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4 Management Communication:

Written Channels

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Learning Objectives

After reading this chapter and studying the materials, you should be able to:

1. Successfully communicate brief formal messages. 2. Recall the essential elements of effective proposals. 3. Prepare effective formal reports. 4. Overcome the barriers to formal communication.

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Poor communication processes may have contributed to the oil spill in the Gulf of Mexico.

4.1 Brief Messages Learning Objective # 1: How can managers successfully communicate brief formal messages?

The written word remains a powerful component of everyday business. In the past few decades, the media used to transmit formal written messages have evolved rapidly. The basic principles of effective writing, however, continue to be the same.

Written messages offer several advantages. First, a manager can carefully choose the words prior to transmitting the message, which allows for editing and rewriting, ensuring the highest level of precision in the language. Second, media such as email and instant messaging allow receivers to view the messages when it is convenient, which can save time, especially when compared to telephone "tag." Third, a written message provides an of�icial record. A manager can save a copy of what he or she wrote for future purposes, including remembering exactly what was written and in what context.

In the previous chapter, four steps to effective formal communication were proposed. These principles apply to both verbal and written messages.

1. Assess the Communication Environment 2. Establish a Message Format 3. Develop the Message 4. Authenticate the Approach

In this chapter, three levels of messages are examined: brief, moderate, and full-length formal reports. Table 4.1 provides the formats for each of these messages.

Table 4.1: Types of messages and media

Brief Moderate-Length Full-Length

Memo

Email

Instant message

Letters

Proposals

Reports

For Review

What media are available for transmitting brief, formal, written messages to employees? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.

Memos, email, letters, and instant messages.

Trouble in the Gulf

The 2010 oil spill in the Gulf of Mexico produced one of the greatest environmental disasters in history. Eleven people were killed in the initial explosion of the Deepwater Horizon drilling rig, and oil then �lowed for the next 87 days. Birds, sea turtles, dolphins, and countless other forms of wildlife suffered. Although British Petroleum (BP) had run television advertisements claiming the end of the impact of the spill, new dead dolphins and sea turtles were found in 2011.

The economic effects included lost revenues from the �ishing industry, reduced tourism rates along the Gulf Coast, and the loss of nearly 4,000 jobs in early 2010. Real estate values declined by more than 10 percent, leading to losses estimated between $648 million and $3 billion for the following �ive years after the disaster (oceana.org, 2011).

Among the causes of the disaster were failures in formal communication systems (Rascoe, 2011). The primary targets of lawsuits related to the spill,

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BP, Transocean, Cameron International Corporation, and Halliburton Energy Services, failed to communicate internally and with other organizations. The resulting problems with cementing procedures on the rig, the blowout preventer that failed to engage, and the failsafe "dead man's switch" that had a dead battery and could not operate properly, were all identi�ied by various paper trails. One employee told the BBC television network that a leak was spotted on a crucial piece of equipment in the rig's blowout preventer weeks before the explosion, and that Transocean and BP had both been noti�ied about the problem by email (Andersson, 2010).

BP reported that rig managers misread pressure data and gave their approval for rig workers to replace drilling �luid in the well with seawater. The water was not heavy enough to prevent gas that had been leaking into the well from �iring up the pipe to the rig, causing the explosion. Another investigation questioned why an engineer and supervisor with BP ignored warnings about weaknesses in cement outside the well which could have prevented the gas from escaping. The conclusion was that BP was partly to blame, as was Transocean, which owned the Deepwater Horizon rig (Bates, 2010).

These and other failures to transmit and process important safety information have vili�ied BP and left long-standing problems for those in the region. Health concerns of recovery workers have begun to surface. Many decades will pass before the full impact of this disaster will be known.

Questions for Students

1. When an employee spots a major safety problem, what form of written communication should be used? 2. When a manager identi�ies potentially life-threatening safety �laws, what should the manager do in response? 3. Do you believe the companies involved were merely incompetent, or actually unethical in how each contributed to the disaster? Why?

Memos

In today's increasingly paperless society, fewer printed memos are composed and distributed. In their place, as will be noted in the next section, emails transmit the same information. At times, however, a paper memo serves the purpose of creating a more permanent record of an internal correspondence. A memo opens with four elements: To, From, Subject, and Date. A subject line that attracts attention and presents a distinct idea or topic adds value to the memo and will most likely capture the receiver's interest.

Memos begin with an overview paragraph that spells out the nature of the memo. An overview should be clear, easy to understand, and brief, but it should also encapsulate the entire nature of the memo. Examples of overview paragraphs are displayed in Table 4.2.

Table 4.2: Memo overview paragraphs

1

Following an in-house survey of employee needs, human resources strongly recommends the establishment of an on-site day care facility. More than 30% of our employees have children between the ages of 2 and 5. An on-site day care playroom should reduce employee absenteeism and tardiness rates due to problems with �inding babysitters or other caretakers. The unused stock room on the second �loor can be renovated to provide such a facility in 90 days at a cost of $40,000. We would like your opinions about this recommendation.

2 The marketing department recommends extending the current rebate program for the Sony Bravia line of televisions. Sales increased by 12% over the previous year's �irst quarter totals with the program in place. We would like management's permission to authorize the rebates and supporting advertising materials.

3 You have now received the company's revised policy regarding Con�licts of Interest. Instructions for completing the form and answers to the most often asked questions are contained in this memo.

