Fundamentals of Business Laws and Business Communication · Introduction to Business Communication

Meaning and Definition of Communication in Business

Updated 10 October 2026 · Fact-checked

Communication is the process of exchanging information, ideas or feelings between two or more people so that the message is understood. In business, it moves facts and instructions among employees, customers, suppliers and others to achieve goals. To solve questions, match the option to the core idea: two-way exchange and understanding.

Understand Meaning and Definition of Communication

The word communication comes from the Latin word *communis*, meaning common. To communicate is to share something in common. The idea is simple: one person sends a message and another person receives and understands it.

Sending alone is not enough. If a manager gives an instruction and the staff misunderstand it, communication has not really happened. Communication is complete only when the receiver understands the message as the sender meant it. Feedback tells the sender whether this has happened.

Business communication is the exchange of information, ideas and instructions connected with the work of a business. It takes place inside the firm (manager to staff, between departments) and outside it (with customers, suppliers, banks, government and the public).

The nature of communication is what you must know to eliminate wrong options. Communication is:

A process, not a single act. It has a sender, message, channel, receiver and feedback.
Two-way. Feedback makes it complete.
Continuous. It goes on all the time in an organisation.
Purposeful. It always aims at some result.
Universal. It is needed at every level and in every function.
Using words and non-words: speech, writing, gestures, tone, images.

The objectives of business communication include giving information, giving instructions and orders, persuading people, building relationships and goodwill, raising morale, and helping in decision making. Its importance is that it helps in planning and coordination, smooth working, quick decisions, better management-employee relations, a good public image and customer satisfaction. Without it, a business cannot function as a team.

Key formulas to remember

Basic idea of communication: Communication = Sending a message + Understanding by the receiver; Understanding is the key. A message that is sent but not understood is not complete communication.
Elements of the process: Sender → Message → Channel → Receiver → Feedback; Feedback makes communication two-way. Remember this order for MCQs.
Main objectives: Inform, instruct, persuade, build goodwill, support decisions, raise morale; Use this list to pick the correct objective in an option set.
Nature in one line: Process, two-way, continuous, purposeful, universal; An option saying communication is a one-time or one-way act is wrong.

How to solve Meaning and Definition of Communication questions

Questions on this topic test definitions, nature, objectives and importance. Use this method for any such MCQ.

1Read the question stem and find the key word: meaning, nature, objective, importance or feature.
2Recall the core idea: exchange of message and understanding between people.
3Cross out options that say communication is one-way, a single act, or only written.
4Cross out options that mention something unrelated to sharing information, such as only profit or only control.
5Check the remaining options for the word 'understanding' or 'exchange' or 'feedback'.
6For 'which is NOT' questions, find the one statement that contradicts the nature of communication.
7Choose the option that matches the exact scope asked: general communication or business communication.

Quickest way: Two-way and understanding test

When to use it: Use it for any definition or nature MCQ when you have under 40 seconds.

Ask: does this option show an exchange between two parties?
Ask: does it include understanding or feedback?
Reject any option with words like only, always one-way, or no response needed.
Pick the option that passes both tests.

Common mistakes in Meaning and Definition of Communication

Treating communication as only sending a message
Students think of announcements or notices as complete communication.
Fix: Remember that the receiver must understand the message. Feedback completes the process.
Saying communication is always written or spoken
Students link it only with letters, emails and speeches.
Fix: Include non-verbal forms such as gestures, facial expressions, tone and visuals.
Confusing objectives with importance
Both lists talk about benefits, so they look alike.
Fix: Objectives are what the sender wants to achieve, such as informing or persuading. Importance is the benefit to the business, such as coordination and goodwill.
Calling communication a one-time event
Students focus on a single message such as one email.
Fix: Communication is a continuous process in an organisation. Choose 'continuous process' in nature questions.
Limiting business communication to the inside of the firm
Students think only of manager and employee talk.
Fix: Include external parties: customers, suppliers, banks, government and the public.

Worked examples

Example 1

Which of the following best describes communication?
(a) Sending a message without caring about response
(b) Exchange of information and ideas leading to understanding
(c) Issuing orders from superior to subordinate only
(d) Writing letters to customers

Show the solution

Core idea: communication is exchange with understanding.
Option (a) ignores response and understanding, so reject it.
Option (c) is one-way only, so reject it.
Option (d) names only one written form, so it is too narrow.
Option (b) includes exchange and understanding.

Answer: (b) Exchange of information and ideas leading to understanding

Example 2

Which of the following is NOT a feature of business communication?
(a) It is a continuous process
(b) It is purposeful
(c) It is a one-time act that ends once the message is sent
(d) It involves a sender and a receiver

Show the solution

Recall the nature: process, two-way, continuous, purposeful, universal.
Option (a) matches continuous, so it is a feature.
Option (b) matches purposeful, so it is a feature.
Option (d) matches the sender and receiver in the process, so it is a feature.
Option (c) contradicts the idea of a continuous process with feedback.

Answer: (c) It is a one-time act that ends once the message is sent

Exam tips

Look for the word 'understanding' in definition options. It is usually part of the correct answer.
In 'NOT' questions, spot the option that calls communication one-way, one-time or only written.
Learn the objectives list as short keywords: inform, instruct, persuade, goodwill, decisions.
Do not spend more than 40 seconds on a definition question. There is no negative marking, so always mark an answer.

Practice questions from Introduction to Business Communication

Meaning and Definition of Communication in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Meaning and Definition of Communication: frequently asked questions

What is the meaning of business communication?

Business communication is the exchange of information, ideas and instructions related to the work of a business. It happens inside the organisation and with outside parties such as customers and suppliers. Its aim is to help the business reach its goals.

What are the main objectives of business communication?

The main objectives are to inform, to instruct, to persuade, to build goodwill and relationships, to raise morale and to support decision making. Exam options often list these in different words, so learn the idea behind each.

Why is feedback important in communication?

Feedback tells the sender whether the receiver has understood the message. It makes communication two-way and completes the process. Without feedback, the sender cannot correct misunderstandings.

Is communication only about words?

No. Communication also uses non-verbal signs such as body language, tone, facial expressions and visuals. Any option that limits communication to words alone is usually wrong.