Communication tutor2u ™ GCSE Business Studies Revision Presentations 2004

tutor2u ™ GCSE Business Studies Communication Definition:  Process by which a message or information is exchanged from a sender to a receiver Two-way communication  When feedback on message is given back from receiver to sender Communication can be… Internal: between people in the same business External: with people outside the business

tutor2u ™ GCSE Business Studies Internal Communication When communications occur between employees of a business Internal communication links together all the different activities involved in a business Ensures all employees are working towards the same goal and know exactly what they should be doing and by when Effective internal communication is therefore fundamental to the success of a business Example:  A production manager (sender) sends a message to a sales manager (receiver) asking for sales forecasts for the next 6 months so they can plan production levels. The sales manager replies (feedback) to the production manager with the appropriate figures.

tutor2u ™ GCSE Business Studies External Communication Where a business communicates with people & organisations outside of the business Closely linked with the idea of “stakeholders” – i.e. those who have an interest in the activities and results of the business Examples of external communication  Press releases  Marketing materials (e.g. adverts, brochures, direct mailings)  Published financial information (e.g. accounts)  Letters, s and telephone conversations with customers and suppliers  Reports to government and other agencies (e.g. tax returns)

tutor2u ™ GCSE Business Studies Need for Effective Communication Motivates employees – helps them feel part of business Easier to control and coordinate business activity – prevents different parts of business going in opposite directions Makes successful decision making easier – decisions are based on more complete and accurate information Better communication with customers will increase sales Improve relationships with suppliers Improves chances of obtaining finance – e.g. keeping bank up- to-date about how business is doing

tutor2u ™ GCSE Business Studies Communication and Motivation Good communication is an important part of motivating employees Several of motivational theorists recognise this:  Mayo emphasised importance of communication in meeting employees’ social needs  Maslow and Herzberg stressed importance of recognising employee’s achievements and self-esteem needs Other reasons:  Ensures that everyone is working towards same company goals  Enables employees to be involved in decision-making  Employees can offer feedback and give suggestions  People are motivated by having clear targets set for them  Recognise employee achievements

tutor2u ™ GCSE Business Studies Methods of Obtaining Feedback Face to face Telephone Meetings Video-conferencing

tutor2u ™ GCSE Business Studies Factors Determining Method of Communication Content of message (e.g. is it confidential or lengthy) Speed required Amount of feedback wanted Type of feedback required – e.g. is a decision required? Cost

tutor2u ™ GCSE Business Studies Barriers to Communication Too many intermediaries (e.g. too many layers in hierarchy through which message has to be passed) Geographical distance between a firm’s offices, production plants or outlets Communication overload – too much information can cause problems e.g. slow down decision making