0264 · 2.3.1Why communication is important

Communication concepts and business benefits

0:00A restaurant changes a customer’s order, but the kitchen receives the original instructions. The meal arrives incorrectly, ingredients are wasted, and the customer waits longer. A simple message has affected costs, service and the business’s reputation. By the end of this video, you will understand how communication supports a business and how to choose a suitable method. Communication is the transferring of a message from the sender to the receiver, who understands it.

0:23The sender is the person or organisation sending the message, while the receiver is the person or organisation receiving the message. Between them, a medium is the method used to transfer the message. Feedback is the receiver’s response to a message. In our restaurant, the manager makes a phone call, and the kitchen supervisor confirms the changed order. This response helps the manager check whether the instructions were understood. Sending information and checking understanding together help the business achieve the intended result.

0:51Internal communication is communication between people within the business. A supervisor explaining a task to an employee is an example. External communication is communication between the business and people or organisations outside it. Messages to customers, suppliers and government organisations fall into this category. The distinction depends on who exchanges the message. An email between departments is internal, while the same method becomes external when used to contact a supplier.

1:16A phone call can also serve either purpose. The method tells us how information travels; the participants determine its internal or external classification. Businesses need communication for instructions, coordination, accuracy, decisions, employee motivation, and relationships with customers and suppliers. Clear instructions help employees understand their tasks and carry them out correctly. For example, a supervisor explains which orders must leave first. Employees can then organise their work around the required delivery times.

1:46Coordination connects activities across departments. In a furniture factory, the sales department tells production about a large customer order. The production manager can then arrange enough materials before work begins. The order is finished on time, so the customer receives it when promised. Fewer mistakes also protect the business’s resources. A purchasing manager who emails exact quantities gives the supplier a clear record to follow. The supplier then delivers the right amount of materials.

2:12The business therefore avoids paying for anything it cannot use. Better decisions depend on relevant information reaching the person responsible. Customer comments about unsuitable opening hours can reach a shop manager. With that information, the manager can choose a schedule that suits more customers, so sales can rise. Employees can feel more motivated when managers explain business aims and listen to suggestions. Understanding their contribution gives employees a clearer sense of purpose.

2:38Motivated employees tend to work harder and are less likely to leave the business. Reliable contact also supports good relations with customers and suppliers. A delivery update helps a customer plan when to receive an order. Clear payment arrangements allow a supplier to organise its finances. These exchanges build confidence and make future cooperation easier.

Communication methods compared

2:58Businesses can use meetings, email, text messages, social media, phone calls, letters, posters and noticeboards. Each method offers a different combination of speed, reach, detail and opportunities for feedback. The business must match these features to its purpose. An urgent instruction and a formal offer can therefore require different approaches. Face-to-face meetings bring participants together in the same place. Employees benefit from immediate feedback because they can ask questions during the explanation.

3:25Body language helps managers recognise uncertainty and clarify a difficult point. However, the business spends time and money gathering participants, especially when they usually work at different locations. A virtual meeting uses a video call to connect participants in different places. The business saves travel costs because employees can join from their usual locations. It can also arrange a conversation quickly when suitable equipment is available. However, connection failures can interrupt employees’ participation, and managers may find personal relationships harder to build through a screen.

3:57Email allows a business to send detailed information quickly to many recipients. Employees can refer back to its written record, while attachments carry documents such as delivery schedules. However, an overloaded inbox can leave an important message unread. A manager also has to wait for a reply before checking understanding. Text messages reach mobile phones quickly and suit short updates, such as a changed appointment time. Customers benefit because they can see the essential information without opening a lengthy document.

4:24Their limited space makes detailed explanations difficult for the business. A complex instruction may need a different method that allows fuller discussion. Social media allows a business to reach many customers quickly at relatively low cost. An online shop can publish a sale announcement that followers share with others. However, public comments can expose customer dissatisfaction to a wide audience. Negative reactions can spread quickly and damage the business’s reputation.

4:49Phone calls, including mobile calls, allow an immediate two-way conversation when the receiver answers. A purchasing manager can clarify a supplier’s delivery problem during the same exchange. However, an ordinary call provides no written record of the agreed details. The business may therefore need a written follow-up when quantities, dates or responsibilities matter. Letters provide a formal written record that the recipient can keep. A business can use one to confirm an offer with detailed terms.

