Chongqing University of Science and Technology

《International Trade Communication》

Title：FINAL PAPER INTERNATIONAL TRADE COMMUNICATION

Name; MUNTASIR IBNE AMIN ID;2018490146

College ： CHONGQING UNIVERSITY OF SCIENCE AND

TECNOLOGY

Class： INTERNATIONAL TRADE AND COMMUNICATION

Date： 29/12/21

Achievements (percentage)：

Teacher (signature)：
Content and requirements: discuss the cultural dissimilarities (values, verbal and nonverbal
communication, etiquette, customs, negotiation style and so on. ) that may influence trade
between China and your country and ways to overcome them.
Rating criteria：
evaluation standards
Goal Percentage
Rating Actual
Content score grade
interval score
Excellence:
comprehensive 72-80
analysis of elements
Goal 1 Good: Analysis of four
（Familiarity with Values, written elements
64-71
relevant elements communication Medium: Analysis of
80% 56-63
affecting , etiquette, 80 three elements
international trade customs,
communication） Eligibility: Analysis of
negotiating 48-55
two elements
style
Unqualified: The
content of the analysis
0-47
has nothing to do with
the elements
Excellent: Exposition
9-10
is highly targeted
Good: The discussion
Understanding of 8
has strong pertinence
Goal 2(understand relevant elements
Medium: General
the theory of affecting
10% 10 discussion of 7
cross-cultural international
pertinence
communication) trade
communication Eligibility: poor
6
pertinence
Unqualified: Lack of
0-5
pertinence
Excellent: strong
9-10
feasibility
Good: Strong
8
feasibility
Goal 3(Improve Initiatives to
Medium: general
international trade address 7
10% 10 feasibility
communication communication
Eligibility: Poor
skills) issues 6
feasibility of initiatives
Unqualified: lack of
corresponding 0-5
initiatives
Total score
 There are four major cost components in international trade, known as the “Four is”:
 Transaction costs. The costs related to the economic exchange behind trade. ...
 Tariff and non-tariff costs. Levies imposed by governments on a realized trade flow. ...
 Transport costs. ...
 Time costs.

1. Transaction costs. The costs related to the economic exchange behind trade. ...

Transaction costs are costs incurred that don’t accrue to any participant of the transaction. They are
sunk costs resulting from economic trade in a market. In economics, the theory of transaction costs is
based on the assumption that people are influenced by competitive self-interest.

At the highest level, only markets exist, and people in the economy are free to enter into contractual
agreements with each other. Under such a viewpoint, the company exerts full control over the
contract, which led economists to believe that contracts would be violated by different parties when
they find an opportunity to do so. The aim of the transaction cost was to limit the authority of
contractual relationships.

What Affects Transaction Costs?

Transaction costs in economies aim to clarify why some markets are able to accommodate many
organization while others are dominated only by a few, which are known as hierarchies. Oliver E.
Williamson, who won the Noble prize for Economic Science in 2009, made an argument for the
transformation of economies based on small transactions into one made of large hierarchies that
transact among themselves.

In today’s economy, Organaized developement is dominated by hierarchies as it is a more efficient

way to build relationships. Transaction cost economies consist of four elements:

1. There is a lot of uncertainty and unpredictability in the world.

2. With bargaining and asset specificity, organizations that enter into transactions find it
expensive to leave them.
3. Individuals possess limited rationality, meaning they obtain and process limited information,
and hence, have fewer options to choose from. Economic transactions are not based on pure
rationality but on bounded rationality. Bounded rationality is a form of rationality where a
 person’s decision-making and rationality is limited by the amount of information available to
them and the finite amount of time they have to make a decision.
4. The inherent opportunistic behavior of individuals in an economy makes it harder for
contractual agreements to be enforced after a long period of time.

The four factors above collectively make it difficult to enter into contractual agreements at low costs,
which led to the creation of transaction costs in the marketplace. Transaction cost economics argues
that large firms maintain substituted contractual relationships with authoritative relationships.
Entrepreneurs of large hierarchical organizations don’t need contractual agreements because they use
organizational policies such as coercion, monitoring, and incentives to maintain control.

Types of Transaction Costs

The three types of transaction costs in real markets are:

1. Search and information costs

These are the costs associated with looking for relevant information and meeting with agents with
whom the transaction will take place. The stock exchange is one such example, as they bring the
buyers and sellers of financial assets together. The stockbroker’s fee is a type of information
transaction cost.

