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Understanding Business

Communicating in Organizations

An organization is a group of people working together to achieve common goals. Communication is vital to
that process. Understanding how communication works in business and how to communicate competently
within an organization can help you participate more effectively in every aspect of business. Competent
writing and speaking skills will help you get hired, perform well, and earn promotions.

The Components of Communication

Communication is the process of sending and receiving messages through spoken or written words or
through nonverbal means.

The Stimulus
The stimulus—internal or external—is an event that creates within an individual the need to communicate.
You respond to the stimulus by formulating a message, either a verbal message (written or spoken words), a
nonverbal message (non-written and non-spoken signals), or some combination of the two.

The Filter
The filter consists of a person's unique impression of reality based on that person's experiences, culture,
emotions at the moment, personality, knowledge, socioeconomic status, and other variables. The brain
receives the stimulus that is the source of the communication, interprets the stimulus, and derives meaning
from it in determining what response—if any—is necessary.

The Message
The message consists of the verbal and nonverbal symbols that represent information you want to transmit.
The extent to which your communication achieves its goal depends directly on how you construct your
message to suit your audience.

The Medium
The medium is the form the message takes. The medium can be oral (for example, a phone call), written (a
letter), or nonverbal (a smile).

The Destination
The destination is the point at which the transmitted message enters the sensory environment of the receiver.
At this point, control passes from the sender to the receiver, and the transmitted message becomes the source,
or stimulus, for the next communication. A response or reaction to a message provides feedback.

The Dynamic Nature of Communication

Communication is a dynamic process. It does not always proceed orderly from one stage to the next, and it is
not always possible to separate senders and receivers.

Urban Systems: A Continuing Case Study

Urban Systems is a fictitious but realistic company that appears throughout the text, mostly within the end-
of-chapter continuing case. By following the different episodes in the story of Urban Systems, students have
an opportunity to experience various types business communication challenges in concrete terms.

A CD-ROM featuring Urban Systems is also shrink-wrapped with each student text, allowing students to
“virtually experience” the Urban Systems workplace. Each module of the simulation CD is related to each
chapter in the textbook. Within each module, students take on the roles of various Urban System employees
who have a multitude of daily tasks as well as a specific problem to solve or task to complete. At the
completion of each module, students create a business communication product, which can be handed in to the
instructor for grading.

Verbal Communication

Verbal messages are made up of words and include both oral and written communication.

Oral Communication
1. Oral communication is one of the most common functions in business.
2. Oral communication is different from written communication in that you have more ways to get a
message across to others.
3. For oral communication to be effective, a second communication skill—listening—is also required.
Nearly 60% of all communication problems in business are caused by poor listening.

Written Communication
1. Writing is often more difficult than speaking because you have to get your message right the first time;
you do not have the advantage of immediate feedback and nonverbal clues.
2. Writing is of critical importance to the modern organization because it serves as the major source of
documentation. The written communication may take the form of a memorandum (a message sent to
someone within the same organization), email (a message transmitted electronically over a computer
network most often connected by cable, telephone lines, or satellites), a letter (a message sent to
someone outside the organization), a report (an orderly and objective presentation of information that
assists in decision making or problem solving), or any other message that is put into written form.
3. Efficient reading skill is necessary when a written communication channel is used.
4. Modern technology has made information overload an unfortunate by-product of our times.

Directions of Communication

Successful businesses use formal and informal communication networks. Four types of communication make
up the formal communication network.

The Formal Communication Network

1. Downward communication. In most organizations the largest number of vertical communications move
downward, from someone of higher authority to someone of lower authority. Information regarding job
performance, policies and procedures, day-to-day operations, and other organizational concerns is
2. Upward communication. Upward communication provides higher management with feedback and the
information needed for decision making. It cultivates employee loyalty by giving employees a chance to
be heard, to air their grievances, and to offer suggestions.
3. Horizontal communication. Horizontal communication is the flow of information among peers within the
same work unit. It helps individuals coordinate work assignments, share information on plans and
activities, negotiate differences, and develop interpersonal support, thereby creating a more cohesive
work unit.
4. Cross-channel communication. Cross-channel communication is the exchange of information among
employees in different work units who are neither subordinate nor superior to one another.

