NORTH SOUTH UNIVERSITY

Report On

Business Communication Process of Li & Fung

Course: Bus251
Section: 04
Submitted to

Rahnuma Sanjana
Department of Management
North South University

Submitted By:
Name ID

Abdullah Are Rafi 1610519030

Jarin Tasnim Tuba 1610878030

Md. Hasibul Hassan 1610762030

Md. Borhan Uddin 1612706030

Md. Rakib Raihan 1421549030

 Report on Business Communication Process of Li & Fung

Letter of Transmittal

4th December, 2018

Mrs. Rahnuma Sanjana

Lecturer

North South University

Subject: Report submission on Business Communication Process of Li & Fung.

Dear Madam,

In accordance to your advice we have prepared our report on the business communication
process and procedures of Li & Fung. Throughout this report we tried to follow all your
guidelines. We have investigated the business communication procedures of Li & Fung.

We hope this report will meet your requirements.

Sincerely yours,

Abdullah Are Rafi

Jarin Tasnim Tuba

Md. Hasibul Hassan

Md. Borhan Uddin

Md. Rakib Raihan

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 Report on Business Communication Process of Li & Fung

Executive Summary

This report is about Li & Fung’s business communication. This report is made based on an

interview and the available information that can be found on websites. Moreover, few things

were included from websites, those websites are mentioned in the references section.

Firstly, we have given a brief introduction of Li & Fung. Then a general overview of the

company. In the areas of research part, we mentioned the areas that we have worked on with the

purpose statement for the report. We have also mentioned the sources that we used to make this

report. Afterwards, we have described the communication mediums Li & Fung uses to

communicate with respective parties. Then we offered an analysis based on the information we

have managed through the interview and secondary source. Finally, we have suggested a few

recommendations so that Li & Fung can improve their business communication.

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 Report on Business Communication Process of Li & Fung

Contents
Executive Summary.........................................................................................................................3

Introduction......................................................................................................................................5

Organizational Overview.................................................................................................................6

Areas of Research............................................................................................................................7

Research Methodology....................................................................................................................8

Communication with Stakeholders..................................................................................................8

Internal Stakeholder.........................................................................................................................9

External Stakeholder......................................................................................................................10

Analysis.........................................................................................................................................11

Recommendation...........................................................................................................................13

Conclusion.....................................................................................................................................14

References......................................................................................................................................15

Appendix........................................................................................................................................16

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 Report on Business Communication Process of Li & Fung

Introduction
Communication is a vital part of our life as we use it in our daily lives continuously.
Communication refers to the exchanging of information by speaking, writing, or using some of
other medium. Business communication is the sharing of information between people within and
outside the organization that is performed for the commercial benefit of the organization.
Without effective communication and good understanding organization cannot operate their
operation perfectly and easily. Organizations and managers that openly share information and
encourage communication in an effective way have a higher rate of employee’s job satisfaction.
So a good business communication is key to success.

Business communication involves constant flow of information. Feedback is one of the

important part of business communication. Organizations these days are very large and involve
large number of people. There are various levels of hierarchy in an organization. Greater the
number of levels, the more difficult is the job of managing the organization. Communication
here plays a very important role in process of directing and controlling the people in the
organization.

To run a business organization a company should know about their business communication
process and procedures properly. A lack of communication can cause serious efficiency
problems and at the end of the day will harm the company and its shareholders or customers.
Therefore here we tried to find out the business communication process and procedures of Li &
Fung. We also found how they communicate with their internal and external stakeholders. We
collected information through primary and secondary sources. Our main source data collection is
interview. Li & Fung mainly use Email, Intranet, Telephone, Video conferencing and meeting
for their communication. There are some flaws of communication process. We tried to find out
those flaws or the barrier which affect their communication process. In the end there are some
suggestions or recommendations by which they can improve their communication process in a
better way.

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 Report on Business Communication Process of Li & Fung

Organizational Overview

Li & Fung started their business in Bangladesh in 1995. It is working like a middleman. They get
order from Spain, USA, and Russia and give the order to the countries where labor and raw
material price are cheap. In Asia they have their subsidiaries in Bangladesh, Pakistan, India, Sri-
Lanka and China. When one of its clients’ needs a product, Li & Fung does much more than just
find the lowest-price source. The company breaks apart the manufacturing process to find the
best supplier for each stage of production. For example, if a client orders a polo shirt, Li & Fung
might buy American cotton, have it knitted and dyed in China, and send it to Bangladesh for
sewing. The company's 65 sourcing offices in 38 countries give it the global connections it needs
to pull off this "borderless" manufacturing process.

