Why Communication is Important (Cambridge (CIE) IGCSE Business): Revision Note

The importance of communication

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

The communication process

• 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

• Managers should make sure that communication is organised and controlled to ensure that a suitable level of communication exists between key stakeholders

  • A 2021 survey of US workers found that more than one-third reported email overload that might lead them to resign from their jobs

Benefits of effective communication

• Helps managers and employees to minimise mistakes

• Supports everyone involved in a business to understand their role and know what is expected of them

• Ensures that the business's values and objectives are clear

• Provides customers with the information they need to understand goods and services

• Minimises business costs

• Helps businesses to effectively exploit new opportunities

Methods of communication

• Businesses have a range of ways to organise communication, both within the organisation and with external stakeholders

1. Meetings

• Meetings are discussions that take place either in person or through video calls

• They are useful when detailed conversations are needed or when team collaboration is important

  • For example, a manager might hold a virtual meeting with department heads to plan for a product launch

Advantages and disadvantages of meetings

2. Email

• Emails are written messages sent electronically over the internet to one or more people

• They are useful for sharing documents, giving instructions or contacting external stakeholders like suppliers or customers

  • For example, a sales manager may email a customer with an invoice and delivery confirmation

Advantages and disadvantages of email

3. Text messages

• Text messages are short, written communications sent by mobile phone

• They are useful for urgent reminders or updates where a quick response is needed

  • For example, a supervisor might text an employee to remind them about a last-minute shift change

Advantages and disadvantages of text messages

4. Social media

• Social media platforms like Facebook, Instagram, and X allow businesses to communicate with the public or with specific groups

• They are useful for marketing, brand updates, and responding to customer questions and feedback

  • For example, a clothing brand might post product updates and special offers on Instagram to attract customers

Advantages and disadvantages of social media

5. Phone calls

• Phone calls allow two or more people to speak directly using a landline or mobile phone

• They are useful for quick decision-making or when immediate clarification is needed

  • For example, a supplier may call the purchasing manager to confirm an urgent order

Advantages and disadvantages of phone calls

6. Letters

• Letters are written documents usually printed and delivered by post or hand

• They are used for formal communication or when a permanent, signed record is needed

  • For example, a company may send a job offer or contract to a new employee by letter

Advantages and disadvantages of letters

7. Posters

• Posters are printed signs or notices placed in visible areas such as staff rooms, canteens or shop floors

• They are best for sharing key messages that need to be seen often, like health and safety reminders

  • For example, a poster in a factory might remind workers to wear safety goggles

Advantages and disadvantages of posters

8. Noticeboards

• Noticeboards are boards found in workplaces where printed messages, rotas or announcements can be pinned up

• They are useful for displaying long-term or regularly updated information such as shift timetables or company news

  • For example, a restaurant might use a noticeboard to show the weekly staff schedule

Advantages and disadvantages of noticeboards

Internal and external communication

• Internal communication is the exchange of message(s) between two or more members of the same organisation

  • For example, telephone call between a sales manager and a finance team member

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

  • For example, sending an online order form to a supplier 

Recommending communication methods

• Businesses are likely to develop their communication methods and style over time

  • Smaller business may only be able to afford to communicate with customers through posters, leaflets and social media

  • Larger businesses are likely to have greater budgets, which allow for the use of television and billboard promotional campaigns

Factors that influence the choice of communication method