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There are many ways of looking at communication in an organization. There is vertical communication, and there is horizontal communication. There is formal communication, and there is informal communication.
Vertical communication can be top-down or bottom-up. Top-down is communication from management to those below management. This can occur on different levels, for example, a CEO communicating with department heads, department heads communicating with supervisors, and supervisors communicating with rank-and-file employees. In an organization with a "flat" structure, the CEO might be communicating with the rank-and-file. Bottom-up communication is the means by which a lower level communicates upward, to superiors. This could be a chain-of-command process, or, again, in an organization that has few levels, it could be communication directly with the top. In an ideal world, the communication process is a two-way street, with information and ideas going up and down.
Horizontal communication is communication with equals, communication between co-workers and communication among various departments. This is an important aspect of communication, too, because information and ideas should flow freely across departments and among peers.
In an organization with a formal corporate culture, communication in any direction can be restricted by the formality of that culture, with everything being required to be documented in writing, for example, or in a repressive, formal culture, with communication going only top to bottom and seldom bottom to top. The chain of command is closely adhered to quite often. This sort of culture lends itself to the generation of many rumors, I have found, since the formality and repression tend to generate feelings of paranoia amongst employees. In a more informal corporate culture, information tends to flow more freely and less formally, with a better exchange of information and ideas in all directions. However, this informality may also lead to missed "messages," since there is less process to assure delivery.
I have focused here on internal business communication, but of course, there is external communication, as well, and the link I have provided has a good discussion of internal and external communication.
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