How Communication Takes Place in Business (Edexcel IGCSE Business)

Revision Note

Written by: Lisa Eades

Reviewed by: Steve Vorster

Methods of Communication

Communication is the process by which information is transferred from one person/group (sender) to another (receiver)
Internal communication refers to information or messages sent between people inside a business
- E.g. Google uses its own internal social network, called Google+, to share news, updates, and insights with employees across different departments and locations

External communication refers to information or messages sent to people or organisations outside the business
- E.g. Aldi, the German retailer, communicates 'special buy' promotional offers to customers via a weekly newsletter they can collect in store
There are 3 main methods of communication
- Verbal communication through listening
- Non-verbal communication through observation and inference
- Written communication through reading

Diagram: Methods of Communication

Many businesses use various methods of communication at the same time, as different situations and tasks require either verbal, non-verbal or written communication

The Benefits & Limitations of Different Methods of Communication

Method of Communication	Benefits	Limitations
Verbal	Information is transferred quickly leading to higher efficiency Immediate feedback results in two-way communication The message is enforced by seeing the speaker, for example body language could make the message easily understood	It may be difficult to assess if the message had been fully understood by everyone, for example in a large meeting Verbal communication is inappropriate for storing accurate and permanent information for some messages E.g. a verbal warning
Non-verbal	Presenting information in an appealing and attractive way encourages people to look at it They can be used to make a written message clearer by adding a picture or a chart to illustrate the point being made	Feedback is limited with this method so written or verbal feedback would also be required to check understanding of the message Complex charts and graphs might be difficult for some people to understand
Written	There is hard evidence of the message which can be referred to and help solve disputes in the future over the content of the message It is needed when detailed information is transferred from the sender to the receiver The written message can be copied and sent to many people	Direct feedback is not always possible, unless electronic communication is used The language used might be difficult to understand or the message may be too long causing disinterest There is no opportunity for body language to be used to enforce the message

The use of IT in Communication

Digital communication involves sending and receiving information electronically
- Businesses have access to a range of technologies which can help improve communications flows using information technology (IT)
Examples of the use of IT include video conferencingemail, instant messaging and chat applications

The Benefits & Drawbacks of using IT in Communication

Method of Communication	Benefits	Drawback
Video conferencing	Video calls allow people in different locations to connect Reduction in travel costs as fewer employees may need to travel to various locations for meetings Meetings can be set up relatively quickly	Unreliable internet connections or audio/video problems can hinder effective communication Calls between different time zones can be difficult to organise for international firms The equipment can be expensive
Email	The message can be printed if a hard copy is needed Written messages can be sent instantly to others, and files can be shared as attachments Cheap and easy method of communication	The receiver needs an internet connection to receive the message itself Spam mail is a big problem for businesses, meaning messages may be blocked or filtered, preventing the receiver from reading it Email attachments can contain viruses, which can be costly to the business
Instant messaging & chat applications	Instant messaging (WhatsApp, Slack) enables fast and real-time communication, making it ideal for brief exchanges or urgent matters	Text-based communication lacks non-verbal cues, increasing the chances of misunderstandings or miscommunication

Examiner Tips and Tricks

In the exam, you may be asked to evaluate the use of communication methods using the case study information provided, as well as your own knowledge of business. Make sure that you know the benefits and limitations of verbal, non-verbal and written communication, as well as the use of IT in communication

Last updated: 11 October 2024

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