1. Basis of Decision- Making and Planning: Communication is essential for decision-making and planning. It enables the management to secure information without which it may not be possible to take any decision. The quality of managerial decisions depends upon the quality of communication. Further, the decisions and plans of the management need to be communicated to the subordinates. Without effective communication, it may not be possible to issue instructions to others. Effective communication helps in proper implementation of plans and policies of the management.
  2. Smooth and Efficient Working of an Organization: In the words of George R. Terry, “it serves as the lubricant, fostering for the smooth operations of management process.” Communication makes possible the smooth and efficient working of an enterprise. It is only through communication that the management changes and regulates the actions of the subordinates in the desired direction.
  3. Facilitates Co-ordination: Management is the art of getting things done through others and this objective of management cannot be achieved unless there is unity of purpose and harmony of effort. Communication through exchange of ideas and information helps to bring about unity of action in the pursuit of common purpose. It binds the people together and facilitates co-ordination.
  4. Increases Managerial Efficiency: Effective communication increases managerial efficiency. It is rightly said that nothing happens in management until communication takes place the efficiency of manager depends upon his ability to communicate effectively with the members of his organization. it is only through communication that management conveys its goals and desires, issues instructions and orders, allocates jobs and responsibility and evaluates performance of subordinates.
  5. Promotes Co-operation and Industrial Peace: Effective communication creates mutual understanding and trust among the members of the organization. It promotes co-operation between the employer and the employees. Without communication, there cannot be sound industrial relations and industrial peace. It is only through communication that workers can put in their grievances, problems and suggestions to the management.
  6. Helps in Establishing Effective Leadership: Communication is the basis of effective leadership. There cannot be any leadership action without the effective communication is absolutely necessary for maintaining man to man relationship in leadership. It. brings the manager (leader) and the subordinates (led) in close contact with each other and helps in establishing effective leadership.
  7. Motivation and Morale: Communication is the means by which the behaviour of the subordinates is modified and change is effected in their actions. Through communication workers are motivated to achieve the goals of the enterprise and their morale is boosted. Although motivation comes from within yet the manager can also motivate people by effective communication e.g., proper drafting of message, proper timing of communication and the way of communication, etc.
  8. Increases Managerial Capacity: Effective communication increases managerial capacity too. A manager is a human being and has limitations as to time and energy that he can devote to his activities. He has to assign duties and responsibilities to his subordinates. Through communication, a manager can effectively delegate his authority and responsibility to others and thus increases his managerial capacity.
  9. Effective Control: Managerial function of control implies the measurement of actual performance, comparing it with standards set by plans and taking corrective action on deviation, if any, to ensure attainment of enterprise objectives according to preconceived and planned acts communication acts as a tool of effective control. The plans have to be communicated to the subordinates, the actual performance has to be measured and communicated to the top management and a corrective action has to be taken or communicated so as to achieve the desired goals. All this may not be possible without an efficient system of communication.
  10. Job Satisfaction: Effective communication creates job satisfaction among employees as it increases mutual trust and confidence between management and the employees. The gap between management and the employees is reduced through the efficient means of communication and a sense of belongingness is created among employees. They work with zeal and enthusiasm.
  11. Democratic Management: Communication is also essential for democratic management. It helps to achieve worker’s participation in management by involving workers in the process of decision-making is the absence of an efficient system of communication, there cannot be any delegation and decentralization of authority.
  12. Increases Productivity and Reduces Cost: Effective communication save time and effort. It increases productivity and reduces cost. Large-scale production involves a large number of people in the organization. Without communication, it may not be possible to work together in a group and achieve the benefits of large- scale production.
  13. Public Relations: In the present business world, every business enterprise has to create and maintain a good corporate image in the society .It is only through communication that management can present a good corporate image to the outside world. Effective communication helps management in maintaining good relations with workers, customers, suppliers, shareholders, government and community at large.
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