The nature of communication

1 Tactical level

At the tactical or middle-management level, information supports departmental planning, resource allocation and control over the medium term, often around the annual budget. It is mainly internal but may include relevant external information, is more detailed than strategic information but more summarised than operational data, and commonly compares budgets, targets and actual performance.

1.1 Overcoming communication barriers

• use plain language, define technical terms and translate where necessary;

• select a medium suited to the message, audience, urgency and required record;

• encourage questions, active listening and feedback to confirm understanding;

• reduce status barriers through accessible managers and safe upward communication;

• choose an appropriate time and manage strong emotions before communicating;

• filter, prioritise and summarise information to prevent overload; and

• follow up important messages and provide communication training where needed.

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2 Communication

Communication within businesses is obviously important: in particular it’s required for planning, coordination, and control.

The communication pathway is more complex than you might think. The following diagram is not needed for the exam, but it is useful for you to understand the process and how it could break down.

First of all, the person who wants to do the communicating forms the thought. Then they encode it; they find a way of expressing it, in other words. The thought is transmitted and that could be by sound, it could be by letter, it could be by email. It has to be received by the recipient and recipient has to decode it. On many occasions after it’s decoded there will be some sort of feedback. Feedback could be an action, it could be nodding your head, it can be asking a question because you don’t understand the message properly or it has provoked further queries.

The important thing to realise is that communication can break down at any of these stages. If the thought was garbled to start with, you are lost. If it’s not encoded properly for example, if it’s written down in a confusing way then that will interfere. Transmission can be messed up. We have all had, no doubt, examples of letters which have gone astray or emails which have gone to the wrong person. That person might not receive the message. One of the reasons it might not be received is they simply don’t open their inbox and finally they might decode it incorrectly, they misunderstand what you are trying to communicate.

3 Communication direction and level

Communication within the organisation can be:

• Vertical, such as between subordinate and superior.

• Horizontal, between the people of the same levels and different departments.

• Diagonal when a subordinate in one department has to report or give information to a superior in another department.
  

And it can be formal or informal. Examples of informal communication would simply be chatting around the coffee machine. An example of a formal communication would be memorandum issued to all members of staff.

The communication and information needed at the various levels in the organisation differs

3.1 Strategic level

At the strategic level, the top level (think of the board planning and directing) the information tends to be:

• Internal and external (eg what are our sales and what are competitors’)
  

• Rounded (eg to the nearest $million)
  

• Historical and forward-looking (eg what were last month’s sales and what should our budgets and plans be?)
  

• Many estimates (eg almost everything in a budget is an estimate)
  

• Routine and ad hoc (ad hoc = occasional or once off Eg what is the economy doing in Brazil and should we open there)
  

3.2 Operational level

At the operational level or lowest level (think of the people who record transactions) the information tends to be:

• Internal
  

• Very accurate
  

• Historical
  

• Factual and very few estimates
  

• Routine

4 Barriers to communication

It’s important to understand the factors that can act as barriers to communication.

Inappropriate language. Obviously this could mean speaking a foreign language to people who don’t understand it, but in practice it is more likely to be using terminology which not everyone understands. So for example, if you are in a firm of accountants and you are writing to a client and you are talking about tax computations, terms such as “disallowable”, “capital allowances”, “adjustment of profits” and so on may not simply be understood by the client and if that’s the case communication has not been successful.

Status. Differences in status can interfere. This can be in two ways. First of all it could be the person at the top of an organisation not wanting to hear what the people at the bottom are saying, perhaps not believing that people at the bottom have anything of value to say. It can happen the other way round where people at the bottom of the organisation are frightened to talk to people at the top of the organisation.

Emotion. If you go into an appraisal review and you are very angry or worked up about something or even just frightened about something, the chances are that communication will not be successful.

Wrong medium. If, for example, you wanted to give your employees information about the technicalities of their pension scheme, probably giving them a long lecture isn’t going to be very useful. There is too much technical information in that for them to understand. Presenting the information in written form or perhaps a mix of communication might be more successful. For example, an oral presentation explaining the main points and then the detailed material available in written form.

Reluctance to transmit or receive. It could be that a manager doesn’t want to point out shortcomings in a staff member’s performance. It could be that the staff member is not willing to believe that there is anything wrong with their performance.

Information overload. This is a curse of the information age. We are often bombarded with so much information that we really can’t see the wood for the trees. We spend so much time looking at information, deciding whether or not we need to know the information or not, that there is a real danger we overlook the important material. It is easy to suspect that this is sometimes used deliberately: send lots of information and bury bad news inside it.

Good communication should be:

• Concise
  

• Sufficiently comprehensive
  

• Understandable
  

• Relevant
  

• Timely
  

• Accurate
  

• Persuasive/effective
  

• Economic
  

5 Leavitt

Leavitt identified several other ways in which the patterns of communication could be organised. Shown here are the Y shape, the wheel shape, the circle and the chain.

What can we learn from this?

Well, the chain represents a typical hierarchal arrangement within an organisation. At one end you might have the managing director; at the other end you have staff at the bottom of the organisation. Clearly there is going to be rather slow communication between top and bottom.

In the wheel type of communication by contrast, assuming that the boss is at the centre then there’s going to be very fast communication with the rest of the organisation. This is a highly centralised, almost entrepreneurial organisation with power at the centre. This enables organisation to move very quickly.

The circle type is relatively slow in communication; the Y is relatively fast in communication.