95

Understanding Corporate
Communication

UNIT II
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Corporate Communication
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LESSON Understanding Corporate
Communication

5
UNDERSTANDING CORPORATE
COMMUNICATION

CONTENTS
5.0 Aims and Objectives
5.1 Introduction
5.2 Corporate Organization and its Characteristics
5.3 Information to be communicated in an Organization
5.4 Need for Communication in Management
5.5 Factors influencing Corporate Communication
5.6 Managerial Communication
5.6.1 Managerial Roles
5.6.2 Managerial Functions
5.7 Employee Communication
5.7.1 Factors Responsible for the Grapevine Phenomenon
5.7.2 Types of Grapevine Chains
5.7.3 Advantages of Informal Communication (Grapevine)
5.7.4 Disadvantages of Informal Communication (Grapevine)
5.7.5 Effective use of the Grapevine
5.8 Patterns of Communication
5.9 New Trends in Corporate Communication
5.10 Ways to improve Corporate Communication
5.11 Let us Sum up
5.12 Lesson End Activity
5.13 Keywords
5.14 Questions for Discussion
5.15 Suggested Readings

5.0 AIMS AND OBJECTIVES

After studying this lesson, you will be able to:
 Discuss the features of, and factors affecting corporate communication
 Describe the need for communication in management
 Realize the informal channel of employee communication
 Identify the new trends in, and ways to improve corporate communication
98
Corporate Communication 5.1 INTRODUCTION
Communication is the passing of information and understanding from one person to
another at the same level or at different levels. It is the process by which the
management reaches out to others and gives directions on how they should manage
their work. Since managers work through others, all their managerial functions pass
through the channel of communication. One person can initiate the process but he
alone cannot complete it. It is completed only when it is received by others. The
effectiveness of management largely depends upon the effectiveness of
communication. The communication system serves as the vehicle by which an
organization is embedded in its environment. It not only integrates its various sub-
units but also, in a systematic sense, serves as an elaborate set of interconnected
channels designed to sift and analyze important information from the environment. It
also exports processed information to the environment.
The roles of communication become more critical as the organization grows in size,
stature and image. The system should be adjusted according to the needs of the
organization from time to time.
Communication is the nervous system of an organization. It keeps the members of the
organization informed about the internal and external happenings which are relevant
and of interest to the organization. It coordinates efforts of the members towards
achieving organizational objectives. It is a process which influencing the action of a
person or a group, while creating meaningful interaction among human beings to
initiate, execute, accomplish, or prevent certain actions.

5.2 CORPORATE ORGANISATION AND

ITS CHARACTERISTICS
A corporate organization is a system consisting of a large number of people working
together in a structured way to accomplish multiple goals. A corporation, is a complex
organization that involves many people working together to achieve a common
business goal. Each person plays a different role depending on his or her position
within the organization. Managers, executives, workers have their own organizational
identities and their own ways of behaving and the success of the company or corporate
organization depends in large part on each group’s willingness and ability to fit into
the company’s structures.
A few prominent characteristics of an organization are:
 Interdependence: Perhaps the characteristic that best defines a corporate
organization is interdependence. Interdependence means that all the members
within a corporate organization are connected to one another. They share a
common fate: what affects one part of the organization affects every other part.
 Hierarchical Structure: Corporate organizations are normally hierarchical.
A hierarchical is a system that is divided into orders and ranks. In a hierarchy,
status and power are not distributed equally: some people are subordinate to
others. Every member of the organization reports to someone else who is
responsible for overseeing his or her work. Jobs are usually specialized, and
employees are rewarded on the basis of performance.
 Linkage to the Environment: Like other living systems, organizations are linked
to their environments. Organizations depend on their surroundings for resources
and energy. Just like living creatures, organizations cannot survive without a
healthy environment. An obvious example occurs when a manufacturing company
depletes local resources. But there are other, less apparent, instances as well.
 When a large corporation moves its corporate headquarters, the move has an 99
Understanding Corporate
impact on the well-being of its former community. The fact that organizations are Communication
linked to the communities around them means that they must be aware of the
damage they can sometimes cause. They must also be capable of adapting to
changes in the environment that surrounds them.
 Dependence on Communication: One of the most important kinds of corporate
behavior is communication. People in corporations argue, cooperate, make
decisions, persuade one another, solve problems, and forge relationships. When
they do these things, they engage in corporate communication. One of the things
that make corporate communication so important is that the very nature of the
corporate organization depends on the way members communicate.

5.3 INFORMATION TO BE COMMUNICATED IN AN

ORGANISATION
To reduce the chances of misinformation by the grapevine, an organization keeps all
its employees informed about every happening and future plan. The content of
information is usually a mix of fact, opinion, attitudes, and interpretation.
Broadly, all business communications can be divided into five types of information:
 Statutory Information: Information, such as terms and conditions of service, is to
be communicated to all employees as a statutory requirement.
 Regular Work-situation: Information regarding normal work situations has to be
regularly communicated through routine formal briefing sessions or through
informal chat sessions between the manager and various group members or
colleagues.
 Major Policy or Operational Change Information: Any major change in the
organization's policy or work, which can affect employees or clients, has to be
communicated to all. This could be done by calling special meetings or by issuing
notices which can be read by all.
 Information Bulletin: To keep people informed about events and happenings
taking place in the organization, to provide periodic information in the form of a
newsletter which can be communicated to all employees of the company. This
information creates involvement and belonging to the organization.
 Communication by Expectancy: Information of critical changes should be
carefully and gradually communicated to those who are going to be directly
affected by the decision. Before the decision is taken and implemented, the people
concerned must be mentally prepared for the event. This can be done by involving
their representative or head in the process of decision making. The objective of
this exercise is to create expectancy in the receivers who would be less shocked by
negative communication and its eventuality.

