This unit is about communication and the forms it uses in business transactions.


This is the transmission, the conveyance, sending and relaying of information from one individual to another. It also takes the sharing and exchange of ideas and facts into account.

It is of great importance to the business world since it plays a big role in making contacts and connections. Communication may also be oral or written.

Importance of communication to the business world

  • Through communication, it is possible to acquire information about the availability of goods, their prices, quantities and quality.
  • Instructions concerning delivery, means of payment, distribution of goods and those that have a scarcity of goods etc can be sent through communication.
  • Communication acts as a link between religion that have plenty or surplus goods and those that have scarcity of goods. This creates the need for both local and international trade.
  • Contacts can be made without physical movements therefore money and time is saved.
  • In a complex business world, business can take place effectively and efficiently without physical movement with a good communication system in place.
  • In case of accidents, communication made urgently may save life from death and goods from damage or thefts. NB: saving life means saving labour.
  • In business communication, facilities are used to make orders, guide lines, regulations and soon. This insures good working relationship between different parties for example employees and employers or partners in a business.
  • Written communication provides permanent records of transactions made which create a point of reference in future.
  • Written communication also facilitates evidence of agreements and contracts made between two parties.
  • Through postal facilities eg postal orders, telegrams, fax etc. Transfer of business documents is facilitated. Employment to those working in the information service is also possible eg postman.

Oral and written communication

Oral communication

This is the exchange of messages that are being recorded or written from one individual to another verbally. It can be done by television, radio, telephones, voice mails etc.

It is also a face to face communication which may not provide a record of information for reference.


  • It creates direct contact between two parties ie buyers and sellers
  • Detailed discussions about the good, their prices, terms of payments etc can be made.
  • It saves time compared to written communications. Urgent inquiries can be made and orders of goods placed there and then.
  • It helps to avoid errors which may arise out of the use of written communication eg use of telegrams which are very brief.
  • It also creates an opportunity for the recipient to ask questions for clarification.
  • It is cheap, especially for short distances.


  • There is lack of evidence of contract or agreement or of the message conveyed.
  • It may turn out to be expensive if it is used all the time for long distances eg overseas calling.
  • It is more prone to errors resulting from a misunderstanding of speakers esp. the message is misheard or misjudged.
  • It may not be taken seriously due to lack of evidence of confirmation between two parties involved.
  • In the absence of the recipient, it may be difficult because it is important/ necessary to get the personal identity of the person.

Written communication

This involves sending and receiving written information. It is done thru; post, letters, magazines, post cards, parcels, telegrams, news papers, fax and telex etc.


  • It provides a clear record of agreement between two people for future references.
  • It provides permanent evidence of contracts which can be bused to confirm agreement.
  • Written instructions and explanations make it possible to avoid errors resulting from misunderstandings and oral communication.
  • The massage can be sent and received at anytime of the day eg telex and fax
  • It is suitable for massages being sent over long distances
  • It provides detailed explanations; questions and answers can be made in trade journals.


  • Telex and fax services are very expensive.
  • The message may be too brief to provide the necessary information eg telegraphs
  • There is lack of direct contact between the parties involved which is necessary for personal identity
  • There is a great dangers of changing the message incase the message is brief say in telegrams.


  • Sending and delivery of letters
  • Delivery of letters under the recorded delivery services
  • Delivery of letters by express and special delivery
  • Delivery of documents by registered post
  • Telephone services
  • Telegrams
  • Franking machines
  • Telex services
  • Fax services
  • Radio call services
  • Provision of private post office boxes
  • The business reply post system
  • Provision of savings bank
  • Sending of money by money orders – note: under means of payment
  • Sending of money by postal orders – note: under means of payment


  • Letters

A letter is a written means of communications that makes sending of messages fast and accurate. It is the cheapest means of communication provided by the post office.

A letter can be sent by hand or through the post office system ie fixing a stamp on it. The cost of each depends on the distance involved. They can be categorized into personal and official letters. These are further divided into post cards, air mail, envelopes, letters, parcels, small books, magazines and news papers.


  • They are cheap and convenient to send and receive
  • They are permanent for future reference
  • It can be read at one’s own convenience
  • You can send out very many copies at once
  • Details can be made eg illustrations and diagramme
  • Unlike the telephones which tend to be busy and engaged, the post office boxes for letters are not.
  • It serves as evidence of a contract or an agreement.


  • It is not suitable for urgently required messages because it’s slow
  • They don’t provide immediate reply
  • Only people with post office boxes may use it satisfactorily


  • Telegrams

These are brief forms of written information sent by a method called telegram. The cost is determined by the number of words, therefore choice of words ie very important to carry the required meaning and information. A printed copy of the message is received by the address on the same day or the following day.


  • It is the best for sending urgent written information
  • It is formal compared to the telecom
  • Permanence is insured for future reference


  • It is expensive because the cost is per each word printed
  • Its information lacks privacy since it is exposed
  • There is room for misunderstanding and misconceiving the message because it is usually very brief
  • Only the literate person may benefit from the service
  • Clarification and reply takes long compared to the telephone


  • Telephone services

This is where people speak to one another through telephone receivers, the message being carried by telephone cable. It is the quickest means of oral communication for long-distance.

Some modern gadgets are installed in the receiver so that the caller can leave a massage for the one supposed to receive it. It is recorded and played when the recipient is available.

The exchange change is done through a switchboard where the operator connects the two parties. One can dial directly through what is called subscriber trunk dialing.

