Unit 4 Communication revision guide

1.The communication model

What is communication: Communication is the transfer of information between two parties, the sender and the receiver. It is important that feedback is given so the sender knows that the message has been received and understood. There are many ways in which businesses communicate. Each method requires a response or feedback.

Below is an example of the communication model you must memorise this. This is how the communication model works. The sender is the source or person from an organisation who sends information. The information is sent to the receiver. The sender will only know if the communication has been received and understood successfully if feedback is provided. Feedback can be given verbally or by an action or a change in behaviour. This is true in every method of communication. The sender has control over the intend effect of the message being sent and has to select the most suitable method.

How is information passed on? In business organisations business information or messages are sent through different communication mediums (the methods used to send the message or information, for example telephone, letter, e-mail, fax, advert, and media such as TV and Radio).

Evaluation point: Communication is not always successful. An important attribute to the success of a business is its communication strategy. Choosing the right method of communicating and one that suits the intended audience is important to any business organisation. The success of the communication will depend on whether the audience understands the communication received and that feedback is given.

2.The purpose of communication

Communication is about the transfer of information. Communication is what keeps business going, without communication businesses would not know what the needs of their stakeholders are, for example:

If a product or service is available

The thoughts of employees

The purpose of communication is about the transfer of information between different parties. Businesses must remember that it is important how they communicate. They should consider: the audience, communication medium used and the nature of the communication will differ in each case. Within an organisations the requirements of employees and managers, for example, may differ and the information they expect might be different. It is vital that these are considered when communicating. Should information not be passed on it can cause conflict between stakeholders (conflict – a clash between people; if employees and management disagree then it may cause conflict between two sides). An organisation can either negotiate (a process by which two or more parties engage in discussion to try and resolve dispute and arrive at an agreed course of action) with stakeholders or enter into a consultation (a process whereby one party may ask for the views and advice from other parties to help them arrive at a decision) process to reach a decision.

Exam tip: remember the difference between negotiation and consultation.

3. The Process of Consultation

The method chosen to send a message is the medium, the following are the different mediums used and the advantages and disadvantages:

Face to face/verbal/oral: meetings, one-to-one meetings and presentations

Advantages:Quick, Personal, Allows both parties to see each other body language, You can have immediate feedback on message sent, Can be used in formal situations such as presentations or informal such as a chat at lunch time

Disadvantages:Skill of the sender is important – a presentation can be let down by a poor presenter, Feedback can be misinterpreted, Receiver does not have time to reflect and consider the message, Can be influenced by emotion which can act as a barrier to understanding the message and giving the right feedback.

Electronic: e-mail, fax, video, telephone, TV, radio, podcast, the internet etc.

Advantages:Very flexible, provides lots of ways to communicating, Can save time and money, Can be a very fast way of communicating important messages

Disadvantages:Can be abused by staff which costs time and money, Can often be misinterpreted – e.g. the intension of the sender is not always clear in an e mail or text, Managing hardware and software can be very expensive and requires high level skills to do so

Visual: posters, notices, advert

Advantages:Can be very effective in catching the eye, Receiver can associate with visual images easier,receiver can often remember visual images easier to remember, They are very flexible and can be used for a variety of purposes, on websites, posters, TV, logos, leaflets.

Disadvantages:Sometimes it can limit the amount of information you can get across.Visual images can be expensive to produce, The image can be misinterpreted by different people unless supported by text.

Written: letters, memos, scribbled notes, etc.

Advantages:Provides a very formal way of communicating, There is a record of the message being sent, The receiver can take their time in reading and understanding, Can reflect on the message and then send back their response, The message can be circulated through a number of different means, post, e mail, web site, Allows complex and technical information to be communicated.

Disadvantages:Can be dependent on the quality of the language used, Assumes the reader will spend time reading it and can understand what has been written, Font size can be too small to read, Difficult for the sender to know if the message has been received

Sound

Advantages:Plays on the emotions – and can help people remember things, Lots of different ways sound can be used, Does not rely on language.

Disadvantages:Can be obscured but other noises, People interpret sound differently and old people or who are hard of hearing will not get the message, Some sounds can be very annoying (crazy frog) and message will be lost, Can be limited to only making a simple message.