2. Bargaining costs

These are the costs related to coming to an agreement that is agreeable to the parties involved in
drawing up a contract. Bargaining costs can either be very cheap, such as buying a newspaper, or can
be very expensive, such as trading a basketball player from one team to another.

3. Policing and enforcement costs

These are the costs associated with making sure that the parties in the contract keep their word and
do not default on the terms of the contract. In the real world, people often deviate from the contract,
and thus, enforcement costs are incurred while governing contracts. LAWYER FEES are an example
of such a cost.
 

Transaction Cost Economics (TCE)

Economists Ronald Coase and Oliver Williamson are credited for introducing and popularizing the
concept of Transaction Cost Economics (TCE). The TCE theory explains the need for companies in a
market. If markets operated in a perfect world, companies would not be needed, as market forces
would provide the coordination and incentives needed for production activities.

However, in a real market, companies exist with hierarchies and exercise authority that allocates
resources efficiently. Markets, on the other hand, use their bargaining power to allocate resources.
The TCE theory states that a hierarchy can allocate resources more effectively, or efficiently, than a
market due to imperfect information and bounded rationality.

2. Tariff and non-tariff costs. Levies imposed by governments on a realized trade flow. ...

Tariff and non-tariff costs. Levies imposed by governments on a realized trade flow. They can involve a direct
monetary cost according to the product being traded (e.g. agricultural goods, finished goods, petroleum, etc.) or
standards to be abided to for a product to be allowed entry into a foreign market. A variety of multilateral and
bilateral arrangements have reduced tariffs, and internationally recognized standards (e.g. ISO) have marginalized
non-tariffs barriers.

 Transport costs. The full costs of shipping goods from the point of production to the point of
consumption. Containerization, intermodal transportation, and economies of scale have
reduced transport costs significantly.

 Time costs. The delays related to the lag between an order and the moment it is received by
the purchaser, which is often referred to as inventory in transit. Long-distance international
trade is often associated with time delays that can be compounded by custom inspection
delays. Supply chain management strategies are able to mitigate effectively time constraints,
namely through the concepts such as just-in-time distribution supported by a regular
frequency of deliveries.

Each of the costs has an exogenous (between countries) and endogenous dimension (within
countries):

 Separation factors, such as distance, transportation costs, and travel time, are imposing a
friction to trade imposed by geography and the structure of international transportation
networks. Transportation infrastructure, namely ports, can help mitigate these seperation
 factors. Countries that are part of the same trade agreement usually have lower separation
factors than countries within a similar distance, but outside the trade agreement.
 Country-specific factors, such as customs procedures are dominantly under the countrol of
the concerned nation and can impact trade negatively if tarrifs are high and restrictions are
imposed on specific goods. The national transportation system, particularly its main gateways
and corridors, has an important influence on the performance of international trade flows as it
involves the fundamental “first and last mile leg” in a supply chain…

 3. Transport costs. ...

Transport costs are one of the major components of trade costs along with tariffs, non-tariff measures
and distribution costs. The cost of transportation in international trade can be defined as all shipping
expenses of internationally traded good from origin point to destination point.
transport systems face requirements to increase their capacity and to reduce the costs of mobility. All users (e.g.
individuals, corporations, institutions, governments, etc.) must negotiate or bid for the mobility of passengers and
freight because supplies, distribution systems, tariffs, salaries, locations, marketing techniques as well as fuel costs
are constantly changing. There are also costs involved in gathering information, negotiating, and enforcing
contracts and transactions, often referred to as the cost of doing business. Trade also involves transaction costs
that all agents attempt to reduce since transaction costs account for a growing share of the resources consumed
by the economy.

Frequently, corporations and individuals must decide how to route passengers or freight through the
transport system. For passengers, this choice has been considerably expanded in the context of rising
incomes and the availability of modes. For freight, the production of light and high-value consumer
goods, such as electronics, and less bulky production techniques have expanded the locational choice
of production and distribution. It is not uncommon for transport costs to account for 10% of the
total cost of a product. This share also roughly applies to personal mobility, where households
spend about 10% of their income on transportation, including automobile ownership, which has
a complex cost structure. Thus, the choice of a transportation mode to route passengers and freight
between origins and destinations becomes important and depends on several factors such as the
nature of the goods, the available infrastructures, origins and destinations, technology, and their
respective distances. Jointly, they define transportation costs.

