Diplomacy as the political process by which political entities, generally states, conduct official relations with one another within the international environment, performs distinct functions in foreign policy that makes it indispensable to international society. As an institution, diplomacy has proved greatly adaptable to changes in the international system, as shown in the development from classical to new diplomacy. Thus, faced with the challenges posed by the current international environment, the issue instead should be how diplomacy must change to make itself relevant to it. .
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A fundamental function of diplomacy is to facilitate communication and negotiation between states and leaders, where the latter is the process when two or more parties talk to with each other, either directly or through an intermediatary. In peacetime, this serves to promote friendly relations between sending states and receiving states, helping to develop their economic, cultural and scientific relations. In war, diplomacy also has a vital role of ensuring successful negotiations of peace treaties and ceasefire agreements. This process is also critical in building coalitions in support of the balance of power. .
Another function is that of intelligence gathering, where ambassadors collect information about the host state, its conditions, developments and policies, and report them directly to the home government. This is important in providing the home government with information and advice for the formulation of policies towards that host country. This has become increasingly complicated with the expansion of the scope of foreign policy making and globalization. Now, the need is to gather a variety of information, including from economic and cultural sources and rather than just political ones. .
An obvious purpose for diplomacy is the representation of the sending state in the receiving state.