ways in which communication can influence the efficiency of a business

7.2 Business Communication – Role of Management

Objective

To understand how communication influences the efficiency of a business and to master the key concepts required by the Cambridge A‑Level Business (9609) syllabus.

1. Purposes of Communication in Business (7.2.1)

Communication is essential because it enables the following purposes. Each purpose is linked to the principal stakeholder groups that benefit from it.

• Information sharing – transmitting data, facts and instructions to employees, managers, shareholders, suppliers and customers.
• Coordination – aligning activities across departments, teams and external partners.
• Motivation & employee engagement – inspiring staff, reinforcing commitment and encouraging participation.
• Control – monitoring performance, providing corrective feedback and ensuring standards are met.
• Decision‑making – supplying accurate, timely information for strategic and operational choices.
• Relationship building – developing trust with employees, customers, suppliers, regulators and the wider community.
• Change management – communicating the need for, and the process of, organisational change.
• Ethical / legal purposes – ensuring compliance with legislation, safeguarding confidentiality and promoting ethical behaviour.

2. Methods of Communication (7.2.2)

Four basic methods are recognised in the syllabus. The table links each method to typical business channels, adds modern examples and introduces a sub‑category for digital visual communication.

3. Channels of Communication (7.2.3)

3.1 Types of Channels

• One‑way (downward) – information moves from senior management to staff.
• One‑way (upward) – information moves from staff to senior management.
• Two‑way (interactive) – sender and receiver exchange messages, allowing feedback.
• Vertical – flows between different levels of the hierarchy (e.g., manager → staff or staff → manager).
• Horizontal – flows between peers or departments at the same organisational level.

3.2 Diagram – Differentiating the Four Channel Types

Use the sketch below (drawn by the learner) to visualise the relationships:

                ┌─────────────┐
                │  Top‑Level  │
                │ Management  │
                └─────▲───────┘
                      │ (downward, one‑way)
          ┌───────────┴───────────┐
          │                       │
   ┌──────▼───────┐        ┌──────▼───────┐
   │ Middle‑Level │        │ Middle‑Level │
   │ Managers     │        │ Managers     │
   └──────▲───────┘        └──────▲───────┘
          │ (upward, one‑way)│
          │                 │
   ┌──────▼───────┐   ┌─────▼─────┐
   │ Front‑line   │   │ Front‑line│
   │ Staff        │   │ Staff     │
   └──────────────┘   └───────────┘
          ▲                 ▲
          │←─── Two‑way (interactive) ───►│
          └────── Horizontal (peer‑to‑peer) ──────┘

3.3 Typical Problems Associated with Each Channel

3.4 Case‑Study Snippet – A Vertical Bottleneck

Situation: At a UK‑based apparel manufacturer, the design team submitted new‑season sketches to the product‑development department, which then had to obtain approval from senior management before passing them to production. Each approval stage added a 2‑week delay, causing the company to miss the seasonal launch window.

Resolution: Management introduced a cross‑functional “fast‑track” committee that combined senior designers, product developers and a senior manager in a single vertical‑horizontal team. Decisions were made in a two‑way, real‑time video conference, cutting the approval time from six weeks to ten days and allowing the collection to hit the market on schedule.

4. How Communication Influences Business Efficiency

1. Clarity of instructions – Reduces errors and re‑work.
2. Speed of information flow – Enables quicker decisions and rapid market response.
3. Effective coordination – Aligns activities, prevents duplication and bottlenecks.
4. Motivation & employee engagement – Open channels boost morale and productivity.
5. Feedback & continuous improvement – Early problem identification and corrective action.
6. Decision‑making quality – Accurate, reliable information improves strategic choices.
7. Risk management – Timely communication of risks limits negative impact.

5. Key Communication Channels and Their Impact on Efficiency

6. Management Practices to Enhance Communication Efficiency

• Establish clear communication protocols – who communicates what, to whom, and when.
• Use a hierarchy of channels – urgent matters via instant messaging; detailed analysis via reports.
• Encourage two‑way communication – managers must listen as well as speak.
• Provide training on effective written and oral communication skills.
• Regularly review and streamline communication processes to eliminate redundancy.
• Integrate **feedback loops**: information from controlling (performance reports) feeds back into planning and organising.

7. Barriers to Communication and Mitigation (7.2.4)

Communication Audit Checklist (for exam tasks)

• Clarity: Is the message unambiguous and easy to understand?
• Relevance: Does the information relate directly to the receiver’s needs?
• Timeliness: Is the message delivered when it can be acted upon?
• Confidentiality & security: Are sensitive details protected?
• Appropriate channel: Does the chosen medium suit the purpose and audience?
• Feedback mechanism: Is there a clear way for the receiver to respond?

Case Example – Overcoming Information Overload

At a multinational electronics firm, the marketing department received an average of 150 emails per day, leading to missed product‑launch deadlines. Management introduced a “Daily Digest” – a single, concise email summarising priority items, with non‑essential updates moved to a shared intranet folder. Within three weeks, the team reported a 30 % reduction in missed tasks and a noticeable increase in on‑time project delivery.

8. Role of Communication in the Four Management Functions (7.2.5)

• Planning – Communicating objectives, market research and forecasts ensures plans are realistic and shared.
• Organising – Clear allocation of responsibilities and resource information enables efficient structuring of work.
• Leading – Motivational speeches, feedback and coaching inspire staff and align behaviour with goals.
• Controlling – Reporting systems and performance feedback allow managers to monitor progress, take corrective action and feed information back into the planning stage.

9. Suggested Diagram – Communication Links the Four Management Functions to Business Efficiency

Draw a flowchart (learner’s task) showing:

1. Four boxes labelled Planning, Organising, Leading, Controlling arranged clockwise.
2. Arrows from each function to a central box labelled Effective Communication.
3. From the central box, an arrow points to Improved Business Efficiency.
4. Include a feedback arrow from Controlling back to Planning to illustrate the loop.

Summary

Effective communication is a core managerial tool that directly influences a business’s efficiency. By understanding its purposes (including stakeholder, ethical and legal dimensions), using the appropriate methods and modern channels, selecting the right vertical or horizontal pathways, and actively removing barriers, managers can streamline operations, improve decision‑making, motivate staff and gain a competitive advantage.