The destination of communication is either internal or external. The ratio between internal and external communication varies from organization to organization. As the size of the organization increase, the amount of internal communication tends to increase at a faster rate than the amount of external communication.

Each of the communication mediums discussed earlier in the downward, upward, and lateral communication sections is also classified as an internal medium. Interoffice memos, reports, and conferences are the most commonly used internal mediums within the modern organization.

Effective internal communication—downward, upward, and horizontal—helps increase job satisfaction, safety, productivity, and profits and decreases absenteeism, grievances, and turnover.

Because most modern organizations have close ties with various publics – in fact they often depend on these publics for economic survival - external communication plays a significant role in their operations. Examples of publics that organizations communicate with are consumers, stockholders, governmental agencies, foreign suppliers, wholesalers, and retailers.

Types of media used to communicate externally are: letters, reports, stockholder reports, proposals, stockholder meetings, telephone conversations, and conferences.

While informal reports tend to be used commonly within the organizations, formal reports are more commonly use externally. Employees in many organizations are now finding that their responsibility for report preparation is increasing.

Organizations that have stockholders hold annual stockholder meetings to conduct official business— such as electing individuals to the board of directors—as well as to present information of interest to the stockholders. These meetings, although comprised mostly of oral communication, also use some written communication.

A certain number of employees in most organizations spend part of their time engaged in face-to-face conferences with individuals outside the organization. Included among these individuals are purchasing agents, sales representatives, upper-level managers, and department managers. Considerable good will can be lost easily—which may be very costly to the organization and to the outsider—unless both parties treat each other with courtesy and respect.

Specific communication skills that a person may require in any organization will vary from job to job. The possession of a certain degree of communication skills will, however, pay rich dividends throughout one’s career. Not only will it lead to a more satisfying employment experience, but also increase the chances of promotions throughout one’s working life.

The following list identifies a number of communication and related skills that will greatly benefit the employees of an organization:

1. Conflict resolution
   • Conflict is a normal part of doing business because organizational members have different and often opposing goals. However, these differing goals keep the organization vital by stimulating creativity, promoting innovation, and bringing about change. Organizations totally devoid of conflict would become apathetic, stagnant, and unresponsive to change.
   • Conflict resolution is a process whereby individuals resolve issues in an informal or formal atmosphere, or where issues are resolved as part of the ongoing interaction between individuals.
   • Effective resolutions of conflict, which involves good communication, result in fewer formal grievances, improved morale, and more effective use of human resources.
   • Conflicts are inevitable; however anger, grudges, hurt and blame do not have to be. While unmanaged conflicts, disagreements and out-of-control emotions can harm important work and professional relationships, effectively managed conflict can actually promote cooperation and build stronger relationships. Most conflicts can be resolved fairly and in a way that actually benefits all concerned.
   • An effective conflict resolution process leads to unity by addressing concerns or issues rather than suppressing them; can get people talking to each other (instead of about each other); and enable people to be part of a team that cares. This process promotes compromise or collaboration as people learn how to work harmoniously, develop creative solutions to problems and reach outcomes that mutually benefit those involved.
2. Motivation
   • Motivation is the process of satisfying internal needs through actions and behaviors. Motivation is not something a person is born with or without, but rather is something that can be enhanced or developed.
   • Motivation affects individuals differently, so one must understand the process, theories, and fundamental components of motivation in order to motivate effectively. To understand motivation, it is also necessary to recognize differences among people and be cautious not to assume they share similar preferences.
   • Motivation comes from within, from a person's own psyche, secret desires and deep-rooted needs which motivate us towards their satisfaction.
   • To increase organizational productivity and employee performance, there are several motivational techniques that one needs to learn & use. And communication is the needed tool.
3. Problem solving
   • In a business set up you need to work with other employees as well as get people working together in a friendly smooth environment. Coming from different backgrounds, having different experiences, beliefs, and expectations it is not always easily achieved. People working together are bound to develop differences & have problems working together.
   • An objective and practical way out to such a situation is to identify the real problem and find an amicable way to correct it. Unfortunately, as is the case for most of the work we do, it can be very difficult to establish criteria that aren't subjective. But if one can reach a consensus on the perceived problem and establish how to measure the results of the steps one takes to address the problem, then there is a sound basis for solving the problem. Regular communication, active feedback, and carefully monitoring of the results are all what constitutes creating such a consensus.
4. Public relations
   • Good public relations help an organization and its employees adapt mutually to each other. Often, it is termed as an indicator of an organization's performance and a program of activities.
   • The public relations function takes many forms in different organizations, including public information, investor relations, public affairs, corporate communications, employee relations, marketing or product publicity, and consumer service or customer relations.

Basic to all public relations, however, is communicating. Well-planned, effectively handled communications are increasingly seen as essential to the success and even existence of organizations in today's changing world. Every organization - government, business, labor, professional, trade, health, cultural, financial, recreational, educational and public service - depends on people. Their attitudes, attention, understanding, and motivation can be critical to the success or failure of an organization or idea.

Effective communication benefits the organization by:

1. Creating positive image,
2. Reducing cost,
3. Improving employee moral, and
4. Increasing employee productivity.

In many instances, putting a little more effort into the communication process provides rich dividends for the organization.

Positive Image

The image outsiders have of many organizations is negative because of ineffective communication by employees. In some cases, employees knowingly use ineffective communication, but in other cases they do not realize that what they say or write produces damaging results. Employees, when using either a written or oral communication medium, have an almost infinite number of opportunities for spoiling the organizational image. The damaging situations can range from failing to answer a question to an outsider or communicating totally incorrect information.

Effective communicators are concerned about the impact of what they say or write to the listener or reader. In many cases, the implication of what was said – rather than what was actually said – produces damaging results. (e.g. "I have not received your cheque" vs. "your cheque is not received by me. It is with someone else in the office.")

An unfortunate situation arises when the listener or reader receives a totally incorrect perception of what the speaker/writer intended.

Cost Reduction

Effective communication skills make a significant contribution to organizational cost reduction. To illustrate, consider the cost of preparing a typical business letter. Supposing it is rupees 50. If an employee prepares a letter that is not effective – one that results in the need for additional correspondence – the organization’s profitability is reduced.

Let’s take another example. Consider an organization with 10,000 employees. If each employee on the average wastes 10% of his/her daily working hours in inefficient communication, and if that 10% is equivalent to 100 rupees, then the total amount lost would be of around one million rupees per annum.

Employees Morale

In many instances, managers unknowingly contribute to employee morale problems because they fail to communicate effectively with their subordinates. Managers frequently underestimate the amount of communication employee’s desire from them. As a result, information that employees would find useful simply does not get communicated. This lack of communication, in turn, creates an impression among the employees that their managers are not concerned about them or the positions they hold. When this impression is created, employee morale deteriorates.

Essential for Employee Productivity

Many organizations are presently concerned about their inability to improve their productivity, a necessity for their economic well-being. A variety of factors can be identified that negatively affect organizational productivity, including ineffective communication.

In some organizations, employees are not as productive as they might be because management fails to communicate its expectations to them. Some employees have difficulty improving their productivity when they have not been made aware of what management expects of them or when they have not been fully informed how certain job tasks are to be performed. Management’s failure to communicate its goals and objectives to employees is another factor that may contribute to decrease productivity.

The imprecise way people use the word “communication” has given rise to many misconceptions, which are: