Exchange uses e-mail to coordinate meeting invitations. The meeting you propose in your calendar is sent as an e-mail message. Recipients are able to reply with their intentions.
When everyone — including you — correctly uses this e-mail trail, Exchange appropriately records the meeting in the invitees' calendars and tracks responses in your calendar.
This flow chart shows the steps that both you and your invitees should take to successfully create meetings.
Download this flow chart as an Adobe Reader (.pdf) file.
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