Importance of communication in management are: (1) basis of co-ordination (2) smooth working of an enterprise (3) basis of decision-making (4) enhances managerial efficiency (5) promotion of co-operation and industrial peace (6) establishment of effective leadership and (7) morale-building and motivation.

Now-a-days communication is considered to be an important human skill. The ability to communicate effectively has become one of the major skills of a successful manager. An organisation without the network of communication is inadequate and incomplete.

The communication can be regarded as the motivating force leading to industrial harmony and can be a device for controlling and taking corrective action to ensure the accomplishment of the desired goals. Bernard has called it the foundation of all group activities. In the words of George R. Terry. “It (communication) serves as the lubricant fostering for the smooth operations of the management process ”

The Importance of Communication in Management can be judged From the Following:

(1) Basis of Co-Ordination:


The importance of communication in the context of modern industrial set up is enormous. The big organisations are designed on the basis of specialisation and division of labour. The work of the organisation can be carried out without interruption only through co-ordination.

Co-ordination is a must for the efficient functioning of an enterprise. Co-ordination requires mutual understanding about the organisational goals, the mode of their achievement and the inter relationships between the work being performed by various individuals and all this can be achieved through communication only.

(2) Smooth Working of An Enterprise:

Communication makes possible the smooth and unrestricted running of the enterprise. All the organisational interactions depend upon communication. If the persons engaged in performing the various tasks understand it exactly in the same sense in which they are required to perform, it can help in smooth running of an enterprise.

It is only the process of communication which makes co-operative action possible. What objectives are desired, what activities are required, how they will be done, who will do what and when, how people will react to this, all depends upon the process of communication.


In the words of Herbert G. Hicks, “Communication is basic to an organisation’s existence—from birth of the organisation on through its continuing life. When communication stops, organised activity ceases to exist.

(3) Basis of Decision-Making:

Communication is the basic requirement for making decisions. In its absence it may not be possible for the top management to take any decision. Information must be received before any meaningful decision can be made. Again to implement the decision effectively it becomes necessary to have a good communication system.

Without effective communication it may not be possible to issue instructions and taking effective steps to appraise the performance achieved. Chester I. Barnard says that first executive function is to develop and maintain a system of communication.

(4) Enhances Managerial Efficiency:

Communication is essential for quick and systematic performance of managerial functions. The management conveys through communication only the goals and targets, issues, instructions, allocate jobs and responsibility and looks after the performance of subordinates. In the modem days, the skill of communication has become an essential component of successful management.


(5) Promotion of Co-Operation and Industrial Peace:

Better and economical production is the aim of prudent management. It can be possible only when there is industrial harmony between management and workers. The two way communication promotes co-operation and mutual understanding between the parties.

The downward communication helps the management to tell the subordinates what management actually expects of them. The upward communi­cation helps the workers in putting up their grievances, suggestions and reactions before management which ultimately helps in achieving co-operation of employees.

(6) Establishment of Effective Leadership:

Communication is the basis of direction and leadership. It is an influencing process. By developing the skill of communication, a manager can be a real leader of his subordinates. A good system of communication brings them in close contact with each other and removes misunderstanding of all types between the leader and his subordinates.

(7) Morale-Building and Motivation:


An efficient system of communication enables the management to mould the attitude of the subordinates. Most of the conflicts in business are not basic but are caused by misunderstood motives and ignorance of the facts. Proper and timely communication between the interested parties reduces the friction and minimises that which may arise invariably. Communication improves the human relations in the industry.