5.4 NEED FOR COMMUNICATION IN MANAGEMENT

In an organization, communication is a means to attain the following objectives:
 To develop in employees clear understanding of their roles and future growth
opportunities in the organization.
 To motivate and create a sense of identification with the organization’s goal.
 To promote in employees a sense of belongingness and commitment.
100  To increase employees’ job performance and effectiveness by updating their
Corporate Communication
knowledge.
 To effect changes smoothly.
 To inform and convince employees about decisions and the reasons behind those
decisions.
 To empower employees with information on development and activities.

5.5 FACTORS INFLUENCING CORPORATE

COMMUNICATION
The communication system of an organization is generally influenced by four factors,
namely formal channels of communication authority structure of the organization; job
specialization; and what Lesikar calls, “information ownership.”
 Formal Channels of Communication: The formal channel of communication is
controlled by managers. It is mostly directive or restrictive in nature and does not
leave much scope for free flow of information. Its advantages and disadvantages
have been discussed earlier.
 Authority Structure: The organization’s authority structure has a similar influence
on its communication system. Status and power" difference, play an important
role in determining who will communicate with ease and with whom. The content
and accuracy of the communication will also be influenced by the place of the
people in the organization. For example, conversation between a general manager
and clerk will, in all probability, be strained by politeness and formality.
 Job Specialization Ownership: This means that individuals own or possess
unique information about the jobs they specialize in. For example, a plastic
surgeon in a super speciality hospital may have found a particularly efficient way
of cosmetic nose correction or a chef in a big hotel may have come upon a new
recipe. Such information is a form of power for the person possessing it, as it
gives him an edge over others. He may not like to share his knowledge or
particular skill with others. As a result, completely free flow of information does
not take place, although ownership can be shared.
 Information Ownership: This means that individuals own or possess unique
information about their specific jobs. For example, a marketing manager may
have a special skill to motivate his employees in a specific manner or a chef in a
hotel may have a special recipe. Such information is a form of power for the
person owning it, as it gives him an edge over others. Such information may not
be shared freely because of individual insecurities, secrecy or plain non
co-operation.
Check Your Progress 1
State whether the following statements are true or false:
1. In a hierarchy, status and power are distributed equally.
2. Nature of the corporate organization depends on the way its members
communicate.
3. Statutory information may or may not be communicated to every
employee of the organization.
4. Formal channels of communication facilitate free flow of information.
 101
5.6 MANAGERIAL COMMUNICATION Understanding Corporate
Communication
To a large extent, the success of an organization depends upon the atmosphere in
which there is a free flow of information which could be upward, downward or
horizontal. At the workplace, we primarily think of getting things done. For this,
instructions guidelines, supervision, monitoring and periodic reporting are usually,
considered enough. But, if we wish to achieve more than the set task, a real
involvement of all the employees, from the highest to the lowest levels must be
secured by allowing every level of worker/employee to suggest/offer ideas, views, and
experiences. Such a system of communication can be evolved and established within
the organization only by the manager. In fact, the manager functions as a point of
intersection of all communication channels. One of the important concerns of the
manager is to organize and ensure an effective information system across the
organization.

5.6.1 Managerial Roles

As analyzed by Henry Mintzberg of MIT, managers need effective communication
skills to perform the following inter-related roles, namely:
1. Interpersonal
2. Informational
3. Decisional
The interpersonal role makes the manager act as a figurehead leader, and liaison
officer. The informational role makes him/her monitor, and disseminate, in the
capacity of a spokesperson. In the decisional role, the manager functions as an
entrepreneur, trouble shooter, resource allocator and negotiator.
1. Interpersonal Role: It is necessary to ensure effective operation of the
organization’s system and to maintain proper relationships within the organization
and with outside clients and suppliers. If interpersonal communication is effective,
internal systems will run smoothly. For example, personnel functions within the
organization require that as a manager you inspire confidence, win support and
guide your workers. You are a role model for others and it is imperative that you
develop the skill of patient listening and creates an atmosphere of mutual
understanding and goodwill through transparent sharing of the company’s
objectives, missions and problems.
2. Informational Role: If the internal information system is effective, systems such
as stock control, personnel financial, systems, and quality control networks will
operate smoothly. Shortcomings and problems will be quickly identified and
remedial action taken. Proper maintenance of product and service standards will
be ensured through timely monitoring and instructions. Through effective,
interactive and informational communication, and a strong feedback system, the
high morale and satisfaction of workers will finally be secured.
3. Decisional Role: Decision making is based upon receiving and interpreting all
relevant and necessary information. Without having necessary information,
decisions may turn out to be unrealistic and guesswork based. Managers need to
possess the skill of receiving relevant and latest information accurately in order to
take decisions and act rationally, fairly and to the satisfaction of all concerned.
All these functions require the manager to handle people and situations with a deeper
understanding of human component.
102 Table 5.1: Communication Needs in Different Jobs
Corporate Communication
Job Title Communication Skills
Secretary Proficient and writing skills.
Finance Associate/Finance Ability to communicate clearly to client and others.
Product Manager Develop and communicate product strategies.
Sales Representative Excellent oral communication, follow up skills and ability to draft
proposals.
Personnel Manager General knowledge of proposal preparation: good oral/ written
communication skills.
Production Manager Ability to write and read, listening to grievances, ability to conduct
interviews.
Contracts Administrator Ability to communicate precisely to employees working under his
supervision.