Here the subscribe makes a telephone call by dialing the code number followed by the telephone number of the person he wants to talk to. The exchange operator is not required to connect the two parties.

When the cost is transferred to the called person, with his or her permission it is called transferred charge call or reversed charged call.

Today in Kampala, booths are located in strategic places to serve the public. Telephone wire and smart cards are used to dial the required number and place.


  • It is fast and therefore urgency is insured
  • It is relatively cheap especially for short distances
  • Physical movements of the two parties is automatically eliminated
  • Time and transport money are saved and likely accidents during movement are eliminated
  • Clarification and emphasis can be made clearly


  • It is more expensive than letter esp. for long distances
  • There is no permanency of information for future reference of contractor or agreement
  • Graphic illustration and diagrams are impossible to make esp. of designs, models and sizes of goods
  • There is no physical contact between the two parties involved.
  • Telephone services are readily available at the disposal of a few financially able people
  • It is hard to have privacy in communication like telecom
  • Rural areas are deprived of telephone services because facilities are few dilapidated or completely missing.

Other services provided by the post office

  • Recorded delivery services

The addressor of paying a small additional fee is issued with a receipt (certificate) a copy of which must be countersigned on the parcel.

The copy of the receipt is then kept by the past office as evidence. It is a good and sure system of sending important official documents and valuable items. The method ensures the delivery of the letter or parcel to the right person.

  • Registered post

It is a method of insuring café delivery of documents and valuable items therefore on the posted changes, an additional fee is added. The letter is registered at the post office and the receipt is issued in turn.

The mail is not put in an ordinary letter box but is handed over to an official of the post office. Special envelopes are used for registered mail and the mail is either collected by or delivered to the addressee who has to sign on a form provided by the post office. In case it gets lost, compensation is made.

  • Express and special delivery

The post office operates a massager service where the letters are delivered to the addressee by the fastest means possible. An additional fee is charged for this service and it depends on the distance and weight of the parcel. The parcel is marked with the word express.

  • Business reply course

Under a license issued by relevant authorities, some organizations operate a self addressed envelope system where postage costs are made by the addressee on receipt of the envelope, the sender simply addresses the letters without affecting postage expenses. This method is operated by business organizations where the treasurer replies. Examples include; mail order shops, universities and research institutions.

  • Franking machine

Business organizations like companies which handle many letters can apply a license to use franking machines. The organization does not use stamps since the machine prints the amount of postage on the enveloped. The accumulated amount recorded by the franking machine is paid to the past office at the end of an agreed upon period.

  • Telex

This is sending of information by machines called teleprinters the information is typed at one end gets typed automatically on the machine at the receiving end irrespective of the presence of an operator or not. An experienced and post typist must be employed because charges are per minute. Big organizations like embassies to national co-operations use these machines for sending a recording message.

  • Fax services

This uses the principle of the photocopier. The information or the messages appears on the paper is automatically reproduced on paper on the receiving end. This method, unlike the telex, ensures that diagrams and illustrations are sent.

  • Telephone services
  • Subscriber truck dialing

When a subscriber has such a service, he or she has to first dial a code number and then followed by a telephone number of the person he or she wants to talk to.

Such telephone services are up to date and automatic. The caller does not need to pass through the operator but simply dials the required number. Such services are normally used for distant calls from one town to another or one country to another and special charges are made for such calls.

  • Transferred charged calls

In this service, the cost is charged to the called subscribers with his or her permission eg if Mr. Okello is ringing Mr. wamala, then Mr. wamala will be responsible for the payments so the payments will be transferred to the receiver.

  • Personal calls

Those are the calls that are made by the subscriber. A small fee is charged according to the time and does not commence until the called person is at spot

  • Radio phone

These are commonly used in certain vehicles /areas which enable calls to be received and made. The vehicles are normally fit with the necessary equipment and it is a mobile type of telephone. The post offers radio calls to one person in a given area who can speak to another in a given area using a given radio telephone.

  • Telephone answering machine

In some areas/places, equipments are available to automatically record phones in absence of a called subscriber. There is a recording device which is attached to the telephone which enables the caller to leave a message when the subscriber caller is absent or when the officers are closed.

  • Telephone directions

Those are books that assist callers to look u p telephone numbers for different people, companies or business and their addresses which make contacts easy and quicker.

Means of payment by the post office

The post office does not provide a means of payment in the real sense of the word but merely remitting money. Sending money through the post office involves going the nearest post office by the sender even when the payments are to be made.

The payee goes to the nearest post office. It cost more money to send through the post office then through the commercial banks. Though the post office provides the slowest means of payment, it has an advantage over the commercial bank in that they are located in every village. It is more convenient for an ordinary fellow who may not have an account in a commercial bank.

  • Postage stamp

They are used for sending letters. However some business men / firms accept them in order to settle small debts and they normally used for debaters living in far away villages and may find it difficult to pay by other means.

  • Registered money

Such a service is offered to person sending cash, cheques, drafts and other important documents through the post office. The post office normally supplies special envelopes a small cost. However, if one cannot afford to use it, ordinary envelopes are acceptable as long as it bears a horizontal and vertical line across, the lines should cut each other in the centre to form a cross.

When the post office receives the posted letter, a receipt is issued to the sender which can be produced at the post office in case the letter got lost due to negligence of the post office officials when claiming for compensation.

The registered letters are not delivered through the post office boxes instead a note on a given card is put into the address post box. The addressee must produce an identity card to prove that he /she is the person to receive the envelope.

NB- a fee is charged for registration and compensation up to a stated amount which can be paid by the post office if the letter is lost.



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