You must consider the advantages and disadvantages of the different media but also to consider which one will be the most appropriate for audience, where the advantages outweigh the disadvantages. You must also be aware that some businesses will use one type of media more than others for example e-mail but a Legal firms may use written and verbal forms of communication as this maybe the best way to build relationships with their stakeholders. The success of any communication depends on whether the receiver understands and can act on the message/sender. The sender can only know if the communication has been successful if there is positive feedback. The medium of communication used can have an effect on the success of the communication.

Exam tip: when tacking a question asking you to evaluate different methods of communication consider the audience that the message is aimed at, what response the sender wants, how quickly and what would be judged a successful outcome. This way you will be able to evaluate different methods more effectively.

4. Barriers to good communication

What is a barrier to communication? This is when there is a problem that stops the receiver understanding the message sent by the sender. The main barriers to communication are:

  • Poor listening skills on the part of the receiver
  • The message has too much technical language and the receiver does not understand it
  • The wrong communication medium is used to send the message
  • Lack of trust or honesty in the sender by the receiver
  • Feedback is poor due and the sender can’t tell if they have understood the message
  • Quality of information sent was poor and hard for the receiver to understand
  • People’s emotions can get in the way of the message i.e. they could be angry
  • Cultural (the beliefs and traditions of the people of a country or religion which sometimes mean similar message/signals can be interpreted in different ways) differences, what might be acceptable in one county may not be in another
  • The amount of knowledge the sender and receiver have, if they are different this could make the message hard to understand

5. The effects of good business communication:

  • Increased sales: advertising increases brand awareness
  • Building reputation and customer loyalty, this is when customers prefer to buy from one business as opposed to any other in the same market and make that choice regularly
  • Motivation, this is the process whereby individuals are committed and want to carry out activities on a regular basis to help achieve a business’s gaols.
  • Improvements in efficiency as staff turnover (the number of staff as a proportion of all staff in an organisation that leave in a particular time period) this would fall because if staff motivation increases employees are less likely to want to leave.
  • Improving product information that providesgreater product knowledge (the ability of an employee in a business to know about the product and be able to explain its key features, benefits and limitations to a customer or other stakeholder.
  • Achieving other objectives not all businesses are interested in improving communication to increase sales and make profits. Charities, environmental groups and social enterprises (business organisations that aim to make a profit but have as their main aim social and/or environmental goals. Profits that are made may be distributed to the cause they are interested in rather than to investors.) these organisations may find they increase donations, an awareness of their social issues

6. The effects of bad business communication

  • Falling sales, if businesses don’t communicate a clear message about the quality of their products
  • Disruption of supplies, if suppliers do not receive the right message then the business may not receive the right amount of stock to meet demand from customers.
  • The environment, businesses must communicate how with their stakeholders about how they will impact upon the environment and its important that they communicate the message how they help the environment to avoid customers boycotting their business (not using them) or protestors demonstrating which will give them a negative reputation.
  • Effects on the workforce, it is important to communicate a message to the workers thorough the right medium to ensure that employees understand the message and they do not feel resentful or angry because the employees do not understand the reasons for change. If employees feel that resentful or angry their motivation will fall and this will lead to a decline in productivity and quality. Example of poor communication, the Ministry of defence making employees redundant by text.
  • Effects on productivity and efficiency
  • Bad publicity, poor communication can lead to bad publicity and damage a business’s reputation. Building customer loyalty is and expensive and time consuming process but this can be undone very quickly by bad communication which affects reputation, getting customers back can be very difficult.

7. Stakeholders: Any individual or group with an interest in a business

Internal stakeholders: Stakeholders who are directly involved in the business

Shareholders are the owners of the business they have taken part ownership in the business. They buy shares in a business for two reasons so they can sell them the shares on and make a profit or to receive a dividend payment ( a percentage of the profits paid to the shareholders in the company)

Employees are employed by the business for the contribution they make to production. They provide their labour – both physical and mental – to help the business carry out its operations. In return employees expect to receive payment. Employers will expect employees to support the business’s aims and objectives and to maintain confidentiality, loyalty and commitment.

