Page 126 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 2 People in business

KEY TERM Effective communication brings a number of benefits to businesses including:
Eff ective communication: ■ Reducing the risk of mistakes – the receiver of a message must understand what it
information passed between is they are being asked to do by the sender. If the message is not understood then
two or more people or groups,
the instructions or task will not be completed correctly.
with feedback to confirm that the
■ Enabling faster decision-making – if the number of people who need to receive the
message has been received and
understood. communication is kept to a minimum, then this will speed up the decision-making
process.
■ Enabling quicker responses to market changes – the longer it takes to communicate
changes in markets, the slower the business will be to respond and may miss
marketing opportunities as a result.
■ Improving coordination between departments – decisions taken by one
department often have an impact on other departments. There needs to be

effective communication between departments so that each knows what

the other is doing and can respond appropriately. For example, if the Marketing
Department is going to run an advertising campaign to increase sales, this needs
to be communicated to other departments such as Operations, because they
will need to make sure they are able to produce the goods to meet any increase
Motivation: see Chapter 6, in demand.
page 71.
■ Improving morale and motivation of the workforce – if the workforce knows what
is going in the workplace and is able to take part in discussions, this will make
workers feel valued and part of the organisation.
■ Improving customer relationships – keeping customers informed about the
Customer relationships: progress of their orders or any new products that the business has added to its
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see Chapter 10, page 140. range will make customers feel valued and they will want to continue to buy from
the business in the future.

ACTIVITY 9.1

Look at the examples below of different types of business communication.
Explain why it is important that these messages are communicated effectively. You should consider what might happen

if the message is not communicated effectively – the consequences of poor communication.

1 Fire safety notice.
2 Raw materials order to a supplier.
3 Complaint from a customer about a product they have bought which is faulty.
4 Warning to an employee who has been late for work three times in the last week.
5 Sales order from a customer.

6 New wage rates for all workers in three factories located in different parts of your country.
7 Statement of the business’s bank balances.
8 Customer contact details.
9 Company website.
10 Advertisement for a new product the business is introducing to the market.

Benefits and limitations of communication methods
Communication methods can be divided into four main types as shown in
Figure 9.3.