5.6.2 Managerial Functions

The role of communication is to define and support the action involved in each of the
functions given below:
 Forecasting and Planning: Each function depends on effective communication
for its success. For example, if the management fails to communicate its
objectives, policies, programmes, procedures, and budgetary provisions to the
concerned people at the proper time, an organization would fail to run in an
organized and targeted manner.
 Organizing: Organizing, as a management function, determines the formal and
informal relationships within the organization and outside it. These relationships
are developed and maintained through inter-personal communication.
 Instructing: The function of instructing wholly depends upon interpersonal
exchange of information regarding products, processes, and targets for its success.
 Coordinating: Coordinating is, perhaps, the most demanding of all managerial
functions. It requires excellent communication skills to ensure that all efforts are
directed towards the achievement of a single organizational goal. To see that
diverse activities are unified into a single whole, the manager should be able to
relate with all people formally and socially.
 Controlling: For affective control over organizational functioning and planning,
the manager should have the requisite competence to receive information and to
respond quickly.
Hence, an active communication system is vital for the good health of an organization.
If there is a continuous sharing of ideas and interaction between management and
workers, an overall atmosphere of understanding and goodwill will prevail at the
workplace. If decision-making is transparent, employees would understand reasons for
those decisions and would also accept and implement them, even if they affect them
adversely.

5.7 EMPLOYEE COMMUNICATION

Employees usually communicate through formal and informal channels. Formal
channel of communication has already been discussed in lesson 1. Now we will
discuss the informal channel of employee communication.
By his very nature, man cannot always have a highly formalized or regimented living.
Logically he cannot and will not always communicate through formal channels alone.
Side by side with the formal channel of communication every organization has an 103
Understanding Corporate
equally effective channel of communication namely that is the informal channel. It is Communication
not officially sanctioned, and quite often it is even discouraged or looked down upon.
But, then, it is very much there, and has been given the name ‘grapevine’ precisely
because it runs in horizontal, vertical, and diagonal directions. As the management
experts put it, “it flows around water coolers, down hallways, through lunch rooms,
and wherever people get together in groups”.
It shows that people are almost always looking forward to an opportunity to gets
together. Man is essentially sociable by nature. The lower we go down the pyramid of
an organization, the more manifest this sociability becomes. There are strong
socio-psychological reasons for it. The most important reason is the intense,
irrepressible desire to communicate, talk, share one’s feelings and thoughts, or gossip
and indulge in small talk. This gossip or small talk may carry some important
information. It may even ‘manufacture’ some piece of information and get the rumour
mill working. Every organization has a rumour mill and every worker, officer and
manager have to get used to it.

5.7.1 Factors Responsible for the Grapevine Phenomenon

The grapevine becomes hyperactive when the following factors prevail:
 Feeling of uncertainty or lack of a sense of direction when the organization is
passing through a difficult period.
 Feeling of inadequacy or lack of self-confidence on the part of the employees,
leading to the formation of groups.
 Formation of a favoured group by the manager, giving other employees a feeling
of insecurity or isolation.
 Some unusual happening in the organization.
 Personal problems of the employees.
Any worker operating in such circumstances will be filled with ideas and will at least
whisper to like-minded friends at whatever level he finds them. Mostly they find them
at their own level, though groupings with other levels are not ruled out altogether. It is
a very subtle and interesting phenomenon which is being seriously studied and
analyzed by psychologists and management experts.

5.7.2 Types of Grapevine Chains

Keith Davis has identified four types of grapevine chains that can be enumerated as
follows:
 Single-strand Chain: In this type of chain, ‘A’ tells something to ‘B’ who tells it
to ‘C’ and so on. This chain is the least accurate in passing on information.
 Gossip Chain: Here, one person seeks out and tells everyone the information he
or she has obtained. This chain is often used when information or message of an
interesting, nature but one that is 'non-job-related' is being conveyed.
 Probability Chain: Here, individuals are indifferent to, or not really interested in,
the persons to whom they are passing some information. They tell at random, and
those people in turn tell others at random. This chain is found when the
information is somewhat interesting, but not really significant.
 Cluster Chain: In this type of chain, ‘A’ tells something to a few selected
individuals, and then some of these individuals inform a few other selected
individuals.
104 Davis is of the opinion that the cluster chain takes the form of the dominant grapevine
Corporate Communication
pattern in an organization. Generally only a few individuals, called ‘liaison
individuals’, pass on the information they have come upon. This too, they are likely to
share with the people they trust or from whom they would like favours. It has been
observed that information which is passed on immediately, is interesting or relevant,
or is job-related, and above all, timely. Most informal communication takes place
through this chain.
Check Your Progress 2
Fill in the blanks:
1. In the ……………… role, the manager functions as an entrepreneur,
trouble shooter, resource allocator and negotiator.
2. Arguably, ……………….. is the most demanding of all managerial
functions.
3. Informal channel of communication is sometimes also referred to as
………………
4. ………………..chain is found when the information is somewhat
interesting, but not really significant.