The Informal Communication Network

The grapevine is the informal communication network, the nonofficial channels within the organization
through which information is transmitted. Employees often say the grapevine is their most frequent source of
information on company plans and performance. About 80% of the information passed along the grapevine is
business related, and 75% to 95% of it is accurate. The grapevine exists at all levels in organizations, and
information moves rapidly along the grapevine. The grapevine is most active when change is taking place
and when your need to know or level of fear is highest. The grapevine is a vital part of every organization.

Barriers to Communication

Barriers may be verbal (related to what people write or say) or nonverbal (related to how people act).

Verbal Barriers
1. Inadequate knowledge or vocabulary. You must know enough about a topic to know what to say, and you
must know something about your audience.
2. Differences in interpretation. Sometimes senders and receivers attribute different meanings to the same
word or attribute the same meaning to different words. Every word has both a denotative meaning
(literal, dictionary meaning) and a connotative meaning (subjective, emotional meaning that you attach
to a word). Most of the interpretation problems occur because of the personal reactions engendered by the
connotative meaning of a word.
3. Language differences. Ideally, managers would know the language of each culture with which they deal;
however, they frequently depend on interpreters to translate from other languages. To ensure that the
intended meaning is not lost during translation of important documents, the documents should first be
translated into the second language and then translated back into English.
4. Inappropriate use of expressions. Expressions are groups of words that have intended meanings that are
different from their literal interpretations. Slang, jargon, and euphemisms all play an important role in
business communication when they are used with appropriate people in appropriate contexts.
5. Overabstraction and ambiguity. Overly abstract or ambiguous wording obscures meaning.
6. Polarization. By dividing every situation into two opposite, distinct poles, people make no allowance for
a middle ground.

Nonverbal Barriers
1. Inappropriate or conflicting signals. When verbal and nonverbal signals conflict, the receiver tends to put
more faith in the nonverbal signals because nonverbal messages are more difficult to manipulate than
verbal ones. Communication competence requires that you communicate nonverbal messages that are
consistent with your verbal messages and are appropriate for the context.
2. Differences in perception. People of different ages, socioeconomic backgrounds, cultures, and so forth
often form very different perceptions.
3. Inappropriate emotions. Too much emotional involvement can be an obstacle to communication.
Likewise, prejudice, stereotyping, and boredom tend to create a blocked mind that is closed to ideas that
are contrary to one's prevailing belief.
4. Distractions. Any environmental or competing element that restricts your ability to concentrate on the
communication task hinders effective communication. Such distractions are called noise

Ethics and Communication

Each of us has a personal code of ethics that goes beyond the legal rules governing communication.
However, communicators must understand the legal implications of their messages.

Any false and malicious statement that is communicated to others and that injures a person's good name or
reputation may constitute defamation. Oral defamation is called slander; defamation in a permanent form
(in writing, on videotape) is called libel.

Invasion of Privacy
Any unreasonable intrusion into the private life of another person or denial of a person's right to be left alone
may constitute an invasion of privacy. Of primary concern today are the vast amounts of employee and
customer information being maintained in corporate data banks.

Fraud and Misrepresentation
A deliberate misrepresentation of the truth for the purpose of inducing someone to give up something of
value is called fraud. Fraud can occur when a party makes a false statement or deliberately conceals
information that he or she is required to reveal. A misrepresentation is a false statement that is made
innocently, with no intent to deceive the other party. A contract can be rescinded if misrepresentation is
proved. If fraud is proved, the contract can be rescinded, and the offended party may collect monetary

Other Ethical Considerations

When you have doubts about the ethical propriety of your writing, ask yourself these questions:
· Is this message true?
· Does it exaggerate?
· Does it withhold or obscure information that should be included?
· Does it promise something that cannot be delivered?
· Does it betray a confidence?
· Does it play unduly on the fears of the reader?
· Does it reflect the wishes of the organization?

