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Effective Organizational Communication: Why It Matters and Influences on Encoding and Decoding


Effective communication is vital for organisations to function and thrive. This report examines why communication is crucial in organisations and discusses four key influences on messages’ effective encoding and decoding: context, channel selection, cultural differences, and active listening. Research indicates that communication enables coordination, employee engagement, change management, productivity, innovation, and resolving issues. However, barriers can impede effective encoding and decoding. Selecting appropriate communication channels for the message and audience is critical. Cultural norms and values shape how messages are encoded and decoded. Active listening facilitates deeper understanding. Organisations must consider these influences when communicating to optimise information transfer and engagement. Fostering open, multidirectional communication underpins an organisation’s success.


Communication is the cornerstone of organisational effectiveness. It enables coordination of activities, drives employee engagement, facilitates change management, boosts productivity and innovation, and resolves problems (Madlock, 2008; Men, 2014; Zerfass et al., 2018). However, communication does not occur in a vacuum. Contextual factors shape how messages are encoded by the sender and decoded by the receiver (Barrett, 2006).

Selecting appropriate communication channels, navigating cultural differences in communication norms, and actively listening instead of just hearing messages significantly influence organizational communication’s success (Madlock, 2008; Men, 2014; Barrett, 2006). This report examines why communication matters in organisations and analyzes four key influences on messages’ effective encoding and decoding: context, channel selection, cultural variability, and active listening.

Why Communication Matters in Organisations

Communication is “the process through which organisations coordinate activities, inform, motivate, attract support, enact culture, and affect social change” (Men, 2014, p. 250). It is how employees share information, ideas, and opinions and make collective sense of their work (Madlock, 2008). Communication enables organisations to function efficiently and purposefully.

At its core, organisational communication facilitates coordination. Messages are shared up and down the hierarchy and laterally enable the alignment of activities between units, teams, and individuals (Men, 2014; Zerfass et al., 2018). Clear communication of goals, plans, policies, procedures, expectations, and feedback allows employees to work synergistically.

Effective communication also drives employee engagement. Employees who feel heard, valued, and connected to their team and the wider organisation are more motivated and committed to their work (Madlock, 2008; Men, 2014). Fostering multidirectional communication and openly exchanging ideas, views, and feedback creates a sense of involvement.

Additionally, communication is vital for leading and managing change. Organisations must communicate a vision and case for change to obtain buy-in (Barrett, 2006). Ongoing messaging explains what is changing, why, and how it will impact operations and employees. This reduces uncertainty and resistance by bringing staff on board.

Likewise, communication enhances productivity. Sharing information efficiently, resolving issues rapidly, and aligning efforts facilitate workflow (Zerfass et al., 2018). Regular team meetings to set objectives, assess progress, and solve problems to enhance output.

Moreover, open communication channels spur innovation by allowing an exchange of creative ideas and different perspectives (Madlock, 2008). Brainstorming sessions and collaborative projects harness diverse insights. A participative, inclusive communication climate signals that all contributions are valued.

Finally, healthy communication prevents and resolves issues. Employees can raise concerns when communication pathways are open and bidirectional (Barrett, 2006). Discussing problems directly and transparently resolves misunderstandings and conflicts before they escalate.

In summary, multidirectional communication that disseminates information, garners input, provides feedback and social support and clarifies expectations is the lifeblood of an organisation (Madlock, 2008; Men, 2014; Zerfass et al., 2018). Thus, organisations must actively foster effective communication.

Influences on Encoding and Decoding

However, communication does not exist in a vacuum. Contextual factors shape how effectively information is encoded by the sender and decoded by the receiver (Barrett, 2006). This section examines four key influences on encoding and decoding: situational context, channel selection, cultural variability, and active listening.


Meaning is constructed through contextual cues or “local understanding” (Barrett, 2006). The situational and social environment provides a reference frame for encoding and decoding messages. Senders choose words and signals they believe will resonate based on contextual knowledge, while receivers interpret signals against this backdrop.

