Communication is an exchange of facts, ideas and opinions by two or more persons. The exchange is successful only when actual understanding results. Merely saying is not enough; a receiver of information must understand the message which the sender is trying to communicate. Communication occurs when the former understands what the latter means to convey.

Communication involves linking all the management functions to transmitting information and instructions within the organization. Additionally, the communication process relates the organization to its environment by linking it to suppliers of resources, and to the consumers for whom its products are intended.

In any organization, the specialization of tasks and the consequent division of labour creates a situation in which an unrestricted flow of ideas and facts is necessary if it is to function efficiently. A high degree of communication binds the various members of the organization together, uniting them in the pursuit of organizational goals. Hence, an organization may be viewed not only as a decision-making system, but also as a communication system.

The major components in the communication system are the sender, the message and the receiver. The sender may be an individual or a computer or other device which is capable of sending a message. The message is the information transmitted to the receiver. The medium used for transmitting a message may be written, oral, visual or other forms of communicating meaning. A red light on operating equipment, for example, is often used to indicate a breakdown or a danger. From a management viewpoint, written communication has special advantages in that information may be planned and incorporated into formal procedures, forms, reports, etc., by which means communication is affected. Essentially, procedures which are designed to communicate information should focus on what is important, so as to maximize the possibility of effective communication occurring. This requires a limitation on the number of messages communicated so that the really important information is perceived. The principle of communicating only 'exceptional' information, that is, information about a variance from a predetermined plan which requires immediate attention is a feature of successful communication systems. Moreover, the frequency of communication should be considered in the light of the needs of the receiver, having regard to the effective action which may result from the communication.

Occasionally, the context or situation surrounding communication may affect its transmission or reception. This occurs when interference, such as static on a radio message, prevents the message from being transmitted or distorts the manner in which it is received. The 'gap'/'noise' is the result of factors causing distortions or loss of meaning, and one of the tasks of the designers of information systems is to minimize 'noise' and prevent 'noise' from being accepted as true information.

Lastly, the receiver must recognize the context in which the message is sent and received in order that he may interpret the message correctly. The last stage in the communication process involves a human factor, in that the reception of information should produce the correct response. Behavioural factors which impede the required response may render the entire process of communication futile.

Environmental and analytical information is combined in the plans which are designed to meet the organization's objectives. These plans are implemented as resources become inputs which are converted into products and services. The feedback and control systems should function so as to ensure the effectiveness of the plans.

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Read on: Control

In their discussion of 'control', some writers make no distinction between 'planning' and 'control', thereby giving a much wider meaning to their concept of control. We shall discuss the extended meaning of 'control'. For the purpose of our own analysis of the management process, we propose to make a distinction between 'planning' and 'control'. This distinction enables us to examine the management process as a cycle of activities.

The decisions involved in this area stem from two main activities, first, comparing actual performance against that stipulated in the plan, and, second, determining... see: Control