12 markseasy
(a)
Identify two reasons why effective internal communication is important for a business.
Business
17 questions · 96 marks · ≈ 2 hours
Identify two reasons why effective internal communication is important for a business.
Outline one advantage and one disadvantage to Gloria of using telephone calls as a method of communication with her employees.
[case-study] Gloria is a sole trader. Her business provides house-cleaning services. Gloria uses telephone calls to communicate with her 4 employees. She wants to expand the business by offering a repair service. Gloria plans to carry out some market research. She has been told producing a business plan can help reduce risk. Gloria would also like to reduce her workload and is considering taking on a business partner.
Define 'external communication'.
Identify two factors that may influence the choice of communication method chosen by a business.
Define 'one-way communication'.
Outline two forms of written communication Gloria could introduce to improve record keeping in her business.
[case-study] Gloria is a sole trader. Her business provides house-cleaning services. Gloria uses telephone calls to communicate with her 4 employees and her customers. Sometimes she forgets to call customers back and risks damaging her business reputation. There have been incorrect invoices sent to customers in the past.
Outline two barriers to communication that TFN may experience.
[case-study] TFN is a travel business which sells holidays. It has 37 shops and 1000 employees. Last year TFN’s profit increased to $46 million. The Managing Director knows that good communication is essential to maintain customer loyalty.
Explain two possible communication barriers that might exist at SWB.
[case-study] SWB is in the secondary sector. It produces 150 000 wooden bookcases each week using batch production. SWB sells all its output to one customer. Quality control is important. SWB has 240 employees, of which 100 are part-time workers. SWB’s managers use noticeboards around the factory and meetings with employees every month to help reduce communication barriers. The Operations Manager is considering introducing just-in-time inventory control to reduce the amount of waste.
Explain two reasons why effective communication might be important to BGR.
[case-study] BGR is a private limited company. It operates 6 cinemas in different towns. Effective internal communication is important for BGR. The Finance Director has been analysing BGR’s accounts and an extract is shown in the below table. BGR plans to open another cinema and will need to recruit 10 new employees. The new cinema will cost $8m. The Finance Director has to decide whether BGR should issue new shares or use a bank loan to finance the expansion.
Extract from BGR’s Income statement for year ending 2020 ($000’s) Revenue X Cost of sales 180 Gross profit 720 Expenses Y Profit 400
Explain how MBH might reduce or remove each of the following communication barriers:
[case-study] MBH is a business organisation in the public sector. It controls 5 hospitals and has 5600 employees including 440 doctors. External recruitment is used when recruiting skilled employees. The Human Resources Director uses ideas from Herzberg’s theory to improve employee motivation. He is worried about communication barriers within MBH. The business has a tall organisational structure and a long chain of command. Most of MBH’s internal communication is by email and phone calls.
Explain two methods of internal communication a large business could use to share important information with its employees. Justify which method should be used.
Explain four barriers to communication for a business.
Explain two possible methods of internal communication that a small business could use to inform workers about a possible expansion. Justify which method should be chosen.
Explain four reasons why effective communication between the owner and employees in a business is important.
Do you think having regular meetings is a better way for a business to communicate with part-time employees than using text messages? Justify your answer.
Extract:
{align=center} Furniture Outdoors (FO)
FO has been a private limited company for 20 years. It is owned and run by the Chan family and is located in country Z. In country Z the secondary sector has become relatively more important as the country has developed. FO is a manufacturer of wooden furniture that is suitable for outdoor use. Its products include tables, chairs and other outdoor furniture.
Customers order online from the FO website. The furniture is then delivered to customers in country Z using FO’s own delivery vehicles. However, FO is considering changing to selling its furniture through either wholesalers or large retailers in country Z.
The Chan family have the business objective of contributing to sustainable development. FO only uses sustainably sourced wood when making furniture. This is from local forests in country Z and the wood is more expensive than imported alternatives.