This company initial startup was 1906 at china, than they are initiate globally and internationally
from 112 years, they operate word wide supply chain management for brands and retailers. Li &
Fung was founded against a backdrop of great change in China. Fung Pak-liu, an English
teacher, and Li To-Ming, a merchant, established Li & Fung in 1906 as one of the first
companies financed solely by Chinese capital to export to the West. This two-man startup at first
centered trading porcelain and silk from China before differentiating into bamboo and rattan
product, jade and different painstaking work. With the war in China escalating, Fung Hon-chu,
granddad of our ebb and flow CEO, moved from Guangzhou to Hong Kong to set up Li and
Fung's first abroad branch, a little 12-man group in Central.

It was formulated in Hong Kong; however it is a global trading group. It is involved in trading,
distribution and logistics. They have many other businesses as well, such as garments which
account for approximately two thirds of their business which also includes hard goods such as
gifts, handicrafts, toys, sports goods, fashion goods, home goods etc. Under their three
departments, they also provide raw materials, product design, planning of products and
management sources as well as export documentation and quality assurance to countries which
are shipping products from LI Fung. Li Fung started off as an export based company relying
completely on trade and evolved into a global firm dealing with supply chain.

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Currently Li and Fung has the most broad worldwide production network. With about 17,000
individuals in excess of 230 workplaces and circulation focuses crosswise over 40 distinct
markets, They utilize their broad worldwide achieve and innovation to encourage brands and
retailers response rapidly to evolving consumer and production trends. Li & Fung got off to a
slow start on the 2002-04 three-year plan due to an economic slowdown. The company was
about half a year behind on its goal but was still optimistic that it would once again double
continuing operating profits over the three-year period. Such feats were more difficult now that
Li & Fung had grown to be a relatively large company. Yet whether or not the company was able
to sustain the rapid growth of the 1990s, it had shown it had the flexibility to continue playing a
key role in the global market of the 21st century.

Areas of Research
As we have worked on Li & Fung, we tried to look for various areas of Li & Fung. We gathered
information on how they do their business communication with respective parties. It is accepted
that business communication is a very important factor for the success of a business. If we
consider information is the main asset, then communicating perfectly also is very important so
that business can achieve its objects.

Purpose Statement: To look into the Li & Fung company to evaluate their overall business
communication process and find problems (both external and internal), also to figure out the
communication barriers that might hamper the smooth running of business and provide
recommendation for further improvement.

Context: The purpose statement of this report is based on Organizational Context. It is in

organizational context because organizational context shapes the behavior of the representatives
of a firm to behave in certain ways. Li & Fung is one of the most prominent buying house
companies in Bangladesh, they have built a simple network for communication in order to
maintain a healthy and professional relationship with their customers and suppliers. They have
some both internal and external communication barriers while communicating with their
customers and employees. These communication barriers can hamper the overall smooth running
of business processes of the company. That is why it’s important to know which company we are
dealing with, and what are the problems other companies from same industry are facing in
communication process to solve the problems of this company. So, through our research about

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business we will try to find out the barriers of the communication process and also figure out
potential solutions while providing proper recommendation for Li & Fung.

Research Methodology
We have collected information from both primary and secondary sources.

Primary Research

For our primary research we took the interview of Sazzad jakariya, general manager, Uttara
Branch, Li & Fung Ltd. We asked them a series of questions about the Bank such as,
communication with their stakeholders like customers, employees etc. We also asked them how
their employees communicate with each other and communicate with their customers. They also
informed us about the communication barrier of the company and their efforts to improve their
current situation.

Secondary Research

To collect our information about Li & Fung. We mainly looked through their website to collect
the information about the organization’s origin, their communication with their stakeholders and
various communication barriers they are facing in day to day activity.

Communication with Stakeholders

Stakeholders are the people and organization those who have direct and indirect connection to
the company. They play important role in the business operation. It is important to communicate
with stakeholders. Stakeholders include employees, suppliers, labors, customers, business
partners, investors, shareholders, local community, labor union, government authorities and
regulators. Their actions and attitude have an impact on the company. Effective communication
with stakeholders ensures that they receive the relevant information, which is important to build
positive attitude to the company.

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Importance of Communication

Communication is the way to link people in an organization to achieve a common purpose.

