Effective Business Communication: Methods and Barriers

1. Chapter Seven - Communications Unit 3 Part of your ABQ and Q4 Ms. Marshall

2. Outcomes • By the end of this chapter you will be able to: • 1. Explain the central role of communications in business and management; • 2. Identify and explain the main barriers to effective communications; • 3. Demonstrate business data in the following written forms: memos, reports, and business letters; draft a visual presentation from given data; • 4. Identify the duties of a chairperson and secretary and draft an agenda and minutes of a meeting; • 5. Distinguish between the methods of communication; • 6Discuss the importance of general communication skills (HL); Ms. Marshall

3. Principles of Good Communication What is Communication? Methods: Internal/External Importance of Good Communication ICT Choosing a Method of Communication Meetings Written, Verbal, Visual Data Protection Act 1988/2003 Barriers to communication Ms. Marshall

4. What is Communication? • Communication is concerned with the transferring of ideas, information, messages, etc. from a sender to a receiver, with the aim that the message is understood. • Formal Communication means it takes place through the approved channels of communication, e.g. written letter, formal meeting. • Informal Communication, refers to general informal networking within an organisation, e.g. chatting, gossiping. Ms. Marshall

5. What is Communication? • Basic Elements of Communication: Ms. Marshall

6. Principles of Good Communication • Ability to speak clearly • Ability to listen carefully • Ability to give and receive feedback • Ability to write clearly and concisely • Ability to read and understand communications • Ability to select the best medium for the communication • Ability to use ICT effectively You could be asked to discuss these in relation to internal/external communications P102/103 Ms. Marshall

7. Importance of Good Communication • Importance of good communication between levels in an organisation • • Offers the solution to conflict and misunderstanding in an organisation • • Improves staff morale • • Good industrial relations • • Effective decision-making • • Feedback Ms. Marshall

8. Methods: Internal/External • Communication can be between the internal stakeholders of a company: • E.g. employees and managers at a meeting. Managers giving instructions to subordinates. Entrepreneurs or managers providing the shareholders with accurate information on the company performance. • Communication can be between the external stakeholders of a company: • The business informing customers through advertising, a manager ordering goods from a supplier, the business applying for a grant from government. Ms. Marshall

9. Methods: Internal/External • Therefore internal communications are used to communicate between staff in the same business. • External communications are used to communicate with people outside the business, such as customers, suppliers, investors, the government and the general public. Ms. Marshall

10. Methods: Internal/External • Internal communication can flow upward, downward or horizontally. • 1.Upward Communications • Upward communications allow complaints, difficulties or suggestions to be reported up the line to the superior by the subordinate. The messages may be either written or oral and move in both up and down directions between manager and worker. • 2. Downward Communications • Occur when instructions, orders, directions, etc. are transmitted from a superior to a subordinate e.g. Manager to employee. • Usually designed to help the individual understand the task to be performed and avoid mistakes e.g. issuing detailed instructions on how to perform a particular job. One-way communication, no feedback from the receivers, no replies or responses. Ms. Marshall

11. Methods: Internal/External • 3. Lateral (Horizontal) Communications • Maintained between people with the same level of authority in the organisation. To ensure that the various sections of the organisation work together at all times in the general interest of all e.g. the marketing department and finance department meet. • 4. Feedback • Good information is the basis of decision making. Successful communication of messages from and to decision-makers is vital. Everybody in the organisation should have the opportunity to influence decision making through providing feedback. By getting opinions through discussion, decision making may be slow but once a decision is reached then satisfaction with it is high. Feedback is important • because: • It makes the message clear. • It allows the subordinates to have a say. • It brings everyone closer together. • It encourages a democratic style leadership. Ms. Marshall

12. Methods: Internal/External Ms. Marshall

13. Written • Advantages • It provides a permanent record and therefore proof of the communication, NB contracts. • Can be read again if difficult to understand. • E-mail has made this a fast form of communication. • Disadvantages • Feedback is slower than with verbal communication. • There is a risk of information overload. Ms. Marshall

14. Verbal • Advantages • Instant feedback • Problems can be explained at the time. • Personal. • Body language and emotions can be very telling. • Disadvantages • No record • May not be prepared in advance • Receiver may not be listening e.g. in class… Ms. Marshall

15. Visual • Useful for analysing statistics. • Much clearer and easier to understand, especially for numerical information. • Effective way of showing trends. • Usually needs to be accompanied with another form of communication, e.g. a written explanation of a graph. Ms. Marshall

16. Written • Agenda of an AGM of a Private Limited Company: • 1. Minutes of the 2011 AGM • 2. Matters Arising from the Minutes • 3. Chairperson’s Report • 4. Auditors report and accounts • 5. Declaration of Dividend • 6. Appointment of Auditors • 7. Election/reappointment of Directors • 8. Motions • 9. A.O.B. Ms. Marshall

