The importance of communication in the context of modern industrial set up is enormous. It 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.

Communication is a primary requirement for making decisions. In its absence it may not be possible for the top management to take any decision. Information must be received before any meaningful decision can be made. The big organizations are designed on the basis of specialization and division of labor. Coordination is a must for the efficient functioning of an enterprise. Coordination requires mutual understanding about the organizational goals, the mode of their achievement and the inter relationships between the work being performed by various individuals and all this can be achieved through communication only.

An efficient system of communication enables the management to mould the attitude of the subordinate. Most of the conflicts in business are not basic but are caused by misunderstood motives and ignorance of the facts. Communication is essential for quick and systematic performance of managerial functions. It is the basis of direction and leadership. It is an influencing process. By developing the skill of communication, a manger can be a real leader of his subordinates. A good system of communication brings them in close contact with each other and removes misunderstanding.

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 response to his subordinates. Through communication, a manager can effectively delegate his authority and responsibility to others and thus increases his managerial capacity.