5.7.3 Advantages of Informal Communication (Grapevine)

The advantages of informal communication include:
 Speedy Transmission: The greatest feature of the grapevine is that it transmits
information at a remarkably fast speed. Everyone knows that a rumour travels, or
spreads like wild fire. The moment a worker comes to know that something is
labelled as ‘top secret’ or ‘confidential’ he becomes curious to look into it or have
a sniff of it before passing it on to his very first close friend. And then, from him
to another, it spreads within minutes. Managers have been known to distribute
information through planned “leaks” or carefully used “just-between-you-and-me”
remarks.
 Feedback Value: It is above all through the grapevine that the managers or top
bosses of an organization get feedback regarding their policies, decisions and
memos. The feedback reaches them much faster through the informal channel than
through the formal one. Through the grapevine, managers come to know the pulse
of the organization.
 Support to other Channels: The grapevine functions as a supplementary or
parallel channel of communication. The officially recognized, sacred or formal
channel takes not only more time in carrying information, but also imposes certain
constraints on the process of communication. So, whatever is deemed to be
unsuitable for the official channel, can be successfully transmitted through the
grapevine.
 Psychological Satisfaction: The grapevine gives immense psychological
satisfaction. It also strengthens solidarity of the workers. While the purely formal
channel will put them off, the grapevine draws them nearer each other while,
keeping the organization intact as a social entity.
 Uniting Force: The grapevine brings together work force in matters of common
interest, and as a result acts as a binding force among the employees.
 Creation of Ideas: Informal communication, through sharing of ideas and views,
generates more ideas and expectations that often prove of value to the decision
makers and planners of goals and schemes.
 Good Personal Relations: Public relations fail in organizations because of lack of 105
Understanding Corporate
good relationships. Informal communication promotes personal relations and is Communication
therefore, important for the success of public relations.

5.7.4 Disadvantages of Informal Communication (Grapevine)

Disadvantages of informal communication include:
 Cannot be taken Seriously: There is something inbuilt in the very nature of
grapevine that makes it less credible than the formal channels of communication.
Since it spreads or transmits information by word of mouth, it cannot always be
taken seriously. On the other hand, it is also very likely to be contradicted, making
it highly undependable.
 Does not carry complete Information: The grapevine does not always carry
complete information. As it is often based on guess work or ‘whispers’ in the
corridors it may not give the receiver the complete picture of the situation or the
whole message.
 Distorts Information: The grapevine may, and indeed often does, distort
information. As it is entirely unofficial, informal and unauthenticated, it may cast
aspersions on anybody or impute motives to the most well-meaning of people. As
its origin lies in the rumour-mill, it may spread any kind of story about highly
responsible people, even at the risk of spoiling the image of the organization.
 It may prove Counterproductive: The speed with which the grapevine spreads
may also at times prove counterproductive. Ideally, any message, information or
policy decision should take its own course and time. But once it leaks, it may
damage the reputation of the organization or upset plans of the managers.
 Chances of Misinterpretation: In case of informal communication, there are
major chances of the information being misinterpreted, as every individual
passing the information may have his/her own perception and may add to the
information according to his/her own will.
 Lack of Accountability: Informal communication does not allow fixing authority
or responsibility structure and in case of a default, it is not possible to find out
who was responsible for the same.

5.7.5 Effective use of the Grapevine

Keeping in view, its advantages and undeniable presence in every organization, there
is a need to use the grapevine effectively for we have to learn to live with it. A tactful
manager has to take positive measures to get the best out of this informal channel of
communication. Given below are a few important points in this regard:
 In the first place a tactful manager will keep the employees well-informed about
organizational policy matters, plans and prospects. This will check the tendency of
speculation that can sometimes assume dangerous proportions because of fear and
anxiety, on the part of employees.
 Fruitful group activities that enhance self-worth and update knowledge should be
held as frequently as possible. This will not only boost the morale and
self-confidence of the workers but also check their inclination to indulge in small
talk.
 The managers should, as far as possible, have an open-door policy without
indulging in an impression of cheap popularity or favouritism.
 The manager should create a healthy environment where there is room for
personal talk. But it must be made clear that work is of paramount importance.
106 Nothing should be allowed to interface with the progress of the organization. For
Corporate Communication
this purpose regular timings should be fixed up for meetings with employees.
 The manager must tactfully identify leaders and win their confidence so as to feel
the pulse of their followers.
 As far as possible employees, through their leaders, should be associated with
decision making. This will frustrate any negative aspect of the grapevine.
 The manager must keep trying to procure clues about his style of functioning
through regular interaction with employees in as tactful and diplomatic a manner
as is possible.
 Rumour mongering aimed at character assassination or maligning somebody in
the organization should not be encouraged. Showing distaste for such talk will
earn praise for the manager’s leadership qualities.
 A manager must learn to be a good listener. In this connection, it is worthwhile to
enumerate three types of listening:
 Discriminative listening.
 Appreciative listening.
 Empathic listening.
Unfortunately, empathic listening is the least practiced by managers. They are usually
too busy to listen empathetically. This is a ‘relief-seeking’ conversion, and therefore
important to build meaningful human relations. It does not require any regular training
as a psychologist. But today’s manager can always benefit from the insight of modern
psycho-analytical research and learn to practice informal empathic listening.

5.8 PATTERNS OF COMMUNICATION

Both formal and informal channels work side by side or, in other words, run parallel to
each other. Quite often they get mixed up or cast their influence on each other, making
it difficult for the manager to get to the actual position and take a decision. While on
the one hand there are clear orders, directives or memos sent along vertical lines of
communication, on the other hand, the rumour mill or grapevine is doing its own job
of diluting, or distorting giving edge to the information which is meant to be sent
across. It shows that communication is a complex process indeed.
It is, therefore, of paramount importance that an organization develops a pattern of
communication, so as to improve its effectiveness. Developing such a pattern cannot
compensate for poor management ideas. But it must be noted, and indeed all managers
must realize, that poor communication, or inability to develop an effective and fruitful
system of communication, may lead to a dismal failure of management. The only way
to make sure that the management succeeds in implementing its ideas and in achieving
its goals, is to carefully consider the ‘what’; and ‘how’ of communication and evolve a
system of carrying this out. This is primarily a question of human relationship, as they
develop and are encouraged to develop in an organization. Modern communication
experts and management specialists have been seriously studying these relationships
and communication patterns in different types of organizations.
Keeping in mind the varying ways in which organizations communicate within their
hierarchical systems, researchers like Leavitt and Shaw have undertaken interesting
experimental studies and examined isolated patterns of communication. Given below
are the most important patterns of communication or communication nets:
(a) Wheel/ Y 107
Understanding Corporate
(i) Three-person wheel communication pattern. Communication

(ii) Four-person wheel communication pattern.