17. Written A Notice is a document setting out the date, time and venue of the meeting • Notice to each Board member: • A meeting of the Board of Directors of Kilbay Ltd will take place in • the Boardroom on 9th of June 2009 at 7.30 p.m. • Agenda: • 1. Minutes of the last Board Meeting • 2. Matters arising from the minutes • 3. Effects of economic downturn on Kilbay Ltd • 4. Possible introduction of a three-day week • 5. Future sources of finance for the company • 6. A.O.B. Agenda is a summary list of all the items to be dealt with at the meeting Ms. Marshall

18. Written • Minutes of the AGM of Seaview Club • 1. Minutes of the last AGM were read, approved and signed by the chairperson. • 2. There were no matters arising from the minutes. • 3. The Chairperson presented his report. • 4. The Auditors presented his report. • 5. A dividend of 10% was proposed and approved by the shareholders. • 6. The Board of Directors were elected for the next year. • 7. There was no A.O.B. • Signed: J. Thomas • Club Chairperson Minutes are a summarised written record of what happened at the meeting Ms. Marshall

19. Written • MEMO • To: Mary O’Brien, Managing Director • Subject: Sales Promotion Incentives • From: Peter Murphy, Marketing Manager • Date: 9th June 2009 • Sales promotion incentives are short term marketing techniques designed to increase sales of a product, e.g. Buy one get one free and a loyalty card scheme. • Signature: Peter Murphy, • Marketing Manager Ms. Marshall

20. Church View, Navan, Co. Meath. 9th June 2009 Miss Kate Quinn, 47. Quay Lane, Dun Laoghaire, Co. Dublin. Dear Kate, Re: Insurance Query In response to your query, concerning the two main types of car insurance cover, the following is my advice: Third Party Insurance provides compensation to people injured while in or by your car and to the owners of property damaged by your car, but it does not compensate for any damage to your car. Comprehensive Insurance provides compensation to all parties injured by your car and also compensation for any damage to your car. Due to the extra benefit provided by comprehensive, the premium will be higher but may be worth it, since it’s your first car. I hope this is of some help to you and feel free to contact me any time. Yours sincerely, Michelle Hughes Insurance Consultant Ms. Marshall

21. Written • Reports: a written document in which one person sets out the findings of her investigation into a certain issue. • Objectives • 1. To give information. • 2. To investigate an incident. • 3. To come up with solutions to a problem. • 4. To investigate the impact of decisions. • 5. To convince the reader to take a particular course of action. Ms. Marshall

22. Written • Layout of a report • Title: sets out objectives, the names of the people who commissioned and who wrote the report. • Table of Contents • Executive Summary: major findings and conclusions. • Terms of Reference: issues asked to investigate, instructions given. • Findings/Main Body of the report: sets out the facts and information collected and analysed and interpreted. • Conclusions & Recommendations: lessons to be learned and what should be done in the future. • Appendices: extra information such as relevant statistics used in the report. • Bibliography: list of sources used to write the report. Ms. Marshall

23. Written • Evaluate reports as a form of communication: • Advantages: • 1. Can gather together all relevant information on an issue. • 2. Can provide detailed research, information and analysis. • 3. Help managers to make informed decisions. • 4. Can be compiled by outside experts leaving managers more time for more important tasks, also means it is independent and not biased. • Disadvantages: • 1. Can discourage readers if they are too long or badly laid out. • 2. Requesting a report can be used as an excuse to postpone dealing with issues involved. • 3. Report recommendations can be ignored by the receivers. Ms. Marshall

24. Written • 2002: Draft a Report to the Managing Director about the four main barriers to effective communication • Title: Report to the Managing Director of A and B Ltd. on effective communications in the business. • Name: Prepared by J. Burke. Management Consultant. • Terms of Reference: To explain the main barriers to effective communications in the business • The Executive Summary: • For communications to be effective and successful there must be no barriers to the process. Unfortunately, both people and situations cause some barriers to be built up. Ms. Marshall

25. Written • Body of the Report/Findings: • Effective Communication: A and B Limited must have a plan to overcome the following barriers to effective communications: • Outline the main barriers… • Conclusion & Recommendations: Write a sentence or two to wrap it up. • Appendices. • Bibliography/Reference Ms. Marshall

26. Visual Pie Charts compare different categories, and are a good way of showing fractions and percentages. Bar Charts are useful for showing the relative sizes of whatever is being measure. Ms. Marshall

27. Visual A line/trend graph is used to show how the value of an item can change over time. A pictogram is a good way of showing relative sizes of the items in question. Ms. Marshall