Transport costs are the costs internally assumed by the providers of transport services. They come
as fixed (infrastructure) and variable (operating) costs, depending on various conditions related to
geography, infrastructure, administrative barriers, energy, and how passengers and freight are
carried. Three major components, related to transactions, shipments, and the friction of distance,
impact transport costs.


Household Expenditures on Transport, United States, 2005



Components of Transport Cost



Average Fares Disbursed for JFK–LAX Route, 2009 (April to July)

Transport costs have significant impacts on the structure of economic activities as well as on
international trade. Empirical evidence underlines that raising transport costs by 10% reduces trade
volumes by more than 20%. The general quality of transport infrastructure can account for half of the
variation in transport costs. In a competitive environment where transportation is a service that can
be bid on, transport costs are influenced by the respective rates of transport companies, the portion of
the transport costs charged to users.

Rates are the price of transportation services paid by their users. They are the negotiated monetary
cost of moving a passenger or a unit of freight between a specific origin and destination. Rates are
often visible to the consumers since transport service providers must provide this information to
secure transactions. They may not necessarily express the real transport costs.

For the service provider, the difference between costs and rates results in a loss or a profit. Rate-
setting is a complex undertaking subject to constant change concerning the components defining
transport costs. For public transit, rates are often fixed, and the outcome of a political decision where
a share of the total costs is subsidized. The goal is to provide affordable mobility to the largest
possible segment of the population, even if this implies a recurring deficit (public transit systems
rarely make any profit). It is thus common for public transit systems to have rates that are lower than
costs and targeted at subsidizing the mobility of social groups such as students, the elderly, or people
on welfare.

For freight transportation and many forms of passenger transportation (e.g.air transportation). rates
are subject to competitive pressure. This means that the rate will be adjusted according to the
complex interactions between supply and demand. They either reflect costs directly Involved with
shipping (cost-of-service) or are determined by the value of the commodity (value-of-service). Since
many actors involved in freight transportation are private, rates vary, often significantly, but
profitability is paramount.

Distance and time

The impacts of geography mainly involve distance and accessibility. Distance is commonly the most
basic condition affecting transport costs. The more it is difficult to trade space for a cost, the more
the friction of distance is important. It can be expressed in terms of length, time, economic costs, or
the amount of energy used. It varies significantly according to the type of transportation mode
involved and the efficiency of specific transport routes. Landlocked countries tend to have higher
transport costs, often twice as much, as they do not have direct access to maritime transportation.
The impact of geography on the cost structure can be expanded to include several rate zones, such as
one for local, another for the nation, and another for exports.

The transport time component is also an important consideration as it is associated with the service
factor of transportation. They include the transport time, the order time, the timing, the punctuality,
and the frequency. For instance, a maritime shipping company may offer a container transport
service between several North American and Pacific Asian ports. It may take 12 days to service two
ports across the Pacific (transport time), and a port call is done every two days (frequency). To
secure a slot on a ship, a freight forwarder must call at least five days in advance (order time). For a
specific port terminal, a ship arrives at 8 AM and leaves at 5 PM (timing), with the average delay
being six hours (punctuality).

4.. time cost

Time costs.
The delays related to the lag between an order and the moment it is received by the purchaser,
which is often referred to as inventory in transit. Long-distance international trade is often associated
with time delays that can be compounded by custom inspection delays.

