Each person has been shaped by his or her own experiences, ideas, etc. It is likely that the same event will be perceived and interpreted differently by each person. Imagine that the sender wishes to convey an idea to the receiver. She transmits what she is thinking or feeling via speech, written/typed word, physical contact, or whatever. The receiver now must take this message and, based on her own interpretation, form her own concept of the meaning of the message. Her interpretation may or may not match the sender's intended message.
Within an organization there is usually diversity. This diversity may be as obvious as culture or language barriers or less pronounced, as in educational background or family-makeup. These differences have helped to shape each person as an individual and are likely to affect the way the individual thinks, feels, and communicates. As each person brings their own background, experience, knowledge, expectations, etc. to the organization, the organization may benefit from these differences; it also may suffer because the individuals' communication styles may differ.
Communication between two people can be difficult enough. The more people involved, the higher the chance that something will be misinterpreted. In an organization not only are there individuals, but often there are separate departments or divisions. Each of these separate departments are trying to accomplish their own function, overcoming their own communication problems, while also trying to work in conjunction with, or towards a common goal with the rest of the organization. If the different departments don't communicate well, the whole organization suffers.
Organizational communication can be affected by all of these aspects. It can be very difficult to effectively communicate with many individuals, often within separate departments, who have different expectations of what should be communicated and the most effective way to exchange the information. This is why individuals and businesses need to try to improve communications. Effective communication skills can be an asset to an individual; and an organization with good communication will more likely retain their employees and customers.
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