For example, an email announcing bonuses during a strong organisational performance will likely be received positively, while the message sent during hardship may provoke a backlash. Messages only acquire meaning through contextualization. Thus, effective communicators consider situational factors during encoding and decoding.

Channel Selection

Communication channels differ in information capacity. The channel must align information richness requirements with message complexity (Men, 2014). Simple, unequivocal messages are best suited to lean channels like text, while complex, nuanced messages require richer channels enabling immediate feedback such as video conferencing.

Beyond information richness, channel selection depends on audience, objectives, and context. For example, email and intranet suit frequent organization-wide broadcasts, while town halls allow dialogue (Madlock, 2008). Confidential negotiations warrant private face-to-face discussion. Moreover, some cultures prefer verbal over written communication (Madlock, 2008). Selecting channels aligned with message requirements, audience preferences, and cultural norms enhances communication efficacy.

Cultural Differences

Cultural variability in communication styles, norms, and values shapes encoding and decoding (Madlock, 2008). Cultures differ on dimensions like power distance, individualism, masculinity, uncertainty avoidance, and contextualisation, which influence communication (Hofstede, 1984; Men, 2014). For instance, high power distance cultures encode messages with deference to hierarchy, while egalitarian cultures speak directly and explicit (Men, 2014).

Likewise, communication in collectivist cultures emphasizes group harmony, while individualist cultures value frankness (Hofstede, 1984). Masculine cultures use decisive, authoritative language, while feminine cultures aim to include and build consensus (Madlock, 2008). Those avoiding uncertainty prefer explicit, unambiguous messages, while others tolerate ambiguity. Finally, low-context cultures encode complete, direct meanings, while high-context cultures embed meaning in contextual cues (Men, 2014).

These cultural leanings lead to variability in encoding and decoding, requiring sensitivity. Placing communication in cultural context clarifies intent and meaning.

Active Listening

Active listening facilitates effective decoding by demonstrating interest and summarising key points to confirm understanding (Barrett, 2006). However, most only passively hear words without absorbing meaning.

Active listening involves attending, paraphrasing content and reflecting feelings (Barrett, 2006). Attending means focusing fully on the speaker through nonverbal signals like eye contact and posture. Paraphrasing at strategic points summarises main ideas to demonstrate comprehension. Reflecting feelings identifies implied emotions (“You seem frustrated. Is that right?”).

By fully concentrating, absorbing content, and testing interpretation, active listeners decode messages accurately (Barrett, 2006). Active listening signals respect, builds rapport and facilitates open dialogue.

Thus, active listening is a decoding skill organisations should cultivate, complementing encoding skills like structuring messages logically and expressing ideas precisely. Communication is a two-way process requiring joint commitment.


Communication is the lifeblood of organisations, enabling coordination, engagement, productivity and innovation. However, barriers can impede effective encoding and decoding. Context shapes message construction, meaning and interpretation. Channel selection must align information richness requirements, objectives and audience needs. Cultural variability necessitates sensitivity to communication norms and values. Active listening facilitates decoding by demonstrating comprehension. Considering these influences allows organisations to communicate effectively. Nurturing open, multidirectional communication is vital for organisational health and performance.


Barrett, D. J. (2006). Strong communication skills a must for today’s leaders. Handbook of Business Strategy, 7(1), 385-390.

Hofstede, G. (1984). Cultural dimensions in management and planning. Asia Pacific Journal of Management, 1(2), 81-99.

Madlock, P. E. (2008). The link between leadership style, communicator competence, and employee satisfaction. Journal of Business Communication, 45(1), 61-78.

Men, L. R. (2014). Strategic internal communication: Transformational leadership, communication channels, and employee satisfaction. Management Communication Quarterly, 28(2), 264-284.

Zerfass, A., Verčič, D., Verhoeven, P., Moreno, A., & Tench, R. (2018). European communication monitor 2018. Towards a new golden age for communication? Results of a survey in 48 countries. EUPRERA/EACD.


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