first prepared, which is then approved by a chain of the executives. Thus it takes
much time before the written response can be sent.
4. Difficult to maintain secrecy: As the written message passes through a chain of the
persons before it is sent, it becomes difficult to maintain its secrecy.
5. Delay in decision making: It is obvious that due to various reasons, written response
is delayed which causes delay in decision making.
6. Cost in record keeping: Maintaining and preserving the written documents involve
extra costs.

If we look at the example given above, the salesman will have no problem as everything will
be in black and white.
Check Your Progress B

1. Write two advantages of the oral communication.

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2. Write two disadvantages of the oral communication.
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3. Write two advantages of the written communication.
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4. Write two advantages of the mobile communication device.
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5. Fill in the blanks:

(i) In oral channel ................... is quick.

(ii) Face-to-face is the ................... communication channel.
(iii) E-mail is ................... channel.
(iv) Loudspeaker is ................... channel.
(v) Policy documents are sent through ................... channel.

5.6 LET US SUM UP

Communication channel is the medium or means through which the message travels to the
recipient. Choice of the channel is determined by many factors, main of which is the type of
message. Business communication channels can be classified on several basis, namely
organizational structure, direction and way of expression. In an organisation, there are
primarily two types of channels – Formal and informal. On the basis of direction,
communication are of three types – downward, upward and horizontal or lateral. Downward
communication flows from the top level of the hierarchy to the lower level of the staff,
whereas upward communication originates from the lower level to the higher-ups. In
horizontal communication, personnel of the same rank communicate.

On the basis of way of expression, communication are of two types – oral and written. Oral
channels have many advantages, such as, fast, quick feedback, mutual understanding, etc.
There are different types of oral channel, e.g. face to face, broadcast media, mobile
communication channel. Written channels include e-mail, letters, memos, etc. Written
channel has the advantage that it can be preserved as a proof.

5.7 KEY WORDS

Electronic or Digital Form: Involving or using numerical digits expressed in a scale of

notation, usually in the binary system, readable and manipulable by computer. It cannot be
touched. It is also called soft copy.
Ramifications: Consequences.

Feedback: A reaction or response to a communication.

Background of the Audience: It can be a several types for example, on the basis of
education, on the basis of profession, on the basis of social status, etc.

Foster: To promote the growth

Interdepartmental: Between different department.

5.8 ANSWERS TO CHECK YOUR PROGRESS

A 1 (i) True, (ii) True, (iii) False, (iv) False, (v) True

B 1 (i) Feedback, (ii) Richest (iii) Electronic or written,

(iv) Broadcast media (v) Written

5.9 TERMINAL QUESTIONS

1. Discuss classification of business communication channels giving appropriate

examples.

2. Distinguish between the following”

(a) Formal and informal channels

(b) Downward and upward channels
(c) Oral and written channels
(d) Electronic and hardcopy communication channels

3. Explain different types of oral channels of communication giving suitable examples.

4. When will you select the following communication channels:

(a) Face-to-face
(b) Broadcast media
(c) Mobile

5. What do you understand by written channel? Discuss its advantages and

disadvantages.

6. You are salesman of a company and have been deputed to negotiate price of an
instrument manufactured by the company. The buyer is insisting on a price lower
than offered by you. You want to contact marketing manager. Which communication
channel you would use to contact manager. Justify your answer.

7. You are a CEO of a multinational company which channel you would prefer to use
while addressing staff of your company around the globe. Support your answer with
reasons.