(iii) Five-person wheel communication pattern.
(iv) Five-person ‘Y’ wheel communication pattern.
These are somewhat centralized patterns, which are suitable for simple tasks as
they promote faster problem solution with fewer errors. They ensure the best job
performance but, at the same time, they also show lowest job satisfaction and
flexibility to change. There is a sort of inbuilt rigidity in this type of
communication pattern which hinders the communication process.
(b) Circle
(i) Four-person circle communication pattern.
(ii) Five-person circle communication pattern.
(c) All channel
(i) Four-person all channel communication pattern.
(ii) Five-person all channel communication pattern.
When the task is complex, decentralized patterns-circle and all channel, have been
found to be more efficient. They are more satisfying to group members in both
simple and complicated tasks as in these communication ‘nets’ or patterns they
enjoy more freedom, acquire different angles of vision and are enthused to put in
their best.
Certain other patterns have also been observed, formulated and experimental with,
namely:
(d) Kite
(e) Chain
(f) Slash
It would be worthwhile to examine as to what lies at the back of all these patterns.
It has been observed that in an organization which has both simple and complex tasks
to be performed, results are infinitely improved by using varying patterns and media
of communication, rather than by depending on patterns and mediums. A successful
organization will, therefore, endeavour to incorporate all or most of these patterns of
communication, as and when needed, or as the situation demands.
Let us take the example of an educational organization. The head of the institution/
organization will find it more appropriate to adhere to a centralized pattern like a
wheel while dealing with non-teaching/administrative staff. But, while dealing with
professional/teaching staff, he will have to adopt a decentralized communication
108 pattern, like a circle or all channels. The simple reason is that different types of
Corporate Communication
activities or tasks, levels of motivation, accountability, commitment and willingness to
assume responsibility, warrant different communication patterns.

Limitations of Communication Patterns

These communication patterns have emerged from researches and experiments that
have, after all, a limited value. When we look at them from the practical
organizational point of view, we realize that their findings cannot be adopted
immediately. The final decision lies with the management itself, who has to be
dynamic enough to evolve its own strategies. Behavioural scientists have conducted
their experiments mostly on closely guarded or controlled groups. And the behaviour
of groups in the laboratory is very different from that in real life situations. Moreover,
the behaviour of the people changes with the change in the size of the groups.
Anyway, it cannot be denied that these experiments have provided us useful
information about structural effect in communication networks. The main
achievement of these experiments is that they have highlighted the potential of any
variable, the introduction of which brings about some kind of change in the
communication pattern. The communication system in an organization works like a
kaleidoscope that changes its patterns whenever a new variable is introduced.

5.9 NEW TRENDS IN CORPORATE COMMUNICATION

In the changing business environment of multinational competition and globalization,
communication tends to become an important component of an organization. Like the
functional areas of production, marketing, and finance, communication too is shaping
into a distinct area, in the form of corporate communication. In this integrated form,
communication is supposed to speak to the world outside the organization and within
it, in a single voice, what marketing or public relations or quality control speak in
different voices, to build the corporate image.
Several socio-technological changes have taken place in today’s modern society.
These changes have made people pay more attention to communication as an
important tool of successful management. These changes are:
 Size of Organization: Big organizations are getting bigger and bigger, either
through their own increased level of production or through multinational
collaborations. The very size of organizations today poses problems of
communicating. These problems have got to be looked into for a proper running
of the whole project.
 Concept of Human Capital: All employees and workers are considered to be the
human component of business. They are not just the source of labour. Their
attitude, interest, and welfare constitute a major part of management concern to
achieve targeted goals and objectives. Hence, there has to be a live channel of
communication between the employees and the management.
 New Developments in Information Technology: The modern age, known as the
age of information, is just an age of many new media of information—telephone,
radio, television, communication satellite, computers, and so on. It is also an era
of a new attitude towards knowledge and the value of sharing it with others. In
fact, communication is now looked upon as a source of empowerment of people.
But the power of the media depends on the skills of those people who use them at
both ends of the communication channel. It involves a new attitude towards the
value and use of good communication.
 Need to Learn Corporate Etiquette: Top corporate executives are increasingly
being sensitized about the importance of knowing how to conduct meetings,
 seminars, presentations, and negotiations. They realize that management 109
Understanding Corporate
executives should learn the rule of etiquette, if not already familiar with them. Communication
These include:
 How to greet?
 How to shake hands?
 How to dress for success?
 How to present cards?
 How to listen?
 How to converse with seniors/ladies/and clients?
The training, which again is a part of communication skills, develops the corporate
etiquette to be observed and practiced for success in international/multinational/or big
national ventures. Good business manners speak of the culture of the organization, not
of the individual’s in particular.
These contemporary changes suggest that organizations not only need an effective
communication system; they need to have executives/managers who are well equipped
with these skills.
In business, a manager spends maximum time either speaking or writing to his
colleagues, his seniors, his juniors, or his clients. A manager’s success depends largely
on his ability to communicate. One of the important concerns of the manager is to
organize and ensure an effective information system across the organization.
Check Your Progress 3
1. What are the three types of listening that a manager should do?
……………………………………………………………………………
……………………………………………………………………………
2. On what does the power of modern media depend?
……………………………………………………………………………
……………………………………………………………………………

