Internal Communication: Types, Examples, Importance


Internal communication is the communication within an organization or business. This communication includes formal or informal communication. Also, the different departments that transmit information to employees by different means come under internal communication.

Internal communication should be effective as it is a vital source of viewing and representing organizational issues. Effective internal business communication may increase job satisfaction level, productivity, the efficiency of employees by decreasing their turnovers, grievances, and helps in increasing profits.

Types of Internal Communication

Internal Business Communication is further categorized as Internal (Upward) Communication and Internal (Downward) Communication.

1. Internal (Upward) Communication: This type of internal communication involves the bottom to the top management approach. Here, the information flows from subordinates to managers or any person that is up in the hierarchy level. Transmitting the information from employees to top management also comes under this. In the absence of upward communication, the management work system is void as they are unable to know if there is a smooth flow of information or message throughout the organization or not.

internal upward communication

Upward Communication acts as a source of communication to internal employees for:

  • Exchange of information
  • Presenting ideas or suggestions
  • Attaining job satisfaction level
  • Communicating feedback

Most of the upward communication includes different forms, reports, written documents, templates, etc. to facilitate employees in gaining required and detailed information

For example, employees of the HR department of an organization prepare an attrition report and communicate the same to the HR Manager. The attrition report consists of information on the monthly or annual employee turnover of an organization and reasons for the same. This helps the HR Manager to understand the cause of attrition and to take corrective measures on time to reduce employee turnover.

2. Internal (Downward) Communication: In downward communication, the information flows from the top management to the employees in an organization. This information is related to passing on instructions to subordinates or employees to do their tasks. The main objective of downward communication is to transmit the relevant information and necessary instructions to employees or subordinates.internal downward communication

This communication is required for different purposes in an organization like:

  • Transferring crucial information
  • Providing instructions
  • To encourage discussion between people
  • To enhance cooperation, the morale of employees
  • To motivate staff
  • To increase productivity and to take feedback

For example, top management may instruct managers of different departments on certain new rules and regulations in the work area that need to be carried out in routine activities of different departments. Like there may be a change in the office working hours or office timings by the management and the same is communicated to employees by circular or notice or through the e-mail system.

Downward communication can be in the form of circulars or letters or memos or E-mail, etc.

Importance of Internal Business Communication

The importance of internal business communication is described as below:

1. Goal-oriented: In any organization, employees are supposed to get familiar with their goals and the strategy or activities to be done to achieve them. Internal communications facilitate keeping employees motivated and value them by defining goals clearly. Moreover, it also includes communicating or visualizing effective actions to be taken by employees to achieve those goals.

Effective internal communication keeps employees motivated for working towards achieving common goals.

2. Increases brand value and customer satisfaction: Through internal communication with frontline employees, organizations ensure to keep promises as expected by customers. This results in better customer satisfaction and thus increases brand value. Goals that are communicated and employees having up-to-date information result in brand loyalty. This ultimately enhances revenue.

3. Crisis management: Organizations can deal effectively with crisis situations in both internal and external environment by timely and careful internal communication. It helps in both short-term and long-term management of the crisis. Short-term crisis management is related to a particular incident and addressing that but long-term crisis management is more based on maintaining an organization’s reputation or brand value and to take corrective measures for non-repetition of negative situations. Internal communication facilitates this by making a balance in organizational structure, policies, etc. before a crisis situation arises.

4. Increases employee engagement: Effective internal communication gives regular feedback that creates a healthy work environment and results in a more engaged workforce. This ultimately reduces employee turnover and also attracts better talent in an organization.

To be at a competitive market place, a well-organized internal communications system is required by the organization to create an open environment and satisfied employees as it increases brand value.

5. Increases innovation: An internal communication system that is open, smooth, and effective, creates a comfort zone in employees.  When employees feel comfortable, they can use their creativity and innovative ideas up to a maximum extent to achieve common goals of the organization as dedicated resources. Also, through effective and well-managed internal communication, employees can convey their suggestions or ideas for the organization’s benefit. In the absence of effective internal communication, the potential of employees is not completely utilized.

6. Efficient team building: Open and smooth internal communication results in a well-integrated and efficient team by boosting employee morale. Once employees feel a sense of belongingness because of proper information or communication about the organization’s values and objectives, they tend to perform in a much better way. Moreover, they also feel job security and overall there is an improvement in work ethics as well.

7. Boosts transparent environment: Organizations having an effective internal communication system experience more transparency that results in increasing brand value through building trust in the brand and its product or services. Also, smooth internal communication helps in implementing different new policies easily.

8. Effective employee management: Through internal communication, the employees are well informed about their work areas and tasks to be done. It also helps in exchanging feedback among employees and their superiors. Feedback is required for any improvements or changes in the work culture of the whole organization.

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