What Are The 4 Types Of Business – Everyone has heard the phrase “communication is key,” and it rings especially true in business. Whether you’re a manager communicating internal goals to your team or a virtual receptionist serving customers, clear and productive business communication can make or break a company’s success.
Effective communication is essential to business, but the trick is to make sure your team is communicating successfully at all times. We understand it’s no easy task, but we’ve been named the top business client/customer communication service specialists in the US, so we break down the different types of business communication to help your company communicate -communicate more effectively.
What Are The 4 Types Of Business
We will teach you the four types of business communication and their strengths and weaknesses so that your team can better adapt their communication to each situation.
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Business communication involves the exchange of information within organizational members and from the organization to external parties. The four main types include upward communication, downward communication, lateral communication, and external communication.
The types of upward, downward, and lateral communication refer to internal business communication or information exchanged within the organization. It differs from external business communication, which refers to the interactions that take place between the organization and the external party.
We outline the strengths and weaknesses of each type of business communication and tips for successful communication in each scenario.
As the name suggests, upward communication deals with any interaction that moves up your business hierarchy. The most common example is when a direct report interacts with a supervisor or manager. Another example is when a manager interacts with high-level directors or executives.
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This type of business communication allows senior management to be informed of what is happening in the company. It also gives employees an opportunity to ask questions, express concerns, or make suggestions.
Downward communication refers to the exchange of information from the top of the organization to the lower levels of the organizational hierarchy. Although the direction is opposite to upward communication, these two types often work together.
Examples of downward communication include when a manager delivers instructions to a direct report in an email or an executive communicates business goals to a manager. This type of communication allows management to disseminate information, assign responsibilities, and enforce standards.
When employees communicate between departments or with colleagues of the same rank in the organization, this is considered lateral or horizontal communication. Examples of lateral communication include a colleague calling another colleague or a group of managers discussing a potential new hire.
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The purpose of lateral communication is to promote cooperation and coordination in an organization. Without productive lateral communication, an organization may fail to achieve its business goals.
External communication deals with the exchange of information from the organization to parties outside the organization. For example, a team in your company may send a proposal for an information campaign to a client, or your organization may issue a press release to promote a new product or service.
It also includes any electronic communication that takes place via website, email or social media from your organization to users, customers or other parties. Your organization’s external communication should be a top priority because it governs your business’s reputation and external relationships.
Now that you know the different types of business communication, it’s helpful to recognize the common communication channels that businesses use. There are three main forms of communication in the workplace: face-to-face, electronic and written communication.
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This method of simultaneous communication occurs when two or more people communicate while they can see each other’s faces. Traditionally, it refers to a face-to-face interaction where both parties share a physical space (eg a face-to-face meeting). However, with the rise of the virtual workplace, it can also refer to face-to-face online interaction (eg video conferencing).
Any form of communication exchanged using electronic media (eg telephone or computer) is categorized as electronic communication. Electronic communication can occur in real time or asynchronously.
Common examples of electronic business communication include email, live chat on websites, Facebook chat or other social media messaging, and communication on project management platforms.
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Information exchanged in a way using only written words is classified as written communication. This channel is widely used in business and comes in the form of reports, memos, contracts, proposals, manuals, standard operating procedures (SOP), and press releases.
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Emails, websites, and blog posts are also considered electronic forms of written communication based on their one method.
There is some overlap between these channels and it is important to recognize that some forms of communication do not fit neatly into one category. For example, email is a form of electronic and written communication. You can use these categories as guides to inform your communication in the workplace.
Furthermore, communication can vary across channels based on various factors such as formality, whether it is verbal or non-verbal, whether it is synchronous or asynchronous. These factors can affect business interactions, so it’s important to be aware of them and adapt as needed.
Engaging in effective business communication helps your organization succeed and thrive. We outline some of the key benefits of practicing good business communication inside and outside your organization.
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Having open and accessible internal communication helps foster a positive culture within your company. Downward communication from management influences how involved employees are and helps maintain morale, while open upward communication helps employees feel heard.
In addition, collaborative lateral communication reduces competition between departments and promotes team cohesion. It is also helpful when it comes to problem solving and conflict reduction.
It is said that change only happens through communication and companies can move towards change by encouraging team interactions. Lateral communication, in the form of brainstorming sessions and meetings, encourages teammates to exchange ideas and get their creative juices flowing.
Open upward communication also helps employees share ideas with superiors and take risks to change within the company, while downward communication conveys what management’s goals are for change. Both lateral and upward communication also promote knowledge sharing, and outward communication is used to share innovative ideas with the public.
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Another benefit of using good business communication is that it can improve your business operations. Effective downward communication is essential to communicate company goals to employees and help your organization achieve greater success.
Business communication also contributes to employee efficiency and productivity. A report found that 60% of business professionals face a communication crisis every month. Upward communication helps employees when they need guidance, and lateral communication encourages synergy and collaboration so teams can solve problems and achieve more together.
Finally, external communication helps develop good working relationships with other organizations so that your company’s work flow is not interrupted by others.
Internal communication is also a tool to keep employees satisfied, fulfilled at work and less likely to leave their jobs. One study found that employee satisfaction with internal communication predicted better employee engagement and increased employer attractiveness.
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Maintaining open channels of communication between employees and management is essential for cultivating good working relationships and helps managers monitor how workers are feeling.
Specifically, accessible upward communication allows employees to provide feedback on pain points in their workflow or employee experience. Based on each feedback, management can improve processes and increase employee retention.
External communication is essential to creating an engaging and valuable customer experience. When businesses respond, they get more customers and get customers.
Providing helpful and informative customer service through chat services such as Live Chat is essential to increasing customer satisfaction. It also helps with problem solving and customer retention, as your external communication can help sort out any issues customers may have.
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Every type of business communication is important to your company’s success and growth. Take the time to understand the nuances of upward, downward, lateral, and external communication so your organization can better adapt to each situation.
Use our success tips to help your team navigate any interaction, whether internal or external, and remember to use important resources, such as when it comes to business communication.
Maddie Martin is vice president of marketing. Over the past 15 years, Maddie has built her expertise and reputation in small business communications, lead conversion, email marketing, partnerships and SEO. Does the thought of incorporating or deciding on a business structure seem daunting and perhaps a little unnecessary for your small business?
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Please note that (as with anything you read online) this is general business advice and should not replace the advice of an attorney, accountant or tax advisor familiar with your particular situation. Additionally, this information is directed to US companies.
Before we continue, let’s take a moment to define the different types of business structures. Each legal structure has different rules to follow, levels of liability protection and tax requirements.
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