Introducing the 3Ps (Problem, Process, Product) Model

Beginning with this chapter, every chapter concludes with a 3Ps model. These short case studies of typical
communication assignments include the Problem, the Process, and the Product. The problem defines the
situation and discusses the need for a particular communication task. The process is a series of questions that
provides step-by-step guidance for accomplishing the specific communication task. Finally, the product is the
key—the finished document. The 3Ps model provides a method by which students can see the process of
writing, not just the results.


The following notes can be used for supplemental lectures or class discussions about the topics covered in
Chapter 1.

The Importance of Good Communication Skills

1. Writing ability is used to evaluate prospective employees for hiring.

2. Writing ability is used to evaluate employees for promotions. In fact, writing skill becomes more
important as a person advances in the field.

3. Careers can be blocked because of poor writing skills.

4. Verbal and listening skills are essential in dealing effectively with people.

5. Good communication skills help coordinate activities within an organization.

6. Good communications help increase job satisfaction and productivity.

7. Effective written communications provide official, permanent records for a business and reflect the pride
that employees take in themselves and their firm.

8. Good communications help project a positive company image.

Legal Considerations
1. Legal responsibility for letters. If an employee is writing about company business and the company will
assume legal responsibility for the correspondence, the company name should be typed in all capitals a
double space below the complimentary close. The individual's name and title are typed a quadruple space
below the company name. Using a company letterhead makes no difference in liability; however, many
companies assume responsibility for company correspondence even though the company name is not typed
below the complimentary close.

2. Recommendation letters. Many people refuse to write letters of recommendation because of potential
lawsuits. When writing recommendation letters, the writer should check the accuracy of all information
provided. The information should be directed to the individual who requested it (for a legitimate purpose),
and the recommendation should indicate that the information is being provided because it was requested.
(Many companies today verify employment dates and positions but refuse to provide additional information
about former employees.)

3. Employee evaluations. Because of the difficulty of terminating employees, most companies have procedures
whereby employees are evaluated periodically by their superiors. The usual procedure is to discuss the
evaluation with the employee and have the employee sign it. This kind of careful documentation helps the
employee develop goals to improve performance. At the same time, it gives the employer the documenta-
tion it needs for any legal actions that might result from terminating the employee.

4. Copyrighted material. A person must give credit for direct quotations and ideas borrowed from copyrighted
material. This concept is extremely important to students, and they should understand the implications of
documenting what they write. Additionally, students should be aware of laws regarding copying of
computer software.

5. Coercion. It is illegal to harass, oppress, abuse, or intentionally cause mental distress to others. Students
should understand the significance of the use of coercion in the process of collecting debts, as well as the
implications of sexual harassment in the workplace and other forms of coercion.

Class Discussion

1. The instructor can have students discuss their reactions to the following image or situation. (Remind
students that the way we stereotype things has a lot to do with how we read nonverbal messages.)


A wide-eyed baby Dishonesty
Narrow, beady eyes Temper
Bright red hair Stupidity, looseness
Bleached blond woman Laziness, poor self-image
Extremely overweight person Gang member, skinhead
Black leather jacket, crew cut Nerd
Polyester leisure suit Discomfort
Being seated on a crowded airplane between
two people you don't know Nervousness
Loud rock music in a dentist's office Impatience
A church service that lasts longer than an hour

2. The instructor can discuss the impact that words carrying positive connotations have on business writing.
(Words that carry positive connotations help create a positive image in business writing.)

3. Abstracting is the process of focusing on some details and omitting others. Discuss why abstracting is
necessary when writing a résumé. (A job applicant must focus on those aspects of education, experience,

and personal qualifications that fit the job's requirements. Information that is not relevant must be omitted.)