As any other parameter which is required for the effective running and survival of a business group, communication also is very important for survival, growth and attaining Organization goals. For a whole team to move forward unitedly with one focus, one aim, it is important to have an effective communicator at the helm of affairs. 

Lack of communication can take each division or each team head to set and interpret company goals in a different manner and take the team through their own process instead of what the company has envisaged. For any activity undertaken by a group of people, a clear understanding of who has to do what while moving forward has to be there – each role has to be defined and communicated. When the company is on its set path everything moves smoothly but the right kind of communication becomes very important when there are challenges and the company goes through trying times. 

Communication becomes effective and efficient, only when the ideas, views, opinions are conveyed to another individual/group and the desired response is evolved. The best definition of communication is “ it is the process of transmitting and sharing ideas, facts, values, opinions etc from one person/group to another”. 

There are different  types of organizational communication – viz: 

1. Formal and informal communication: Formal communication through staff meetings, sales review meetings, formal announcements, circulars etc is the method adopted by companies to communicate regularly with staff and they ensure that there is ongoing communication between staff and the management and generally follow a hierarchical pattern. Informal communication is more unstructured and works better when the groups are smaller, and it permits a certain degree of spontaneity. It is often seen that these informal talks generally helps more in goal orientation and achievement as the members of the group often are like-minded.
2. Upward / Downward and Lateral communication: Larger organizations with several hierarchical tiers use upward, downward and lateral communication as it ensures that it encompasses all levels and tiers. Upward moves upward – from bottom to top levels in the tier and are more formal in nature. For eg: from employers to supervisors, supervisors to managers, manager to general manager and so on. The content mostly will be staff reports, appraisals, performance management etc. Downward communications moves from top to bottom ie from the MD / CEO downwards and it travels through senior executives to junior level functions and the content of these communications will mostly be about business priorities, job-related instructions, letters from CEO’s desks etc. Lateral Communication will generally be among peers and will proceed in a horizontal manner. It could be between branch heads, divisional heads etc and the content will generally be any important points worth noting or/and function sharing etc.  It is commonly said that the chain is only as strong as its weakest link and this is especially true when there is a setback in the organization. During such times, unless there is a total contribution from even the junior-most staff, the company cannot overcome the challenges and it is during these times that effective communication from management plays a significant role. An ongoing thread of communication from the management downwards to all employees about how the company is progressing, how the company will address challenges etc would be helpful for employees to fulfil their functions during good and bad times. Upward communication in an organization would be better through hierarchy, although the management should make sure that they get unfiltered information.
3. The grapevine can be termed as the single strongest and fastest form of communication which is informal and rampant. The source of such communication is often not very clear but it travels faster than any formal message and it gets power and becomes more receptive than any other form of communication. The prevalence of this type of gossip/rumours etc in any organization has to be recognized and maybe accepted too. 

For example, if the salary is delayed in an organization and the management remains quiet about it, staff and union will make their own theory and management will be in the dark about the rumours going through the grapevine. Whereas if the management had communicated to all staff members through a proper system citing valid reasons like cash flow issues in advance with a probable date of salary disbursement, they could have saved the situation. The management should also have given the freedom to the employees to approach the Finance department if they required urgent funds for personal needs to tide over till salary was disbursed. 

This is also applicable not only internally to staff members to also external stakeholders when there is going to be a delay in payments. In such cases, it is often seen that instead of informing them of the probable date of payment and some cause of delay, phone calls are not picked up, emails are not answered etc. which makes the situation beyond repair. External communication is equally important to maintain the credibility and image of the organization.