5.10 WAYS TO IMPROVE CORPORATE

COMMUNICATION
There are several tried-and-tested techniques for improving organizational
communication, which are as follows:
 Encourage open Feedback: In theory, encouraging open feedback is simple.
If accurate information is the key to effective communication, then organizations
should encourage feedback. After all, feedback is a prime source of information.
However, we say ‘in theory’ because it is natural for workers to be afraid of the
repercussions they may face when being extremely open with their superiors.
Likewise, high-ranking officials may be somewhat apprehensive about hearing
what is really on their workers’ minds. In other words, people in organizations
may be reluctant to give and receive feedback—a situation that can wreak havoc
on organizational communication.
These problems would be unlikely to occur in an organizational climate in which
top officials openly and honestly seek feedback and lower—level workers believe
they can speak their mind with impunity. How can this be accomplished?
110 Although this is not easy, several successful techniques for opening feedback
Corporate Communication
channels have been used by organizations. The following are some of the
techniques:
 360-degree feedback: These are formal systems in which people at all levels
give feedback to others at different levels and receive feedback from them as
well as outsiders—including customers and suppliers. This technique is used
in companies such as Hewlett-Packard, Motorola, and 3M.
 Suggestion systems: These are programmes that invite employees to submit
ideas about how something may be improved. Employees are generally
rewarded when their ideas are implemented. For example, the idea of
mounting film boxes on to cards that hang from display stands, which is
common today, originally came from a Kodak employee.
 Corporate hotlines: These are telephone lines staffed by corporate officials
ready to answer questions and listen to comments. These are particularly
useful during times of change when employees are likely to be full of
questions. For example, AT& T used hotlines in the early 1980s during the
period of its anti-trust divestiture.
 Use Simple Language: No matter what field you are in, chances are that it has its
own special language—its jargon. Although jargon may greatly help
communication within specialized groups, it can severely interfere with
communication among the uninitiated.
The trick to using jargon wisely is to know your audience. If the individuals with
whom you are communicating understand the jargon, using it can help facilitate
communication. However, when addressing audiences whose members are
unfamiliar with the specialized language, simple, straightforward language is
bound to be most effective. In either case, the rationale is the same:
communicators should speak the language of their audience. Although you may be
tempted to try to impress your audience by using big words, you may have little
impact on them if they do not understand you. Our advice is clear: Follow the
KISS principle, i.e., keep it short and simple.
 Avoid Overload: Imagine this scene: you are up late one night at the end of term.
You are writing a paper and studying for finals, all the same time. Your desk is
piled high with books when your roommate comes in to explain what you should
do to prepare for the semester-end party. If this sounds familiar to you, then you
probably know (only too well) that it is unlikely that you would be able to
concentrate on the things you are doing. After all, when people are confronted
with more information than they can process at any given time, their performance
tends to suffer. This condition is known as overload.
Staying competitive in today’s hectic world often doing many things at once—but
without threatening the performance, which is often the result when
communication channels are overloaded. Fortunately, several things can be done
to avoid, or at least minimize, the problem of information overload.
Some of these are given below:
 Rely on gatekeepers: People whose jobs require them to control the flow of
information to potentially overloaded individuals, groups, or organizations are
known as gatekeepers. In making appointments for top executives,
administrative assistants actually provide gate keeping service to them.
  Practice queuing: Queuing involves lining up incoming information so that it 111
Understanding Corporate
can be attended to in an orderly fashion. Air traffic controller does this when Communication
they ‘stack’ incoming planes in a holding pattern so as to prevent them from
tragically ‘overloading’ the runway.
 Walk the Talk: When it comes to effective communication, actions definitely
speak louder than words. Too often, communication is hampered by the practice
of saying one thing but meaning something else. Also, whenever implicit
messages (e.g., ‘we may be cutting jobs’) contradict official messages (e.g., ‘don’t
worry, the company is stable’), it is bound to result in confusion.
This is especially problematic when the inconsistency comes from the top. In fact,
one of the most effective ways of fostering effective organizational
communication is for CEOs to ‘walk the talk’, i.e. to match their deeds to their
words. After all, a boss would lose credibility if he/she told his/her employees
“my door is always open to you,” but was never available for a consultation. Good
communication demands consistency. For words to be heard as loud as actions,
the two must match.
 Be a Good Listener: Effective communication involves more than just presenting
messages clearly. It also involves doing a good job of comprehending messages
sent by others. Although most of us take listening for granted, effective listening
is an important skill. In fact, given that managers spend about 40% of their time
listening to others, but only 25% on effective listening, the latter is a skill that
could be developed in most of us. When we speak of effective listening, we are
not referring to the passive act of just taking in information. Rather, effective
listening involves three important elements:
 Being non-judgmental while taking in information from others
 Acknowledging speakers in ways that encourage them to continue speaking
 Attempting to advance the speaker’s ideas to the next step.
Individuals can be the root cause of a communication problem. In a business
scenario, we do not attempt to change individual personality traits, nor, for that
matter, is it possible; but we can surely understand the role of an individual in
communication breakdown.
Harold Koontz and Cyril O Donnell observe, “The most effective communication
results when managers utilize the informal organization to supplement the
communication channels of the formal organization”.
In using informal channels of communication, managers have to be very careful about
the form of informal communication. For example, it could be very effective to “walk
down the job” as it is called. Move around, chat and informally discuss the formal
matters in a related way. But, its effectiveness would depend on the personal
relationship and image created by the executive through his official behaviour, and
other personal attributes such as frankness, a sympathetic attitude, and sense of
fairness in dealing with people. As L Brown says, “In using the grapevine,
management must be able to pinpoint the leaders and work through them, must feed in
factual information, listen to the feedback response, and be discerning in not
overloading the system and using it inappropriately”.
It is important that management be sure to follow up the grapevine message with
official written messages and statements that will verify the accuracy of data obtained
from the grapevine. This helps in building a mutual trust based on open
communication followed through the organization or business.
112 Case: Closing the Fifth Floor
Corporate Communication

