Effective communication has always been essential for success in business. In recent times, communication has become all the more essential due to the following reasons:
1. Increase in size 
         Business firms have grown tremendously in scale of operations. A large business firm today employs thousands of people and has factories or offices in different parts of the world. The head office of the company must always be in close touch branch offices. An efficient system of communication is required for this purpose.

 

2. Growing specialisation
         Narrow division of work results in different activities being handled by different departments. Sound communication is essential for ensuring mutual            co-operation and understanding between different departments. Otherwise the organisation cannot function smoothly.
3. Technological advancements
         Rapid changes in science and technology lead to obsolescence of technology and knowledge. In order to upgrade or modernise technology, management must persuade employees to accept new technology, Regular training of staff becomes necessary to update their knowledge.
4. Cut-throat competition
Liberalisation and globalisation have resulted in severe competition between public sector, private sector and foreign banks. Moreover, banks today have also to complete with various financial institutions. Persuasive communication in the form of advertisements, personal contacts and publicity becomes essential to survive in the race of competition.
5. Trade union movement
         In banking sector, employee unions are very strong and powerful. Management must consult union leaders on several matters, Regular exchange of information and ideas between managers and union officials helps to maintain healthy relations between them.
6. Human relations
         Effective communication between management and employees is necessary to develop mutual trust and confidence.
7. Public relations
Business has to keep Government, distributors, suppliers, investors and other sections of society well-informed about its contributions to society. Public relations help business to improve its image in society and big enterprises employ professional experts for this purpose.
8. Personal asset
Communication skill is essential for success in every job. Managers are required to deliver speeches, write documents and conduct interviews. Teachers, advocates, journalists, receptionists need high degree of communication skill. The ability to communicate effectively is equally essential for promotion in career.