WHY TIME MATTERS IN TRADE

Speedy delivery doesn’t matter so much for bulk commodities and simple manufactures,but it is
critical in two circumstances: when goods are subject to rapid depreciation and when demand for
them is uncertain. Some goods’ value depreciates on a daily or weekly basis. For example,
lengthy transit times for fresh produce and cut flowers result in spoilage. Goods subject to rapid
technological obsolescence, such as advanced electronics, can also lose significant value while on
long ocean voyages.
When demand is certain, firms can place orders well in advance of final sales and be unconcerned
by long waits. Consumers, however, often prefer one variety of a good over another, and their
preferences may shift quickly. Firms do not know about these preferences well in advance of final
sales. The longer firms are able to delay production decisions, the more information they can
obtain about preferences and adjust accordingly. Exporters subject to long delays for goods in
transit between markets, however, must produce further in advance of final sales, and with
significantly less information about market conditions. For example, during holiday gift-giving
seasons, toy manufactures rarely know in advance which toys will emerge as children’s favorites.
As the holidays approach, manufacturers receive market signals about preferences in the form of
product reviews and early sales. If they can defer production and shipping they can adjust
inventories accordingly. The ability to respond quickly to new market information is also an
THEGROWING DEMAND FOR TIMELY DELIVERY
The rising share of air cargo in world trade demonstrates the increasing importance of timely
delivery. Since 1951, ton-miles of air cargo shipped worldwide have grown at a rate of 11.7
percent per annum, much faster than the growth of trade or the growth in ocean cargo. For the
United States in 2004, air shipments comprised more than a third of imports and more than half of
exports with non-adjacent neighbors. The pattern is similar in Latin America. For Argentina,
Brazil, Colombia, Mexico, Paraguay, and Uruguay air cargo represents at least 30 percent of trade
with non-adjacent neighbors (Hummels 2007a).
This growing demand for timely delivery is rooted in (1) the shift in world trade from bulk
commodities to inherently time-sensitive complex manufactures,1 (2) wealthy consumers’
preference for precise product characteristics and ability and willingness to pay for fast delivery,
and (3) increasingly segmented production chains. Consumers’ increasing willingness to pay for
precise product characteristics pressures manufacturers to produce to specifications and to adapt
rapidly. Consumers also see rapid delivery as a measure not only of service quality but of product
quality—waiting renders a good inferior. In addition, consumers are using their higher incomes to
pay directly for timely delivery (e.g., many pay Internet retailers extra for rush delivery).
Timeliness is crucial to the smooth functioning of highly segmented production chains that locate
production tasks—research and development, component manufacture, final assembly,
marketing, distribution—where the best, most efficient resources are available.2 As a result,
1 Demand for speedy delivery has also risen for less time-sensitive goods. One
example is white cotton
underwear: firms cannot raise prices above the market price, as consumers will simply buy these standard
garments from producers who have not raised prices. Instead, the producer must streamline production,
which includes reducing production, storage, and transit times.
2 For example, research and development requires a ready supply of talented
scientists and engineers,
component manufacture requires inexpensive supplies of capital and capital machinery, and assembly
requires low cost labor. Few countries have all three countries increasingly specialize in stages of
production rather than entire products, as
documented by Hummels, Ishii and Yi (2001). This type of trade promises large gains, but only if
the stages of production can be linked in a timely way. For example, multi-stage production
networks often rely on “just-in-time” inventory techniques to minimize inventory on-hand and in
the pipeline. But the ability to use just-in-time techniques is limited when parts suppliers must
endure port delays, lengthy inland transport, and prolonged customs clearance
Understanding of relevant elements affecting international trade

communication

Cross cultural communication can also refer to the attempts that are made to exchange, negotiate and
mediate cultural differences by means of language, gestures and body language. It is how people
belonging to different cultures communicate with each other. Each individual can practice culture at
varying levels.
International trade allows countries to expand their markets and access goods and services that otherwise may
not have been available domestically. As a result of international trade, the market is more competitive. This
ultimately results in more competitive pricing and brings a cheaper product home to the consumer.

Initiatives to address communication issues

Business communication explained

Your business depends on the successful sharing of information — and so do your employees. Yet
66% of companies lack a long-term plan for their internal business communication. Why is this such
a critical mistake? What are the most common communication challenges, and how can you avoid
them?

Untangle work with Workplace

From informing everyone about the return to the office to adopting a hybrid way of working,
Workplace makes work more simple

What is business communication?

Communication matters. In every arena of our lives, we have a fundamental need to share and
receive information. Without effective communication, we can’t make ourselves heard, connect to
our peers, and ultimately achieve our goals. This is particularly applicable in the workplace, where
cooperation determines the success of individuals, teams, or even an entire business.

This is what we mean by 'business communication’: your ability to communicate with every other
member of your organization, and their ability to communicate with each other.
It’s a simple concept, yet one that has a significant impact on the health of your business. Business
communication underpins almost every aspect of your day-to-day operations. From leadership to
staff training, project collaboration to resource management, there are few activities that don’t rely
on the successful sharing of information and ideas.

The importance of getting this right should be self-evident, but there’s also a significant body of
research that points to the value on offer. Studies suggest that organizations with effective business
communication are more profitable, more productive, and enjoy higher employee retention. Despite
this, most businesses fall short when it comes to strategizing their internal communications. While
70% use plans to support specific campaigns and initiatives, only a third (33%) have a document that
details their longer-term strategy for internal communications.