T he City Main Hospital, Cochin, was incurring losses, in spite of its

rising popularity and increasing number of outdoor patients. The
management has been thinking of doing something to solve the
problem. As the major burden of the heavy cost was due to the surplus
manpower, the simplest solution, according to the Hospital’s Executive
Director, was to reduce staff, especially, from the nursing department.
The hospital had five floors. The fifth floor was meant for keeping chronic
and old age patients’ under ‘observation’. Like all other floors, this unit had
80 beds with all the excellent facilities and round-the-clock services of 50
nurses reporting to Lily Joe, the Senior Nurse Manager.
The Executive Director knew that over the years, the fifth floor as
“observation” unit had been only partially utilized. For the last 20 months, the
floor had never served more than 6 patients at any given time. Naturally, the
floor with its huge staff was considered under-utilized and to a large extent, a
unit that could be dispensed with. The Executive Director, Dr. Pandey
discussed the matter with the hospital management and suggested that the
patients of the fifth floor could be kept in other wards and closing the fifth
floor could avoid recurring losses.
The management agreed to close the fifth floor and decided to terminate the
services of its senior manager Lily Joe as her services would be no more
required. The management asked Dr. Pandey to remove also those nurses,
who were specially appointed for the ‘observation’ unit because of their
experience and training in looking after the chronic and elderly patients.
A number of meetings with the senior executives were held to plan the closing
of the fifth floor. However, discussions brought out a few complicating factors
in this regard.
Firstly, it was pointed out that no permanent employee of the hospital could,
as per the hospital’s practice and service rules, be laid off. The hospital
followed the policy of ‘reassignment’ and not ‘removal’. The management
could close the fifth floor, but it could not remove the long-standing
employees working in the observation unit on fifth floor. Hence, the
management was committed to shift the fifth floor staff to other units having
positions for them, according to their suitability across the hospital; it was
believed that most of the affected staff could be suitably absorbed.
But, the senior managers from other units expressed reservations about the
possibility of moving the fifth floor employees to other units. According to
them, the fifth floor staff over the years had developed their own set and
habitual ways different from the ways of employees of other units. The fifth
floor nurses, for example, refused to accept to do anything more than what
was assigned to them. The staff had been idling since long. Therefore, they
lacked participative and cooperative attitude. Their senior manager Lily Joe
was generally considered least effective as a manager.
Because of all these reasons, the senior managers of all other units were most
unwilling to accept the proposal of reassigning the fifth floor workers to other
units. Both these complicating factors were conveyed to the management. To
resolve the problem, management decided to discuss the matter with all nurse
managers of the hospital administration. A series of meetings was conducted
Contd…
by the Vice-President of nursing, and attended by all ten of the nurse 113
Understanding Corporate
managers, including Lily Joe as well as General Manager of Public Relations, Communication
Director of Personnel and a Labour Relations Officer. Initially, the
management did not want Lily Joe to be included in these meetings as she was
personally concerned with the matter. However, the management considered it
would look proper if Lily was involved in the planning process of the lay-off.
In every meeting, Lily created a scene by crying and making all other
members present feel extremely embarrassed.
It was resolved that nothing discussed in the meetings would be revealed to
anyone until the final decision with regard to the closing of the fifth floor was
made. Every member of the meeting was placed under the oath of secrecy.
But soon, the entire hospital was full of rumours that the management had
decided to throw out long-standing workers and that the fifth floor was its
special target.
Anxiety, nervousness, whisperings spread across all the floors of the City
Main Hospital. Hysteria gripped the fifth floor.
Finally, to meet the situation a plan was developed. On the following Friday
morning, the Vice-President of nursing and the Director Personnel would go
to the fifth floor and meet the entire staff of the observation unit to inform
them about the plan of either shifting them to other units if so desired, for
whom positions in other units had been worked out, or the scheme of Golden
Handshake of parting with generous provisions of retirement benefits
specially created for the fifth floor employees who would be laid-off.
Immediately after this meeting, the same information would be announced at
a general meeting of all the hospital workers; simultaneously, the hospital’s
Chief Medical Officer (CMO) would hold a meeting of medical staff and brief
them about the plan of closing the fifth floor. On Wednesday, individual
letters signed by the Director General ‘would be sent to all employees so that
most would reach by Thursday morning and departmental meeting, “would be
held on Thursday afternoon. On Friday, the whole staff, in a general meeting,
would be informed about the scheme. On Thursday morning, a press release
on the generous golden handshake scheme of the City Main Hospital would
be organized with the media. Thus, by Friday, news about the hospital’s
generous action regarding the fifth floor employees would appear in the
newspapers and be known to all.
Two days before the action on the fifth floor was to take place, the
Vice-President of nursing met the Hospital’s CMO, Dr. Manoj Mehta and the
Chief Administrative Officer (CAO), General Khurana to review the plan
formulated in the meetings. The Vice-President nursing was astonished to find
both Dr. Mehta and General Khurana react to the plan negatively. Both
insisted on knowing exactly how many persons would be removed and who
all would be reassigned to different positions. But the Vice-President could
not know beforehand of the exact number of reassignments, as the nursing
positions always kept fluctuating every day, depending on the number of
resignations and new appointments. Dr. Mehta shouted, “Nursing never gets
its numbers right”. Besides, General Khurana violently reacted to getting the
letters to individual employees signed by the Director General. “We should
stop putting blame on the higher-ups”, he exclaimed. In fact, both made it
clear that they would not allow the things to move forward until the specific
numbers were worked out and the letter to the employees was redrafted.
Contd…
114 Meanwhile, the hospital’s grapevine was spreading like wildfire. Everyone
Corporate Communication
was talking about the fifth floor going to be closed in two days. Perhaps, the
fifth floor employees themselves had come to know about the closing of the
fifth floor. One of the fifth floor employees put an announcement on the
hospital’s computer network saying, “Through a most reliable source, it is
learnt that we the loyal and longest serving staff of the fifth floor are soon
going to be thrown out onto the street by the hospital. If you wish to help
support hurt persons, you could contribute to the charity fund, we are raising
for this purpose. Please send your donations to any fifth floor employee’s
home address.”
On Thursday, the fifth floor employees wore black armbands. They hung
black curtains in the patients’ rooms. The patients too were distressed to know
that they were going to be removed from the observation. Next morning,
confusion and tension overtook the fifth floor. While the management and
senior executives kept debating the number of workers to be retained and the
fine details of the effective communication plan, the fifth floor employees
were restlessly awaiting the orders of their termination. Every moment they
felt that they were going to be asked by someone to go home for good.
Gradually, the tension mounted and the situation became unbearable. One
nurse grew hysterical and started crying loudly. Some other nurses began
sobbing and clinging to one another.
The news of the fifth floor’s complete breakdown spread across the hospital.
The Director Personnel came up. She saw what was happening. With the help
of G.M. Public Relations, she made the fifth floor employees go home, and
organized the shifting of fifth floor patients to other wards on other floors.
The following day (Saturday), The Executive Director announced that the
City Main Hospital had closed The Fifth Floor.
Questions
1. Analyze the reason for spreading of rumours of the layoff of the
observation ward staff.
2. Was it correct to include Lily in the initial discussion meeting?
3. Ideally, how should this situation have been handled?
Source: Based on John E. Baird, Jr’s Employee Layoffs in Organizational Communication, U.S.A., Houghton Mifflin
Company 1997

