Communication is the process of transmitting information and meaning. There are two major types, or levels, of communication: organizational and interpersonal. That is, communication takes place among organizations and among their departments, and communication takes place among individuals. Hierarchical structures create vertical communication. Vertical communication is the flow of information both downward and upward.

It is also called formal communication because information that flows this way is recognized as the officially sanctioned information. When top-level management creates a vision and makes decisions or creates policies and procedures, these are often communicated down the chain of command to employees. Downward communication occurs when higher-level managers tell those below them what to do and how to do it. The delegation process occurs via downward communication.

When employees send a message to their bosses, they are using upward communication. Upward communication is vital, as it gives employees participation in management decisions and improving performance. Many organizations adopt open-door policies that allows employees to go to managers.