This is a mistake. To fully appreciate this, it’s worth taking a moment to explore why every company
should care about its business communication.

Why you should care about business communication

Communication helps workers meet their need to connect

In the middle of the twentieth century, psychologist Abraham Maslow published his academic paper,
A Theory of Human Motivation. Within this he revealed his now-famous Hierarchy of Needs. It's a
pyramid-shaped diagram that arranges human requirements in an ascending progression from basic
needs — those we need to survive — through to our psychological needs, and then finally those that
fuel our sense of fulfillment.

Maslow’s Hierarchy states that once human beings have met their physiological needs (food, water,
warmth and rest) and are in a position of safety and security, a sense of belonging is the next thing
we value the most. The desire to connect to our peers is an essential element of our everyday
wellbeing.

And this isn’t just a theory: more recent research has found physical evidence that proves Maslov
was right. Scans of human brain activity show that whenever we’re not busy with an active task, our
brains default to thinking about other people and what’s going in their heads: their thoughts,
emotions and goals.

"A workplace with strong business communication is more likely to make employees happy"

In short, human beings are hardwired for social connection — and needless to say, communication is
the lifeblood of connection. Our interpersonal relationships rely on the back-and-forth exchange of
information; on a grander scale, the sharing of goals and values is what makes us feel part of things
that are larger than ourselves. And this is just as applicable to our work lives as it is to our personal
endeavours.

What does this all mean for business leaders? Your employees have to be able to communicate. If
they can’t for some reason — they lack the right tool or forum, or they don’t feel empowered to
speak up — then their basic needs aren’t being met. They’re probably unhappy, and this is something
you should care about. Not just for the sake of human decency, but also because unhappy workers
are less productive and more likely to quit their jobs.

On the other hand, the opposite is also true: a workplace with strong business communication is
more likely to make employees happy, which leads to higher productivity.

In short: an investment in your tech is an investment in your people.

Engaged workers are the best workers

As we’ve established, providing good communication channels and the culture to support them is
key to your workforce's wellbeing. But if that’s not a strong enough incentive for you, consider this:
when you get business communication right, your employees will be more engaged with their work
and with the company as a whole.

And time and time again, research has shown that engaged workers are also better for your bottom
line.

Gallup’s Q12 Meta Analysis report is one of the numerous publications that support this idea. “This
study confirms what Gallup has seen with previous meta-analyses,” said the research institute. “
Employee engagement consistently affects key performance outcomes, regardless of the
organization's industry or company.”

MIT research has also found that the most engaged employees are informed about their company and
have more direct communication with their managers. But in most companies, only a small fraction
of the workforce is fully engaged. Fifty percent of employees are unclear about the direction of the
business, while 84% say that they don’t get enough information from their leaders.

The prospect of fully engaging the entirety of your workforce may seem daunting or unrealistic, but
as we’ll see, new technology can provide significant help. And it’s a goal worth pursuing. When
your employees have full visibility of the company mission, and you've empowered them to join
company-wide conversations, they become personally invested in the business.

This workforce-wide sense of collective ownership is something that every business can achieve, but
doing so requires a strong internal communication culture, supported by the right tools and channels.
While it may take time and money to establish this culture, the opportunities on offer provide a
strong motivation for the investment.

As should the pitfalls that may arise if you neglect this area of your business.

When you get it wrong, the whole organization suffers

Because good communication is the cornerstone of so many aspects of modern business, problems
can snowball in its absence. If an employee has an issue that stops them from sharing or receiving
the information they need, the disruption spreads far beyond that lone worker. It impacts everyone
who relies on that individual and, in turn, potentially all the people who depend on them.

In short, when your workforce can’t communicate properly, the business ceases to function as it
should. This can lead to expensive errors. A recent survey of 400 corporations concluded that
communication issues had cost them billion over a single year.

While any number of factors can contribute to communication problems, one of the most common
causes is a lack of investment in the right tools and channels. More than a third of workers
worldwide believe that outdated technology and processes are making their jobs harder than they
should be. Frontline employees are even more likely to hold this opinion — which is hardly
surprising when you consider that the majority of frontline communication still relies on pencil and
paper.