28. Meetings • Distinguish between two types of meeting which are common in a business. • - AGM (Annual General Meeting). This is a meeting of the shareholders of a company. It is held once a year. At the AGM, shareholders can ask the directors questions, the chairperson gives an address, directors are elected, auditors are appointed and accounts are presented. • - EGM (Extraordinary General Meeting). This occurs when a matter of such importance arises that the business cannot wait until the next AGM to discuss the issue. • - Board Meeting. These are regular meetings held by the board of directors of the company. Tactical planning, strategic planning and review of company performance are often on the agenda of a board meeting. • - Management/executive meetings/ad hoc. Meeting held by various managers in the business to deal with operational issues/immediate problems. Ms. Marshall

29. Meetings • Benefits of Meetings • 1. Meetings allow discussions to take place on different proposals which in turn allow for good, effective decision-making/ co-ordination of the work of various departments. • 2. Meetings allow information to be disseminated to the various stakeholders in the company, e.g. a meeting of management and the employees of the firm regarding industrial relations issues. • 3. Meetings are creative forums, e.g. a brainstorming session during the idea generation stage of the product development process. • 4. Meetings are appropriate when sensitive or confidential issues are being discussed e.g. redundancy, dismissal of staff and business contraction/expansion. • 5. Meeting allow for feedback to be given and received. • 6. A written record (i.e. minutes) of decisions can be made for future reference Ms. Marshall

30. Meetings • State the advantages of meetings as a method of communication. • • They allow people to exchange ideas and information • • They allow decisions to be made by voting on proposals • • Problems can be discussed and solutions put forward • • People can report findings, etc. to other participants • • Face-to-face communication / less misunderstanding and conflict. Less formal language used here, suitable for outlining or OL Ms. Marshall

31. Verbal - Meetings • Disadvantages of meetings • Cost: Time involved can make them more costly than just exchanging information by e-mail. • Record: If minutes are not kept, then it can be easy to forget details. • Clarity: Complex and detailed information can be difficult to transmit verbally. • Accuracy: it can be easy to misunderstand something spoken if it is not clear. Ms. Marshall

32. Meetings • Outline the duties of a Chairperson at a meeting. • • Ensure that there is a quorum, open the meeting and run it in an orderly manner • • Ensure that the agenda is followed / ensure compliance with standing orders • • Make sure that everybody gets a chance to participate and air their views • • Ensure that any voting is carried out according to standing orders. • • Chairperson may have casting vote in the event of a tie. A quorum is the minimum no. of people that must be present at a meeting Ms. Marshall

33. Meetings • Outline the duties of a Secretary at a meeting. • • Ensure that all entitled to attend have received the Notice and Agenda in advance • • Ensure all facilities are arranged and all necessary documentation is available • • Read the minutes of the last meeting • • Read out any correspondence • • Take notes of discussions and decisions made in order to write the minutes. Ms. Marshall

34. ICT • How can ICT help business communications? • ICT refers to the use of computers, telecommunications and electronics to gather, store, process and distribute information. • The Internet: is an international network of computers connected through the telephone network. It can be used to transmit and receive data and information globally at a low cost. It allows companies to display websites for communicating information with customers and other stakeholders. • E-mail: allows documents and audio-visual files to be sent instantly at practically no cost. • Intranet are networks of computers within a business. They allow employees to send files to each other over the computer network, speeding up communications. • Electronic Data Interchange (EDI) is an automated stock ordering system that allows orders to be placed automatically from a computer in one business to a computer in another business, using the internet. Ms. Marshall

35. ICT • Benefits of EDI • Speeds up stock ordering and reduces human error. • Reduces costs by eliminating much of the paperwork and stock management costs. • Improves cash flow as invoices are sent out accurately and on time. • Increases customer satisfaction and improves sales as the firm secures regular stock delivery. Ms. Marshall

36. ICT • Video-conferencing: is a type of virtual meeting where participants can see and hear each other through the use of video cameras, telephone links and monitors. Therefore people can meet even when in different countries. This reduces travel costs and saves time for managers. • Software Applications: word-processing software allows for professional documents to be written up easily and at low cost. Database software stores a huge amount of customer details allowing for more targeted marketing. Spreadsheets allow users to do complicated mathematical calculations and display the results in graphs. Ms. Marshall

37. ICT • Benefits of ICT • Faster Communication • Advertising to a global audience becomes easier • Stakeholders relations are enhanced • Reduced marketing costs • Reduced travel costs • Staff motivation can be increased. • Risks of ICT • Information security: vulnerable to viruses, hackers. • E-crime: credit card fraud, phishers. • Business disruption: if internet is down! • Can be expensive: initial capital investment + ongoing maintenance. Ms. Marshall