5:16However, printing and postage create costs for the sender. Physical delivery also takes time, so letters are less suitable when the receiver needs an immediate warning. Posters and noticeboards display information where many employees or customers can see it. The business can communicate routine announcements cheaply without contacting each recipient separately. However, employees may overlook a notice they pass every day. The display also provides no direct feedback, so a manager cannot confirm understanding through the notice alone.

Choosing suitable communication methods

5:43Choosing a method starts with the message and its audience. Consider urgency, detail, feedback, a written record, privacy, cost and access. A public announcement suits a broad audience, while personal employment details need a private channel. Access matters because the recipient must be able to use the chosen method when the message arrives. Some situations need a combination, with one method doing the main job. A manager might telephone a supplier urgently and then email the agreed delivery details.

6:12The call provides immediate clarification, while the email preserves the agreement. Each part has a clear purpose linked to the business’s needs. Cedar Components makes car parts and has thirty employees. It has four hundred dollars available for communication, and everyone is currently on site. A faulty machine has been isolated while the manager prepares new safety instructions. Its aim is to ensure every employee understands those instructions before work restarts.

6:36Start by identifying the message’s purpose: safe action requires clear understanding. Everyone is already present, so gathering employees involves little additional expense. Immediate questions matter because the manager must check how employees will apply the instructions. A poster could reinforce the message afterwards, but the initial explanation needs direct interaction. I recommend a face-to-face meeting for Cedar Components. All thirty employees are on site, so the manager can explain the instructions without travel expenditure.

7:03Immediate questions allow uncertainty about restarting work to be resolved before anyone approaches the machine. A poster gives no direct confirmation of understanding. The meeting is therefore the stronger choice for a safe restart. Harbour Rooms provides overnight accommodation and has twelve employees. It has sixty dollars for correspondence and wants to formally confirm an applicant’s employment terms. The applicant has supplied a postal address, and the proposed start date is one month away.

7:27The manager is choosing between a letter and a phone call. I recommend a letter for Harbour Rooms. Its formal written record allows the applicant to check the employment terms before the start date. The month available allows time for postal delivery, and the budget covers a single letter. A phone call allows immediate questions, but leaves the terms without a written record. The letter best supports accurate confirmation of the offer.

7:49Willow Threads sells clothing online and has five employees. Its communication budget is ninety dollars, and customers already follow its social media account. A sale begins tomorrow, and its aim is to increase orders during the event. The owner is choosing between a social media announcement and individual text messages. I recommend a social media announcement for Willow Threads. Its existing followers provide an audience that the business can reach before tomorrow’s sale.

8:12A single post has little direct expense, which suits the ninety-dollar budget. Individual texts require separate customer contact details and offer less space for product information. Social media therefore best supports prompt awareness and additional orders.

Justifying choices in exam answers

8:26These cases demonstrate the judgement expected when you justify a choice. Justify means support a case with evidence or argument. Select one method, connect its benefits to the business’s details, and explain why the strongest alternative is weaker. End with the outcome the business wants to achieve. Paper One Short Answer and Data Response and Paper Two Case Study can test this knowledge through business situations. An explain question might ask why effective communication matters when a supplier changes its delivery schedule.

8:54Explain means set out purposes or reasons, say why and how, supported with relevant evidence. Build a chain from the information received to its effect on operations. The supplier’s update allows the production manager to revise the work schedule. Employees can then complete tasks that use materials already available. This reduces time spent waiting for the delayed delivery. The business makes better use of its employees’ paid time. Keep your answers precise by distinguishing the audience, the method and the outcome.

9:21Classify internal and external exchanges from the participants involved. Treat a reply as evidence that helps the sender check understanding. When recommending a method, connect speed or cost to the circumstances given in the case.

Key communication recap

9:33Communication is the transferring of a message from the sender to the receiver, who understands it. Remember that internal communication is communication between people within the business. For external exchanges, use this definition: external communication is communication between the business and people or organisations outside it. In both settings, successful understanding helps people act appropriately. The sender is the person or organisation sending the message. Recall that a medium is the method used to transfer the message.

10:02At the other end, the receiver is the person or organisation receiving the message. Finally, feedback is the receiver’s response to a message. Effective exchanges help instructions get carried out, coordinate departments, reduce mistakes, improve decisions, motivate employees and support business relationships. Every method has advantages and disadvantages for particular users. Choose by matching its features to the message, audience and intended action. A strong recommendation explains why that match helps this particular business achieve its aim.