As tempting as it may be to ‘make do’ with outdated technology, the cost of inefficiency far
outweighs the short-term savings. Few businesses would consider using old channels for their
external communications — relying solely on radio ads and paper flyers for their marketing efforts,
for example.This is an area where it’s essential to keep pace and explore the latest platforms at your
disposal. Why should your internal comms be any different?

And regardless of whether you stay up to date with communications technology, the younger
members of your workforce certainly will.

Gen Zs expect you to care about business communication

Most estimates forecast that Generation Z now accounts for between a quarter to a third of the global
workforce. Regardless of the exact figure, it’s clear that this young demographic will account for an
increasing proportion of your employees over the next decade. If you want to attract the best talent
from this generation, you’ll need to meet their expectations of a modern workplace.

The most obvious of these expectations is a demand for the latest tools and platforms. The link
between tech and Gen Z is so commonly cited that it’s almost a cliché, but the research certainly
supports the connection.

One recent global survey found that 80% of Gen Z respondents want to work with cutting edge
technologies, and the same percentage believed that tech will contribute to a fairer workplace. Yet
Gen Z is hardly alone in holding this opinion. Millennials are equally likely to see this a key factor in
choosing a job, which should further underscore the importance of investing in this area.

But while your younger employees will certainly expect their workplace to match — if not outpace
— the technology they use in their personal lives, this only tells part of the story. Because Gen Z is
also defined by its emphasis on human values.

For all their love of tech, the overwhelming majority of Gen Z workers care deeply about the ‘human
element’ in their jobs. They want to work with colleagues who challenge and motivate them, who are
open to collaboration and collective thinking, and available when they need to ask for help. In fact,
‘supportive leadership’ and ‘positive relationships at work’ are the top two most-desired traits in a
potential new job.

Company leaders must take a holistic approach to business communication. Adopting the right tools
is an important part of the process, but you must support it with a strategy that creates the right
culture — where people are encouraged to talk and listen.

You should now understand why it’s essential to have a long-term plan for business communication
— and why the 67% of businesses who don’t are taking a serious risk. Perhaps the best way to start
is by examining the seven most common forms of company communication.

What are the most common forms of business communication?

There are seven distinct forms of communication. The major difference between them is the type of
information people are sharing, the timing of its sharing, and the direction the information follows as
it moves through your company.

As you’ll see, there's a degree of overlap between forms — but for now, it’s helpful to discuss them
as separate entities. We’ll start by exploring the different directions in which information can be
communicated.

Top-down business communication

Top-down communication is traditionally associated with leadership. It’s a trait found in social
hierarchies — situations where there’s a group of people - with one person (or several) in charge.

When leaders want to communicate with the rest of their team, department, or perhaps even the
entire company, the information is passed down through the management chain until, in theory, it
reaches everyone.

Top-down communication's strength is that it allows leaders to tightly control the spread of
information, as they can tailor details for audiences at each stage. For example, when a CEO wishes
to implement a policy change, the basic facts stay the same as the news travels throughout the
company. However, at each step, new information or more detailed instructions can be added to help
employees implement the policy.

Of course, this structure also carries risks. The chain is only as strong as its weakest link: if one
person fails to convey information accurately, their mistake gets passed on to everyone else. By the
time anybody spots the error, the wrong information is already out there.

For businesses, top-down communication is essential. It allows leaders to share their vision for the
company, set agendas, and direct behavior across the workforce. But it's also based on a questionable
assumption: the CEO is the all-knowing master of his - and it was usually a 'his' - realm. At heart,
top-down communication stems from the idea that leaders talk while others listen.
Today, we see a shift in attitudes. We're beginning to understand that leadership is listening. And this
means senior executives need to pay attention to the information flowing the other way through their
organization.

Bottom-up business communication

This is the opposite of top-down communication. Here information starts from the lowest rungs of
the corporate ladder and moves upwards, with leadership being the last in line to receive it.

Once again, the success of bottom-up communication is determined by the people's reliability at each
step of the chain. As we’ll discuss below, there’s a two-fold problem here. Firstly, most business
leaders don’t believe that they need to listen to their frontline, so they don’t promote a culture that
encourages people to speak up. Even if they do, employees typically lack the tools that make it easy
to pass information up the chain of command.

Despite these hurdles, bottom-up communication can and should play an integral role in your
business. Everyone in your company has a different perspective. Creating open lines of
communication with your frontline staff will provide valuable intelligence on everything from what
your customers are thinking to the efficiency of your manufacturing processes.

