In a business context, all communication can be divided into two categories namely, External Communication and Internal Communication.
An organization, when it communicates with Governmental agencies, oth organizations, customers, clients and Public it is called external communication The media employed may be written media like letters, reports, proposals or visual media like posters, advertisements video tapes or electronic media like faxes, telegrams, e-mails, telexes. External communication helps an organization to keep its outsourcing agencies like distributors, wholesalers, retailers and clientele well informed about the company’s products, services, progress and goals.
Every organization has the necessity to maintain appropriate communication with its branches, staff and employees. In the new millennium, particularly in the context of globalization, business has become highly competitive. Downward communication means the flow of communication from the top echelon (level or rank) of an organisation to the lower levels of employees. Communication maintained from lower level of employees to higher-ups is called upward communication.
Every business organization adopts some formal channels of communication which may be upward, downward, or horizontal or all the three. Large organizations, where there are a large number of people working closely, generate certain informal or unofficial channels of communication.
In yet another situation, one person communicates to a few chosen associates who in turn communicate the same to yet another group.
Grapevine, is definitely dangerous to the health of an organization if allowed to grow without monitoring.
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Formal communication is the process of sharing official information with others who need to know it. Internal communication is when people within a business or organization communicate with each other. In external communication, people in the business have to communicate with people or other organizations outside the business. Before I talk about the vertical and horizontal channels of communication, I need to tell you a little bit about the structure of an organization which is know as the hierarchy. The communication might also be through teleconferences, face-to-face meetings, panel discussions or presentations, exhibitions and such events. Upward communication gives scope for the employees to offer their suggestions, opinions, make complaints and seek redressal of their grievances. They are usually in the form of notices, announcements, reports, official or demi-official letters, advertisements, etc. A transparent administration policy, employee-friendly attitude, fruitful peer group meetings, inter-action sessions, parties and outings where all those connected with the organisation participate are some of the strategies to monitor grapevine and use it to the advantage of the organization.

The courses include presentation skills, written communications and reports, how to provide feedback and how to run meetings.
All organizations have to maintain cordial relationships with government agencies, licensing authorities, suppliers of raw materials, ancillary industries and financial institutions.
Internal communication is an essential feature of an organization’s administrative structure.
The central organization or corporate office should keep its branches well informed of new policies and policy changes.
Downward communication has its own shortcomings, if it is not complemented by other directional communications. Upward communication helps an organization to receive and reset its objectives at realistic levels. Sales department, production department, quality control department and the stores department have to constantly interact and coordinate among themselves. It gives mental satisfaction to the participants and gradually reduces emotional outbursts and reactions. Business houses and industries adopt one or several of these strategies to keep grapevine under reasonable control so that it does not degenerate into a rumour mill and promote unwanted gossip sessions among the employees.
The transfer of information is usually through letters, emails, face-to-face discussions, skype and etc. More information is on the intranet, which can only be accessed by staff and members.Internal communication is important because it provides interaction between the members of the same business.
Chain of command is the continuous line of authority, extends to the highest levels in an organization to the lowest levels and clarifies who reports to whom.
Continual and updated information without any communication gap is essential for business houses. In modern times, the Human Resource Department plays an important role in maintaining internal communication. The growth in business, the future projections for business, increased specializations make a great demand on the central office to maintain an uninterrupted flow of internal communication. The shortcomings will be pronounced if an organization adopts only unidirectional communication namely downward communication.
Horizontal communication leads to a better understanding among individuals and departments, cooperation and coordination. It promotes understanding, motivates employees and gives a sense of belonging and involvement to all people at all levels. In some other situation, an individual passes an information without any restriction to all those with whom he comes into contact. This type of communication helps superiors tell their subordinates what they need to do in order to make the business successful. Employees need to be motivated and exposed to the business objectives and ethical ideas of a company so that they get an involvement in the work they do. Business and industry continued the age old tradition of the feudal system even after the industrial revolution.

But such communication should not be allowed to degenerate to a meaningless criss-cross communication which will lead to chaos and confusion. Grapevine communication is an informal, unofficial, horizontal channel of communication because generally peer groups participate in it. That means that Mr A in charge of them and has supervision over them.Now, let's move on to vertical and horizontal communication. Employees on production line should be aware of the targets so that they overcome obstacles.
But soon areas of conflict got promoted by sectarian interests (of homogenous groups) within an organization. Moreover, it may get delayed or distorted as it goes down through the various levels of the hierarchical set up as all decisions are taken without any proper feedback. But on the whole, modern management recognises the need for healthy upward communication to make the organization responsive to suggestions and ideas. Vertical communication is the communication between different levels of the organizational structure. Even the shifting of the canteen and a re-adjustment of the lunch-breaks and tea-breaks have to be informed well in advance to the employees.
But it helps in creating an awareness among employees of the objectives, targets and goals. In turn, employees should be able to tell people at higher levels their grievances, expectations and difficulties. It has been discovered that a multidirectional communication system demolishes the barriers and removes friction. Effective internal communication forges a strong bond between the employees and management, promotes co-operation among different sections in an establishment. Business depends on such anew communication paradigm (pattern or model) to ensure the success of business and the realization of even difficult objectives. At ordinary times, they exist for their own sake without any objective, as a formality and routine.
Grapevine is definitely not a reliable source of information ,since it's unofficial, people can make up their own stories. For example Mr B, C and D communicating with each other would be considered "horizontal communication". It remove’s misunderstanding and aids the growth of the organization at a desirable and optimum level. Internal communication in short, ensures involvement of all the people without alienating any section. C and D arrange a meeting to talk about what they are going to do in their next project, as mentioned before, this would horizontal.

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