Purposes of Communication (Cambridge (CIE) A Level Business): Revision Note

The purpose of communication

• Communication is the successful transfer of messages between sender(s) and receiver(s) 

Internal communication

• Internal communication is the exchange of messages between two or more members of the same organisation

  • It helps to ensure the business runs smoothly, as it allows departments, teams and individuals to share information, make decisions and work towards common goals

Situations where internal communication is needed

• Coordination

  • Ensures departments, like marketing, operations and finance, are aligned and working together effectively

    • E.g. a team meeting to plan a product launch

• Motivation and morale

  • Keeps employees informed about company plans and progress, which can increase engagement and job satisfaction

    • E.g. a training session introducing a new computer system

• Decision-making

  • Allows managers and employees to exchange ideas, give feedback, and make well-informed choices

• Delegation and instructions

  • Managers communicate tasks clearly to staff so that work is done efficiently and correctly

    • E.g. a manager emailing staff about new safety procedures.

• Performance management

  • Used for appraisal, giving praise or constructive feedback, and setting targets

• Problem-solving

  • Helps resolve issues quickly through open dialogue and collaboration

External communication

• External communication is the exchange of message(s) between an organisation and external stakeholders such as customers, suppliers or investors

  • It helps a business build and maintain good relationships with people or groups outside the organisation who have an interest in the business.

Situations where external communication is needed

The importance of communication

• Effective communication ensures that clear messages are sent, received, understood and acted upon in the way intended

• Effective communication should be

  • Clear and unambiguous

  • Appropriate to the context and to the sender

  • Sent to the correct receiver in an accessible format

  • Timely and contain only the required amount of detail

The benefits of effective communication

• Reduces mistakes

  • Clear instructions and feedback between managers and staff help reduce errors, which saves time and improves efficiency

• Clarifies roles and expectations

  • When communication is effective, everyone knows their responsibilities

  • This increases accountability and helps teams work more productively

• Aligns the team with business goals

  • Communicating the company’s values and objectives ensures all employees are working towards the same targets

• Improves customer understanding

  • By providing accurate and clear information about products or services, businesses can improve customer satisfaction and reduce complaints

• Lowers operational costs

  • Good communication avoids misunderstandings and delays

  • This helps a business operate more efficiently and reduce unnecessary expenses

• Supports growth and innovation

  • When communication flows well, businesses can spot and act on new opportunities quickly, such as launching new products or entering new markets

• Improves stakeholder relationships

  • Managers must manage communication channels carefully to ensure the right people stay informed

  • This builds trust with key groups such as investors, employees and suppliers

• Avoids communication overload

  • A 2021 survey of US workers found over one-third were overwhelmed by excessive emails, which made them consider leaving

  • Managing the volume of communication is vital to protect employee wellbeing and retention