Commerce | Communications

Welcome to Communications: Connecting Commerce!

Hello future business leaders! This chapter is all about Communication—the vital link that holds all business activities together. In the context of "Aids for Commerce," communication is the tool that allows buying, selling, managing, and coordinating to happen both within a company and with the outside world.

Don’t worry if this chapter seems broad; we will break down how businesses talk to each other and their customers, and why choosing the right method is crucial for success.

Section 1: What is Communication? (The Basics)

Definition of Communication

Communication is simply the process of sharing information, ideas, and messages between two or more people. If a message isn't understood, communication hasn't happened!

The Communication Process – A Step-by-Step Guide

Effective communication follows a specific loop. If any step breaks, the message fails. Think of this as sending a package (the message) through the mail (the channel).

1. Sender: The person who starts the process and has the information (e.g., the manager).
2. Encoding: Turning the idea into a format that can be sent (e.g., writing an email or speaking a sentence).
3. Message: The actual information being shared (e.g., "The meeting is at 10 AM.").
4. Channel/Medium: The method used to send the message (e.g., telephone, email, face-to-face).
5. Decoding: The receiver interpreting or translating the message back into an idea.
6. Receiver: The person or group who receives and processes the message (e.g., the employee).
7. Feedback: The receiver’s response, showing they understood the message (e.g., "Got it, 10 AM."). This completes the loop!

Did you know? Lack of feedback is one of the most common reasons for miscommunication in business.

Section 2: Types of Communication in Commerce

Businesses communicate in different ways depending on who they are talking to and how serious the message is.

1. Internal vs. External Communication

Internal Communication (Inside the Business)

This is communication that happens within the organisation—between managers and staff, between departments, or among employees. Its main purpose is coordination and control.

• Examples: Staff meetings, internal memos, notices on the staff board, company emails.

External Communication (Outside the Business)

This is communication between the business and people outside the organisation. Its main purposes are marketing, sales, and reputation management.

• Examples: Advertisements, letters to suppliers, phone calls to customers, press releases, bank statements.

2. Formal vs. Informal Communication

Formal Communication

This follows the official structure and chain of command within the business. It is usually documented and official.

• Advantages: Reliable, provides a written record, covers serious matters (like contracts).
• Examples: Company reports, formal dismissal letters, official board minutes.

Informal Communication

This is casual communication that does not follow the official chain of command. This network is often called the grapevine.

• Advantages: Very fast, helps build relationships and morale.
• Disadvantages: Information can be inaccurate or spread rumours; no official record.

Key Takeaway: Businesses need both types. Formal communication ensures control; informal communication ensures speed and strong relationships.

Section 3: Methods (Channels) of Communication

The channel a business chooses depends entirely on its goals: speed, cost, confidentiality, and the need for a record.

1. Oral (Verbal) Communication

Messages passed using spoken words.

• Examples: Face-to-face meetings, telephone calls, presentations, video conferencing.

Pros and Cons of Oral Communication

• Advantages (Pros):
• Immediate Feedback: Questions can be answered instantly.
• Speed: Messages are conveyed very quickly.
• Personal Touch: Easier to build relationships (especially when face-to-face).
• Disadvantages (Cons):
• No Permanent Record: Difficult to prove what was said later.
• Misinterpretation: Tone of voice and accents can cause confusion.
• Distance Limits: Requires people to be present or connected instantly.

2. Written Communication

Messages passed using text or symbols.

• Examples: Letters, contracts, reports, memos, manuals.

Pros and Cons of Written Communication

• Advantages (Pros):
• Permanent Record: Essential for legal agreements and tracking performance.
• Clarity and Precision: Allows time for careful checking and editing.
• Reach: Can be sent to many people simultaneously (e.g., printed newsletter).
• Disadvantages (Cons):
• Slow Feedback: Takes time to write, send, and receive a reply.
• Cost: Printing and postage can be expensive.
• Impersonal: Lacks the human connection of speaking.

3. Visual and Non-Verbal Communication

Messages passed without words, often complementing oral or written methods.

• Examples: Charts, graphs, diagrams, posters, body language (gestures, posture).

Remember: Body language often communicates more than the actual words spoken!

4. Information and Communication Technology (ICT)

In modern commerce, ICT dominates communication. These are the electronic methods used to transmit data.

Key ICT Methods in Commerce:

• Email: Fast, cheap way to send written messages globally.
• Video Conferencing (e.g., Zoom/Teams): Allows people in different locations to meet visually and orally.
• Social Media/Websites: Primarily used for external communication (marketing, customer service).
• Electronic Data Interchange (EDI): The automatic electronic exchange of business documents (like orders and invoices) between computers.

Pros and Cons of ICT Communication

• Advantages (Pros):
• Speed and Reach: Instantaneous transmission worldwide.
• Cost-Effective: Once equipment is bought, the cost per message is very low.
• Accessibility: Employees can often work remotely (teleworking).
• Disadvantages (Cons):
• Security Risks: Data breaches, hacking, and viruses.
• Technical Failure: Dependent on reliable internet and power; systems can crash.
• Information Overload: Too many emails or messages can lead to important details being missed.

Key Takeaway: Businesses must weigh the cost vs. speed vs. the need for a record when choosing a method. For contracts, choose written (physical or secure electronic). For quick coordination, choose oral or email.

Section 4: Barriers to Effective Communication

A barrier is anything that stops the message from being understood accurately. For commerce to run smoothly, businesses must identify and remove these barriers.

Common Barriers and How to Overcome Them

1. Language and Jargon Barrier

The sender uses words the receiver doesn’t understand, or words that have different meanings to different people.

• Example: A financial manager using highly technical industry terms (jargon) when speaking to a new intern.
• Solution: Use simple, clear language. Define technical terms if they must be used.

2. Physical Barriers (Noise and Environment)

Distractions or technical faults prevent the message from getting through clearly.

• Example: A noisy factory floor interrupting a phone call, or a bad internet connection causing video lag.
• Solution: Choose a quieter environment; use clearer channels (e.g., shift from a call to a detailed email if noise is unavoidable).

3. Emotional and Attitudinal Barriers

The receiver's feelings, prejudices, or distrust block the message, regardless of how clearly it was sent.

• Example: An employee ignoring a manager's instructions because they dislike the manager (prejudice).
• Solution: Build trust and respect. Be open-minded and avoid making assumptions about the receiver.

4. Filtering and Information Overload

Filtering happens when the sender deliberately leaves out information (e.g., only telling the boss the good news). Information overload occurs when the receiver gets too many messages and stops paying attention.

• Solution (Filtering): Encourage honest and open feedback systems.
• Solution (Overload): Summarise key points; use bullet points; send fewer, more targeted communications.

Key Takeaway: To be an effective communicator, you must always think about your receiver and choose a channel that minimises potential misunderstandings.

Conclusion: Communication as an Essential Aid

In Commerce, effective communication is not just about talking; it's about efficiency. Clear internal communication ensures employees know their roles, leading to higher productivity. Clear external communication ensures customers are informed, orders are processed correctly, and suppliers deliver on time. By mastering these methods and avoiding barriers, businesses can operate successfully in the global marketplace.