For many years FO shareholders have reinvested profits to provide the finance for growth. FO recently took over 2 other furniture businesses in country Z and plans further takeovers. The Chan family plan to continue to control and manage FO after this expansion. The leadership style of these two companies is very different to that of FO and their factories are located several miles away from FO in different regions of country Z.
FO need to manage all its resources effectively. It tries to use the same components such as nails, brackets and paint for all its furniture designs. It is important to not run out of raw materials and so orders to suppliers must be carefully planned to avoid late deliveries. FO want to keep wastage of materials to a minimum. FO also need to consider how many employees are required to complete each order.
{align=center} Appendix 1 - FO website advertisement
FO - the only business to go to when you need new outdoor furniture for your garden.
FO produce a range of high quality furniture to meet all your needs for fashionable, well designed outdoor furniture. Be reassured our furniture is only made from the highest quality wood from sustainable forests.
Our furniture is only available online so order today and have your furniture delivered in the next few weeks. Email any questions to us and we will reply quickly.
{align=center} Appendix 2
{align=center} Extract of cost, selling price and sales data for one of FO’s products
| Fixed cost per month | $10 000 |
|---|---|
| Variable cost per table | $125 |
| Selling price per table | $250 |
| Forecasts sales for tables per month | 100 |
{align=center} Appendix 3
{align=center} Newspaper article from the Daily News April 2021
{align=center} Sustainable production needed to save the planet
A report from the International Committee for the Planet states that manufacturers must find more sustainable ways to produce their products as global warming is becoming more of an issue.
The report suggests three main ways manufacturers can change:
Consider the benefits and limitations of the following three methods of communication FO could use.
Which method of communication would be most suitable when contacting suppliers about a late delivery? Justify your answer.
Refer to the following insert when answering the question
Extract:
Sports Safety Equipment (SSE)
SSE manufactures sports safety equipment in country Z. It is a public limited company which has been successful for over 30 years. The main product SSE manufactures is safety helmets for different sports, such as bicycle riding, cricket and skateboarding. SSE has one large factory making the safety helmets. The factory uses flow production. The production workers each specialise in one task on the production line. SSE’s raw materials are imported.
SSE sells its helmets in several other countries and is planning to expand into many more. It will need to carry out market research before entering new markets in other countries. Each country has different sports that are popular and the style of helmets varies from country to country.
SSE plans to build its own factories in its most important markets in other countries and will need to choose a suitable source of finance. The Human Resources Director has decided to use internal recruitment for the managers of the new factories. There will need to be effective communication between the managers of the new factories and SSE’s head office in country Z.
Most of SSE’s sales in country Z are through sports equipment shops. Customers like to try on the helmets to check they fit correctly. SSE currently sells its helmets in other countries through its website.
SSE is also increasing its product range. The latest new product being developed is a children’s cricket helmet. A break-even chart for this new product is shown in Appendix 3.
{align=center} Appendix 1
{align=center} Extract from SSE’s website
{align=center} If you want the best protection when playing sport then buy an SSE safety helmet!
{align=center} We supply a wide range of safety helmets for you when playing sport.
{align=center} Whatever the sport - SSE produces a helmet for you.
{align=center} You can order directly from this website by entering your head measurements below.
{align=center} Get the perfect fit for you!
{align=center} Appendix 2
{align=center} Email from SSE’s Managing Director to SSE’s Finance Director
To: Finance Director
From: Managing Director
Date: 1 September 2023
Re: Demand for SSE’s products Demand for SSE’s products in country Z is forecast to increase. Our government has imposed import tariffs on safety helmets. We may be able to increase our prices.
The exchange rate in country Z is expected to fall. However, other countries have introduced import quotas on safety helmets.
We will have to consider all the likely effects of these changes.
{align=center} Appendix 3
{align=center} Projected weekly break-even chart for SSE’s new children’s cricket helmet
{align=center} The maximum output and sales for this product is 1000 units per week.
Consider how the following three barriers could make communication less effective between SSE’s head office in country Z and its new factories in other countries.
Which barrier would be the easiest to overcome? Justify your choice.
Refer to the following insert when answering the question