Communication, being an integral part of every business organization, enables the exchange of information between two or more individuals, departments and organizations. Internal communication refers to the communication that occurs between members or departments within the same organization. On the other hand, external communication takes place when members or departments of an organization communicate with an outside party. Successful organizations concentrate on the effectiveness of both internal and external communication in order to maintain healthy relations with various internal and external stakeholders.

This article will define the terms internal and external communication in more detail and explain the differences between the two.

Definitions and meanings

Internal communication

In internal communication, information, messages and facts related to the business are exchanged between those who are part of the organization or between the different organizational units.

It is important to plan internal communications as it has an impact on the knowledge, behavior and attitudes of the members of the organization. Internal communication helps in establishing a relationship between the company and its employees at different levels. It encourages efficiency, innovation, dedication and faith in the company and makes employees understand the part they play in the success of the organization. This ensures that employees accomplish their jobs in the most efficient manner.

Internal communication usually takes place through different media, for example emails, memorandums, letters, video conferencing, internal web portals, circulars and conference calls. The main objective of internal communication is to ensure the normal operations of an organization, including its day to day operations as well as its long-term functions.

Internal communication mainly involves information that is transferred between managers and employees. It is usually carried out to inform employees about the organizational objectives, formulate plans to achieve these objectives and organize resources in the most optimal manner. It plays a part in the training, selection and appraisal of employees.

Internal communication can be formal or informal in nature. Formal communication refers to the communication that occurs through the official channels within the organization. On the other hand, informal communication does not pass through the specific organizational channels. Rather, it takes place through unofficial channels and is more personal in nature.

External communication

External communication refers to exchange of information between the organization and an entity or individual from outside the organization, for example the customers, clients, investors, suppliers, government bodies, society, and the general public. External communication is mostly formal and documented. In addition, it determines the way organizations relate to or disseminate information among the parties that are external to the organization.

External communication may consist of information regarding new products or initiatives undertaken by the company. External messages are normally circulated to acquire customers, establish the brand or have an impact on the way the public perceives the company. The aim of external communication is to establish a relationship with external parties so as to create a favorable reputation and public image. It is also used to establish a connection with the suppliers, vendors, investors and other parties to whom the products/services may be offered. External communication with stakeholders is also very important because their perspective about the company is mainly determined by it.

Different mediums are used by organizations for external communication, based on the type of information and its objective. They may use emails, print media, and television and radio advertisements to make the public aware of a new product or service and press releases to announce changes in management or other professional events.  Companies also provide information to the external public through their websites and social media handling.

Difference between internal communication and external communication

The key points of difference between internal communication and external communication are listed below:

1. Meaning

Internal communication is that form of communication that takes place among those who are part of an organization, such as between employees, managers and shareholders. However, external communication is carried out between the organizational members and those that belong to organization’s external environment, such as its customers, suppliers, investors, community, etc.

2. Nature

Internal communication may be carried out in a formal or informal manner. On the other hand, external communication mostly occurs in a formal manner.

3. Objective

The objective of internal communication is to transfer information between different organizational levels so as to ensure the effective functioning of the organization. In contrast, the objective of external communication is to maintain connections with the external parties and ensure that a positive image of the company is developed and maintained in the external environment.

4. Medium used

Internal communication is typically carried out using emails, memorandums, letters, video conferencing, internal websites, circulars and conference calls. On the contrary, external communication is carried out using advertisements, press releases, service calls, company websites, social media posts, etc.

5. Flow of information

In internal communication, information flows within the organization, whereas in external communication, information flows in the external business environment.

Internal communication vs external communication – tabular comparison

A comparison of internal and external communication in tabular form is given below:

Internal communication vs External communication
Communication between the members of the organization Communication between organizational members and external parties
Formal or informal Mostly formal
Transfer of information between organizational members to ensure smooth functioning Providing information to external parties to develop relationships and establish good reputation
Medium used
Emails, internal website, video conferencing, circulars, etc. Advertisements, social media posts, company website, etc.
Flow of information
Within the organization In the external business environment

Conclusion – internal communication vs external communication

Internal and external communications are both very important for organizations to ensure their effective and smooth operations. Internal communication is used to inform, direct and motivate employees in an organization to exhibit good performance. When employees are unaware of organizational objectives and aims, they will not be able to work effectively.

External communication is important for developing a favorable image of the company in the market. In addition, customers are informed about a new product launch through external communication. If organizations do not communicate externally in an effective way, people will remain unaware of its products and services.

Hence, organizations should adopt the correct communication tools to make sure that there continues to be a flow of information internally as well as externally.