Managers – Have the responsibility to run the day-to-day affairs of a business on behalf of the owners. They plan, organise, take decisions and control many aspects of running a business.

External Stakeholders: A business also has a number of external stakeholders

SuppliersMany businesses rely on suppliers to provide them with raw materials, equipment, components and services such as banking, legal and insurance, to carry out their operations. Suppliers expect businesses to pay them within a reasonable time period and at an appropriate price and the business expect their supplier to deliver the products on time so they have to build a positive relationship.

Local communityBusinesses can never be divorced from their local community in which they are located. Any business’s activities will have an effect on the local community. In some cases this effect on the local community. In some cases this effect can be significant, for example, the effect of a nuclear power station on the local community. Businesses provide jobs and some sponsor local courses/charities.

Customers: The customer is extremely important for a number of reasons. Customers are the market for the business. They provide the business with the source of sales. Customers may not have a lot of influence over a business and their for groups have evolved to help protect consumers, such as Which, TV programme Watch Dog and regulators such as Ofcom.

Pressure Groups: pressure groups exist to put forward views of a group of people to persuade businesses and government of the importance of the view. They hope to persuade businesses and government of the importance of their view.

Government: The government has an interest in business because businesses provide employment and pay taxes. Businesses are important in generating wealth and creating new ideas. However, governments know that businesses can have a disadvantage that can affect the public and so they pass laws to protect and set up monitoring bodies.

Method of communication with stakeholders / Explanation
Advertising and promotion / This could be through TV or radio but also via billboards, carrier bags, leaflets, and so on. When businesses have product displays that are communicating a message to their customers – ‘to buy’
Annual Reports / These are formal documents produced by public limited companies for the benefit of shareholders and prospective investors.
Letters / These may be in response to complaints or to provide information, for example about price changes or changes to terms and conditions.
Magazines / A number of companies produce magazines either for their workers or for distribution to customers.
Through the internet / This is not only through having a web site but also providing means for customers to contact the business 24 hours a day and providing information and updates quickly to customers.
E-mail / A quick and speedy way to contact stakeholders also used as a means of informing customers of delivery and tracking the progress of orders.
Design / Extremely important for many businesses. Design not only communicates the ethos and image of a business, it also says something about the functionality of the product.
Logos / As with design, having the right logo can be crucial in communicating the image and values of a business. Simple logos can help create brand loyalty.
Mission statement / Communicate what the business stands for and are a guide to all employees to help them in presenting the business to other stakeholders.
Strap lines / These are catch phrases that a business uses to help stakeholders to remember their business. For example, ‘have a break, have a ……’ ‘A…….. A day helps you work rest and play’. Do you know the missing products?
Technical design and specification / Some products communicate sophistication and high value to stakeholders possibly with the aim of persuading customers, for example, (sometimes with good reason) to pay higher prices. BMW, Mercedes, Lexus, Bang and Olufsen and Bose are examples of brands that pride themselves on technical design and specification and wants

8. Methods of communication with stakeholders

Electronic MediaElectronic means of communication have become ever more important in business. They include a wide range of different methods including e-mail, fax, the telephone, video, podcasts, teleconferencing and webcasts and webinars. The advantage of many electronic methods is that they are quick and can enable the sender to get feedback almost immediately. Electronic communication also means that individuals are not tied to being a particular area or place. Providing they can access the media, communication can be made hours a day, 365 days a year. Electronic communication is also valuable for businesses that operate globally. Such methods can put people who live thousands of miles apart in touch with each other and help to oThe development of the internet has enabled new types of communication to be created. Webcasts allow files to be transferred over the internet. The result is that businesses can use this technology to broadcast messages and information to their stakeholders either live or recorded. The advantages is that a business can contact large numbers of stakeholders either liver or recorded. The advantage is that a business can contact large numbers of stakeholders distrusted anywhere around the world easily. Users can access the webcasts at any time using their computers. It is possible for a business to use a webcast to report its financial performance to shareholders and employees in different countries can be given information about major events, such as proposed mergers or takeovers or important decisions affecting the business. Overcome some of the problems caused by different time zones.