38. ICT • Problems of e-mail • Technology availability • Data security • Business contracts • Audit trail • Authenticity • Negligence - liability • Incorrect address or data • Viruses Ms. Marshall

39. Choosing a Method of Communication • Factors to consider when choosing a method of communication: • Cost: generally businesses aim to minimise costs, e.g. sending an email instead of a letter. • Urgency: if the message is urgent then you need to use the quickest method available, e.g. telephone • Confidentiality: if the message is private then you must make sure another person cannot access it, e.g. a face to face conversation instead of a note on their desk. • Nature of the message: if the contents are very detailed a letter might be appropriate. If the news is distressing a face to face conversation or a telephone call may be appropriate. • Legal Requirements: some messages are required by law to be a certain format, e.g. a contract for buying a house must be written. Ms. Marshall

40. Barriers to communication technical jargon lack of feedback timing wrong method relationships Language noise not listening Ms. Marshall

41. Barriers to communication • For communications to be effective and successful there must be no barriers to the process. • Unfortunately, both people and situations cause some barriers to be built up. • An organisation needs to be aware of common barriers to effective communications: Ms. Marshall

42. Barriers to communication • Language • If the language is too technical or too difficult for the audience to understand then the message may be misinterpreted. • Need to choose language appropriate to the audience. Short clear sentences, visual supports etc. • Wrong Medium • The medium chosen must be appropriate to the message been given. A letter would be more appropriate than an e-mail if terminating employment. ‘Texting’ may be inappropriate for formal communications/medium chosen might be too slow for any action to occur. Using e media when personal communication is the most appropriate. Ms. Marshall

43. Barriers to communication • Not Listening : If the intended recipient is not listening when a verbal message is being communicated the information will not be received correctly. • Synopsise, Summarise, Review, and Repeat the message. • Timing (Wrong timing/inadequate amount of time) : Communications takes place with a purpose in mind. If the message is sent too late the recipient may not be able to act on the information. Ms. Marshall

44. Barriers to communication • Plan the process. Enough time must be given to read/listen, understand, and respond to the • message. Reduce speed in the interest of understanding. • No Feedback • The sender may be looking for feedback in order to take further action, e.g. the sales manager may require information from the production manager before taking an order from a customer. Build in a feedback mechanism into the process e.g. a specific time slot for feedback /questionnaire etc. Ms. Marshall

45. Barriers to communication • Relationships between people/Credibility Trust • A lack of trust between the parties acts as a barrier to effective communication. • Build long term ethical relationships to ensure a trusting relationship exists. • Use communications training to overcome all the barriers. • Information Overload. Too much information given / Main points may be lost. Reduce the volume of information so that issues can be dealt with effectively. Ms. Marshall

46. Data Protection Act 1988/2003 • The Rights of Data Subjects • Right of Access – person has right to receive copy of data held electronically relating to him/her, within 40 days of lodging a written request • Right of Correction – person has right to correction of errors/inaccurate information. • Right to Compensation – person has entitlement to be compensated for loss as a result of inaccurate information held. • The person also has the right to complain to the Data Protection Commissioner where a data controller is suspected to be in breach of the act. • Right of Removal- person has the right to have their name removed from direct marketing lists. Ms. Marshall

47. Data Protection Act 1988/2003 • The Obligations of Data Controllers • To keep the data secure – data must be protected against unauthorised access. • To update the information – data should be accurate and updated periodically • To use the data for the purpose intended- information should only be used for the specific purpose provided  • To obtain the information fairly and openly. • To keep a register of data kept. • To provide a copy of data held electronically within 40 days of receiving a written request from a person Ms. Marshall

48. Data Protection Act 1988/2003 • The Data Protection Commissioner is responsible for ensuring that the Data Protection Acts 1988 & 2003 are obeyed. • Duties: • Providing information to the public about the Acts. • Helping businesses develop codes of practice to keep within the law. • Investigating complaints from the public about businesses that may be breaking the law. • Maintaining a register of all organisations such as banks, market researchers and debt collection firms that may hold sensitive information about members of the public. Ms. Marshall

49. Recent Exam Questions • 2012Q4 (A) • Illustrate the factors that a business needs to consider when communicating with its various stakeholders. (20 marks.) • (b) Distinguish between the duties of a chairperson and a secretary in the organising and running of an Annual General Meeting (20 marks). • 2011 SQ (10 marks) • (a) Distinguish between two types of meetings which are common in a business. (b) Outline two benefits of meetings as a method of communication. Ms. Marshall

50. Recent Exam Questions • 2009 Q4 C • “There is often a legal requirement for members of the public to hand over their personal information to public bodies”. Discuss the provisions of the Data Protection Act 1988 in relation to: • (i) the Rights of the Data Subjects • (ii) The Obligations of Data Controllers Ms. Marshall