Without communication group activity is not possible because coordination and changes would
not be effected. Importance of communication in interpersonal relationships have also been
realized by the sociologists and psychologists. Li & Fung gives more importance to
communication because they emphasize on attention, brief and clarity of communication. They
believe retaining customer is only possible through proper communication.

Types of business communication: Business Communication is mainly two types i) Internal

operational and ii) External operational

Stakeholders of Li & Fung includes employees, managers, owners and board of directors who
are the internal stakeholders and the external stakeholders are customers, creditors, government,
society and regulators. Different stakeholders have different interests, attitudes and priorities.
Effective communication ensures that they receive information that is relevant to their needs and
builds positive attitudes towards the company.

Li & Fung formal communication tools are e-mails, mobile phone, intranet and Informal
communication consists mainly of personal communications which exists outside the formal
communication structure such as talking with a colleague in free time on different what’s app or
messenger groups. Sometimes Grapevine also exists which is informal in nature and outside the
control of management.

Internal Stakeholder
Internal communication in Li & Fung is important because its establish goals of the organization,
its develop plans for achievement of these goals. It organizes human and other resources
effectively and efficiently. Its select, develop, and appraise members of the organization and
control all activities.

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Channels of internal communication

 Formal letter: When a question of privacy and importance occurs, Li & Fung
communicates with their employees through letters and applications. For example, they
send letter to their employees when any employee is get promoted or transferred.
 Telecommunication: Li & Fung permits employee to telecommunicate that provides
them to communicate within a very short time.
 E-mail: It enables users to create, send, and read written message on computer.
 Conference and Meetings: Conference and meetings are also held for internal
communication to discuss new trends and opportunities.

External Stakeholder
Communication outside the organization is considered as external communication. It means
giving and receiving information with external audiences. Different kind of external audience
includes customers, regulators, public groups, industry partners and business partners. External
communication is equally important as internal communication to link a bridge between external
parties. It is must to maintain a relationship with external parties. Moreover, it helps to achieve
organizational goal and customer satisfaction.

External communication in Li & Fung: In Li & Fung external communication helps the
managers to become aware of the needs or demand of the customers, the availability of suppliers,
the claim of stockholders and the regulations of government.

Channels of external communication

External channels includes Telephone, Email, website and Video conferencing. Li & Fung uses
different channels for different external parties.

 Communication with client: Clients are most important for Li & Fung. They get most
order from Spain, Russia and USA. For this group of customer’s they use face to face
conversation or video conferencing. Sales executives of Li & Fung go directly to the
clients and listen their requirements. Also their clients come to Bangladesh and talk about
their requirements. After that clients send an official email with order memo to Li & Fu-
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ng. When the order is preparing Li’s sales executive keep clients updating about the order
through video conferencing or email.
 Communication with suppliers: Li & Fung gives the order to Bangladeshi organizations
what they get from USA, Spain and Russia. They communicate with them through
telecommunication medium, email or arrange face to face meeting. Sometime they also
need to import raw materials from china. They import Thread, Fabric pins, cotton etc.
from china. They communicate with them face to face or video conferencing or website.
They send a formal email to their respective suppliers with the detail requirement or they
just go to their supplier website and buy their raw materials.

Analysis
Communication Issues That Affect Smooth Running of the Business

 Size and Complexity: As business becomes larger the communication process gets
complicated. Since, Li & Fung is a big company they must communicate with many
parties including foreign stakeholders. Hence this could be one of the factors that might
affect their business. However, according to the interviewees Li & Fung has been able to
manage their communication process.
 Geographic Dispersion: Li & Fung has suppliers and clients who lives outside of the
country. Since the employees are dispersed it is natural to have communication gaps with
each other.
 Language Barriers: Language that describes what we would want to express and
communicate to each other. In today’s global scenario, the greatest compliment we can
pay to foreign customers is by speaking and effectively communicating to them in their
local language. For that we need to understand the native language of those foreign
customers. But it’s hard to communicate with them in their native language. As our main
clients are from Spain and Russia, so sometimes they can’t properly explain their needs.
 Cultural Barriers: The world is made up of diverse cultures. A cultural barrier arises
when two co-workers in an organization belong to different religions, states or countries.
Some employees may not have a full range of vocabulary in the office's primary
language, causing misunderstandings. Cultural values also impact workplace

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communication. An employee may come from village and isn’t comfortable with email
or computer rather prefers to use memos or paper based communication system.

