Communication is neither the transmission of a message nor the message itself. It is the mutual exchange of understanding, originating with the receiver. Communication needs to be effective in business. Communication is the essence of management. The basic functions of management (Planning, Organizing,Staffing, Directing and Controlling) cannot be performed well without effective communication.

Business communication involves constant flow of information. Feedback is integral part of business communication. Organizations these days are verly large and involve large number of people. There are various levels of hierarchy in an organization. Greater the number of levels, the more difficult is the job of managing the organization. Communication here plays a very important role in process of directing and controlling the people in the oragnization.

Immediate feedback can be obtained and misunderstandings if any can be avoided. There should be effective communication between superiors and subordinated in an organization, between organization and society at large (for example between management and trade unions). It is essential for success and growth of an organization. Communication gaps should not occur in any organization.

Business Communication is goal oriented. The rules, regulations and policies of a company have to be communicated to people within and outside the organization. Business Communication is regulated by certain rules and norms. In early times,business communication was limited to paper-work, telephone calls etc. But now with advent of technology, we have cell phones, video conferencing, emails, satellite communication to support business communication. Effective business communication helps in building goodwill of an organization.

Business Communication can be of two types:
1. Oral Communication - An oral communication can be formal or informal. Generally business communication is a formal means of communication, like : meetings, interviews, group discussion, speeches etc. An example of Informalbusiness communication would be - Grapevine.
2. Written Communication - Written means of business communication includes - agenda, reports, manuals etc.