Business | Internal and external communication

Hello Future Business Leader! Your Guide to Internal and External Communication

Welcome to a super important chapter! Communication is often seen as a 'soft skill,' but in business, it is the engine that drives success. If a message is unclear, it can lead to mistakes, wasted money, and unhappy customers.

In this chapter, we will break down how businesses talk to their employees (internal communication) and how they talk to the outside world (external communication). Don't worry if this seems tricky at first; we'll use simple examples to make everything crystal clear!

Quick Review: The Basics of Communication

Communication is the process of transferring information from a sender to a receiver, with the information being understood by the receiver.

The Purpose of Business Communication

Why do businesses bother communicating? Here are the four main reasons:

1. To Inform: Sharing facts, data, or instructions (e.g., telling staff the new opening hours).
2. To Instruct: Giving specific directions on what needs to be done (e.g., a manager telling a worker how to operate a new machine).
3. To Motivate: Encouraging employees to work harder and achieve goals (e.g., praising a team for hitting their sales targets).
4. To Coordinate: Making sure different departments or people are working together smoothly on the same task (e.g., the Production Department telling Sales when a new product will be ready).

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Section 1: Internal Communication

Internal communication is the sharing of information between people within the same business organization.

The Direction of Internal Communication

Internal messages flow in specific directions, often described using a simple model: Vertical or Horizontal.

1. Vertical Communication (Up and Down the Ladder)

Think of a ladder. Vertical communication moves between different levels of the management hierarchy.

• Downward Communication: Flows from managers to subordinates (people below them).

  Example: A CEO sending an email about a new strategy to all department managers. This usually involves instructions or new policies.

• Upward Communication: Flows from subordinates to managers (people above them).

  Example: A customer service assistant giving feedback or a report to their supervisor. This usually involves reports, suggestions, or complaints.

2. Horizontal Communication (Across the Same Level)

This happens between people who are at the same level in the hierarchy.

• Example: The Marketing Manager having a meeting with the Finance Manager to discuss the budget for a new advertisement.

Quick Tip: Horizontal communication is essential for coordination and teamwork, as it helps prevent departments from working in isolation.

Methods of Internal Communication

Businesses choose different methods depending on the urgency and sensitivity of the information:

A. Verbal (Oral) Communication

• Includes: Meetings, face-to-face chats, telephone calls, video conferencing.
• Pros: Fast, allows immediate feedback (the receiver can ask questions instantly), and personal tone can be used for motivation.
• Cons: No permanent record is kept; messages can be forgotten or misunderstood.

B. Written Communication

• Includes: Memos, reports, letters, internal notices, newsletters.
• Pros: Provides a clear, permanent record (proof); suitable for complex instructions.
• Cons: Can be slow; feedback is not immediate; uses up paper/resources.

C. Electronic Communication

• Includes: Email, instant messaging, internal business social media platforms (intranets).
• Pros: Extremely fast; can reach many people simultaneously, often cost-effective.
• Cons: Requires technology and internet access; messages can be ignored (information overload); technical failure is a risk.

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Section 2: External Communication

External communication is the sharing of information between the business and people outside the organization. This is crucial for selling products and maintaining the company's reputation.

Key External Stakeholders

A business needs to communicate effectively with several groups outside its walls:

1. Customers: To advertise products, process orders, handle complaints, and collect feedback.
2. Suppliers: To place orders for raw materials, negotiate delivery schedules, and arrange payments.
3. Shareholders/Investors: To inform them about the financial performance of the company (usually via annual reports).
4. Government/Local Authorities: To pay taxes, ensure the business is following laws (like health and safety), and apply for permits.
5. The General Public: To build a positive reputation (goodwill) and inform them about the business’s role in the community.

Methods of External Communication

A. Traditional Written Methods

• Letters (often used for formal communications like contracts or legal warnings).
• Press Releases (formal written statements sent to newspapers/media outlets).
• Advertising Materials (leaflets, posters, print ads).

B. Electronic and Digital Methods

• Websites: Essential 24/7 source of information for customers and investors.
• Email: Used extensively for customer service, placing orders, and marketing campaigns.
• Social Media: Used for advertising, customer engagement, and managing reputation quickly.

C. Verbal Methods

• Sales calls, conferences, formal presentations to investors, telephone customer service helplines.

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Section 3: Choosing the Right Communication Method

A good manager doesn't just send a message; they choose the best channel for it. Selecting the wrong method can become a serious barrier to communication.

Factors Influencing the Choice of Method

1. Speed and Urgency

If the information is needed immediately (e.g., a critical machine has broken down), verbal communication (a phone call or face-to-face chat) is best. A letter would be useless.

2. Need for a Record

If the information is important and needs to be legally documented (e.g., a contract or a formal disciplinary warning), a written or emailed record is essential.

3. Cost

Using instant messaging or internal email is usually much cheaper than holding a formal, long meeting requiring travel.

4. Confidentiality

If the information is private (e.g., salary information or secret research), it should not be sent over a wide channel like a general email or public noticeboard. Face-to-face or secure, password-protected communication is better.

5. Complexity of the Message

If the instructions are complex (e.g., how to assemble a new machine), a detailed written report with diagrams or a video is far better than a quick verbal chat, which could lead to mistakes.

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Section 4: Barriers to Effective Communication

A barrier is anything that stops the message from being successfully understood by the receiver. These barriers lead to mistakes, wasted time, and lower productivity.

A. Sender Barriers (Problems with the message creation)

• Poorly Chosen Method: Sending a two-page report by text message instead of email.
• Using Jargon: Using highly technical words or abbreviations that the receiver does not understand. (e.g., telling a new employee to check the 'P&L’ when they don't know what ‘Profit and Loss’ means.)
• Ambiguity: Sending a message that can be interpreted in more than one way (unclear instructions).

B. Receiver Barriers (Problems with the message reception)

• Lack of Attention: The receiver is distracted, busy, or uninterested (e.g., checking their phone during a meeting).
• Failure to Listen: The receiver only hears part of the message or is already thinking about their response instead of listening.

C. Technical/Physical Barriers (Problems with the channel)

• Noise: Actual noise (loud machines) or too much background distraction (a busy office).
• Technical Failure: A broken phone line, a server crash, or lost internet connection.
• Long Chain of Command: If a message has to pass through five different managers before reaching the worker, it can get distorted or delayed.

How to Overcome Barriers (The Manager's Role)

1. Use clear, simple language suitable for the receiver.
2. Always seek and check for feedback (ask: "Can you confirm you understood this?").
3. Repeat important messages using more than one method (e.g., send instructions by email, and then confirm them in a meeting).
4. Keep communication channels as short as possible (reduce the chain of command).