Factors that affect communication issues in Li & Fung

From the information that we have gathered from the interview, we have figured out some
communication problems within or outside the organization of Li & Fung.

 Hierarchical barriers: Power distance in Bangladesh is highly visible and people in the
management body always try to maintain a distance from the lower level employees
creates hierarchical barriers to communicate with the employees within the business. In
the case of Li & Fung only the department managers get individual cabin as he/she is in
the charge of respective department .Because of having hierarchical barriers employees
are not always allowed to meet the manager. So, in most of the cases they have to face
some trouble in order to consult about their official tasks.
 Inappropriate use of direct method: Li & Fung use direct method for refuse request
which should not be used. To reply a refused request an organization should use indirect
method. It helps to maintain the good relation with customer.
 Inappropriate use of indirect method: Li & Fung use indirect method to reply an
information query which should not be use. Whenever any customer asks any query via
email, they replay those emails stating their company information, product offerings and
all. Organization should use direct method to reply an information query. It helps to
satisfy the person early and it might convert an information seeking person to a loyal
customer.
 No Feedback Taken from the Employees: Li & Fung follows centralized method for
decision making process. If an organization follows centralized system then it missed
information from subordinates which is important for organization’s decision making
process.
 Dependent on Email: Every kind of communication at Li & Fung is based on email.
Communication with suppliers, retailers, consumers, internal in every context of
communication they use email as a main tool. For that personal relationship is getting
hampered. If people deal face to face then there is a very high chance for good

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relationship as well as it helps to clarify problems instantly and use of email for
confidential documents is very risky.

Recommendation
 Use Back Translator: In our analysis we saw that Li & Fung’s main client is from
Spain, Russia and USA. Out of these only one country’s native language is English. They
get their most order from Spain. So, they should use a back translator so that none of their
communication pieces get lost or misinterpreted during their meetings.
 Using indirect method for refused request: From our interview, we came to know that
of Li & Fung have many orders they directly refuses the client who want to give them
new orders. The company should use indirect method to refuse requests since a bad-news
message usually use indirect order. This will help the company to present the bad news
positively.
 Using direct method while replying information queries: We got to know from our
interviewer that whenever any customer asks any query via email, they replay those
emails stating their company information, product offerings and all. We recommend them
to avoid these type of replies and use direct replies which will starts with the most
important point and then moves into additional supporting information.
 Dedicated hotline number: They can introduce dedicated hotline number for the
convenience of their customers who can check the status of their orders and also ask any
product related queries.
 Including the employees in the decision making process: All the employees should
have a say in the decision making process of the company. This will motivate them to
work more effectively.
 Offering training on how to write emails: They can train the employees of customer
relationship for writing appropriate emails for everyone.
 Introducing Video Conferencing: They already have intranet. They can use that for
video conferencing within the company. Using video conferencing whenever there is a
need arise to consult with the top management, any employee can communicate to their
nearest superior instantly and conveniently.

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Conclusion

After the interview with Li & Fung Company we analyzed the whole communication process of
the company and we have come to a conclusion that the company is doing a decent job
communicating with its stakeholders. We have given them some recommendations hoping that
adopting these practices will make their relationship with the stakeholders’ better which will help
them to earn more profits in the long term. As the right communication effect can help build
goodwill for the company and this goodwill will also maintain a favorable image and
relationship with the stakeholders. This will make the dealings with people more friendly,
enjoyable and courteous. We believe that proper business communication is a major part of good
business etiquette.

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References
1. Li & Fung. (2018). Our history - Li & Fung. [online] Available at: https://www.lifung.com/about-lf/our-
purpose/our-history/?
fbclid=IwAR0y8NDMlCWyat_58QqB6MvaiWw4JI2NQetHcegGIUqef3nY2WJL1tfh7Bo [Accessed 3
Dec. 2018].
2. Referenceforbusiness.com. (2018). Li & Fung Limited - Company Profile, Information, Business
Description, History, Background Information on Li & Fung Limited. [online] Available at:
https://www.referenceforbusiness.com/history2/82/Li-Fung-Limited.html [Accessed 3 Dec. 2018].

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Appendix
We took an interview of Sazzad jakariya who is Genral Manager of Li & Fung Ltd., Uttara
Branch.

Name: Sazzad jakariya

Address: Giant Business Tower, Plot No. - 3 & 3A, Dhaka Mymensingh Road, Sector # 3, Uttara, Dhaka
1230

Contract no: 01675702211

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