And as we’ve already discussed, when you give your workers a voice, it makes them feel connected
to the broader business — which is good for them and good for your bottom line.

Lateral business communication

Also known as horizontal communication, this is the most common form of information exchange.
Lateral communication takes place between people at the same level: it’s what happens when team
members talk about a project they’re working on, or when store managers share best practice.

Lateral communication can unfold across almost any medium you can think of. The critical factors
here are that your employees can access the channels that best suit their working needs, and they then
adopt them universally.

In short, adoption matters. So while many platforms support lateral communication, it’s important to
ensure that you’re not using too many of them. Fewer channels mean less onboarding, which in turn
makes it easier to aim for company-wide uptake. After all, there’s no point in training a single
department in a powerful tool if no-one else in the business knows how to use it.

Synchronous and asynchronous business communication

Top-down, bottom-up, and lateral communication describe the direction that information follows as
it flows through your organization. The four remaining forms of communication are all concerned
with its speed and timing.
As their names suggest, synchronous and asynchronous communication exist in direct opposition to
each other. In synchronous communication, information is shared back and forth with immediacy, or
at least something close to it: one person says something, and then the recipient responds as soon as
they process what they’ve read or heard.

Speech is the most obvious form of synchronous communication, but instant messaging tools also
fall under this category. When you send someone a message on a chat app, you typically expect to
get a reply back pretty swiftly. If the recipient takes too long to respond, frustration sets in — you’ll
likely try another means of contacting them, or speak to someone else entirely.

With asynchronous communication channels, there’s an understanding that there will be a gap
between the initial message and any response. Posted letters are the classic medium of asynchronous
communication, but email and message boards are more relevant examples in today’s workplace.

The important thing to know about synchronous and asynchronous channels is that your business
needs both of them. Synchronous communication lets you share information at speed; asynchronous
communication ensures that information is there when the recipient needs it.

If you try to use asynchronous tools for synchronous communication — or vice-versa — problems
arise. We’ll explore this further in the next section of this article.

Static and dynamic business communication

Static communication describes any information that’s designed to remain consistent over time.
Dynamic communication describes the information that people are continually updating.

The best way to understand static communication - sometimes known as “cold” communication - is
that it's permanent. Think employee handbooks, HR policies, work from home advice, or technical
support pages. These are all things that tend to be associated with a company intranet: you probably
won't search for them every day, but you expect them to be available on the rare occasions when
employees need them.

In contrast, dynamic communication - sometimes known as ‘hot’ communication - is information

that recipients can change or update. The whole point of dynamic communication is for multiple
individuals to alter information together collectively. Digital collaboration tools have made dynamic
communication a core element of the modern workplace, enabling entire teams to work on the same
documents at once.

Static communication makes a record and provides a point of reference. Dynamic communication is
all about collaboration.

Each of these communication forms has a different role to play, and your employees will need to use
them efficiently if your business is to flourish.
Next, we’ll examine some of the most common communication problems that tend to arise, along
with their solutions.

Common business communication challenges (and how to solve them)

Picture a scenario where you’re with five friends, and you’re all taking part in the same conversation.
Nice and straightforward, right? But if another eight people were to show up, it would be
significantly tricker for everyone to make themselves heard.

Now imagine the same scene but with 50 people all trying to participate in the same conversation.
Absolute chaos.

That’s the main criticism of synchronous communication channels. Chat apps, conference calls and
in-person meetings are all designed for swift exchanges of information, where each participant can
express their views. The more people who join, the more noise there is — until eventually the
channel becomes unusable for everyone.

The solution: The important thing here is to control the situation and to limit excess noise. The most
obvious way to do this is to break a large group into several smaller ones. But if everyone has to be
involved in the same conversation, set rules that determine who can speak and when. For example,
nominate a few participants to act as spokespeople for their peers, and have someone act as a chair
who controls the conversation. If you want the broader audience to remain directly involved, the
chair can direct a Q&A session.

Alternatively, it may help to consider a different channel altogether. Some collaborative work
platforms facilitate large-scale synchronous communications — enabling a CEO to address their
entire workforce via streaming video, for example. But if you’re trying to cram 50 voices into the
same live conversation, it’s probably a sign that the conversation shouldn’t be live at all. Consider
using an asynchronous communications method instead.

The bottom line is that your organization needs the right mix of channels and clear guidelines on
how and when people use them. With both of these elements in place, the limitations of synchronous
communication will never be an issue.