5.11 LET US SUM UP

Communication is the nervous system of an organization. It keeps the members of the
organization informed about the internal and external happenings which are relevant
and of interest to the organization. Communication facilitates all the functions of
management, including planning, organizing, instructing, co-ordinating and
controlling.
Informal communication that follows through chat and grapevine operates in addition
to the official channel, i.e., people has casual conversation with their friends in the
office. The grapevine should be used by the management when there is a free and
open system of communication in the organization.
Every organization endeavours to organize its communication system in its own way.
The main patterns of communication or communication ‘nets’ are ‘wheel/Y’, ‘circle’
and ‘all channel’. Each of these patterns has its own advantages and limitations.
Psychologists and management experts have, in recent years, done exciting research
on organizational communication. There are many factors influencing organizational 115
Understanding Corporate
communication, significant being the formal authority structure, job specialization and Communication
information ownership.

5.12 LESSON END ACTIVITY

Analyze the type of communication that you follow or have followed as a student
while communicating with your friends, seniors and principal. Is there any difference?

5.13 KEYWORDS
Corporate Organization: It is a system consisting of a large number of people
working together in a structured way to accomplish multiple goals.
Forecasting: It is a planning tool that helps management in its attempts to cope with
the uncertainty of the future, relying mainly on data from the past and present and
analysis of trends.
Grapevine: The informal transmission of information, gossip, or rumor from person to
person.
Human Capital: The skills, knowledge, and experience possessed by an individual or
population, viewed in terms of their value or cost to an organization or country.
360 Degree Feedback: Individual performance feedback that comes from all levels
around the recipient, including subordinates and peers as well as the traditional
supervisory feedback.

5.14 QUESTIONS FOR DISCUSSION

1. Management is the art of getting things done through others. What role does
communication play in this?
2. What are the factors that influence organizational communication?
3. Define grapevine. What are its advantages and disadvantages?
4. ‘There can be various patterns of communication within an organisation’.
Comment
5. Discuss the new trends in organizational communication due to socio-
technological changes and developments.
6. Discuss the ways to improve corporate communication.

Check Your Progress: Model Answers

CYP 1
1. False
2. True
3. False
4. False

Contd…
116 CYP 2
Corporate Communication
1. decisional
2. coordinating
3. grapevine
4. probability

CYP 3
1. Discriminating, appreciative and empathic
2. Skills of those people who use them at both ends of the communication
channel

5.15 SUGGESTED READINGS

PD Chaturvedi, Mukesh Chaturvedi, Business Communication, Concepts, Cases and
Applications, 2007, Pearson Education
Bovee, Thill, Schatzman, Business Communication Today, 7th Edition, Pearson
Education.
Brown L., 1982, Communicating Facts and Ideas in Business, Prentice Hall Engelwood Cliffs,
New Jersey.