Memos serve two major purposes: to provide information and to call for action. Informational memos should be limited to one subject, provide suf�icient detail, explain any ambiguities, and offer facts rather than opinions (Bell, 2004). Informative memos serve three purposes:

con�irm an agreement provide facts and information about an event or process summarize the results of a meeting or conversation

Calls for action include the reason for the action, the plan of attack, and deadlines or goals. Suf�icient detail should be provided so that the recipient knows what to do, and when. Calls for action can be categorized as:

requesting assistance providing direction requesting approval to pursue an activity

A well-written memo is concise, complete, accurate, easy to read, and carefully edited (Northern Kentucky University, 2007). The number of memos transmitted in organizations will likely decline. Managers increasingly ask themselves whether the issue involved contains suf�icient magnitude to merit a paper presentation. If not, an email might suf�ice.

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Email

Email presents several major advantages for brief formal communication messages. Employees can communicate from different locations without making calls (Weeks, 1995). Although this may seem strange, some evidence suggests that voice mail messages and regular phone calls can make workers apprehensive, partly because phone calls do not allow for a sense of closeness due to the inability to observe nonverbal signals (Reinsch et al., 1990; Reinsch & Beswick, 1990).

Email allows virtual teams to coordinate projects and schedule activities. Collaborations are possible on projects, even when the individuals involved reside or work in distant locations. In some organizations, email creates a channel of upward communication, as many top managers invite employees to contact them through the channel. Email provides a venue to send out information downward or laterally to sets of employees through bulk messaging, taking the place of what used to be paper memos.

Email systems can also contain disadvantages. The most notable, being bombarded with messages, results from the relative ease with which messages can be composed and sent. Even with the most sophisticated sorting programs, email systems often allow unwanted messages or spam to reach employee inboxes, creating distractions and wasting time deleting unwanted communications. Employees should also understand that the company owns the email and the Internet on the job, giving management the right to inspect their use. This means they are not private—a paper memo can be thrown away, but an email message will be backed up on a company's servers and can often never be permanently deleted.

For Review

What are two main purposes of memos and emails? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.

Provide information and call for action.

Effective Email Usage

As with any other formal communication channel, email can be misused or can serve as an effective means of connecting employees. Managing email as a communication system requires two key elements: managing the system and composing effective messages (see Table 4.3).

Table 4.3: Managing email

System Issues Message Issues

Create logical �iles Delete or archive unnecessary messages

Protect sensitive documents Don't forward funny or super�luous emails that waste time

Keep the system clean Assume messages will be available to everyone Carefully construct messages

Users should create a logical system of �iles that match their jobs. Files can be set up by user groups, by projects, or in any way that allows you to quickly recall where to look for an old message and to place new messages. The idea is to have a system that facilitates work.

Protection of sensitive documents entails the assistance of information technology experts to develop encryption systems. It may be impossible to completely eliminate the possibility of a system being hacked; this means it may be wise to take the most-sensitive items of�line and print hard copies to be stored elsewhere.

Keeping the system clean includes consistent emptying of the trash �ile and systematically placing all unwanted and unnecessary messages into trash �iles. An updated system allows for less scrolling through unneeded old emails.

While managing messages, delete items that have no relevance to the job without reading them. Far too much time can be wasted examining spam. Resist the temptation to forward that funny little play on words or images that made you laugh. These items fritter away company time in unproductive ways. Ask email partners to refrain from forwarding such emails to you. Management can inspect all messages; you should assume that anything you send or receive could be more widely available (Conlin, 2002). With regard to constructing messages, follow the various rules shown in Table 4.4. Remember that email messages contain the same elements as memos: To, From, Subject, and Date.

Table 4.4: Rules for writing effective emails

Organize your thoughts prior to writing

Use good rules of grammar

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A new set of opportunities and problems has emerged from instant messaging and social media technologies.

Use bullet points, underline, and bold to clarify messages

Re-read the message before sending it

Carefully word the subject line to attract attention

Send the message to only those who require the information

Avoid mass broadcasts

Make sure email is the right channel

Avoid sending messages in all capitals, which is the equivalent of screaming

Sources: Baude, Dawn-Michelle (2007). The executive guide to e-mail correspondence. Franklin Lakes, NJ: The Career Press. Clow, K. E., & Baack, D. (2010). Marketing management: A customer-oriented approach. Los Angeles, CA: Sage Publications, p. 277. Gomez-Mejia, L. R., Balkin, D. B., & Cardy, R. L. (2005). Management: People, performance, change (2nd ed.). Boston: McGraw-Hill Irwin, p. 632.

When used improperly, email wastes time, distracts people from work, and reduces productivity. When managed properly, email represents an ef�icient method of maintaining contact when face-to-face interactions are not possible, offering the ability to create precise messages and responses as well as facilitating the efforts of employees (Baude, 2007).

Instant Messages/Texts and Social Media

Email, instant messaging, and social media are not the same. Instant messaging systems, such as MSN Messenger, combined with mobile phone technologies, make it possible to send messages to employees nearly instantly. A new set of opportunities and problems emerges from these venues.

In terms of opportunities, text messages offer the advantage of real-time, on-the- ground reporting during sales presentations or observations of other activities while not �illing up employee and manager email inboxes. In terms of internal formal communications, setting up group texts speci�ically for the purpose of communicating with staff members can help any business owner in a number of situations. One example is when an employee cannot attend work. The company can send out a text message to all employees, asking someone to come in and cover the shift. Sending a text message can be more effective than sending an email that people might not read in time. It also saves the effort of calling people to come in (Zorawski, 2010).

Harmon (2003) notes that email became part of the working environment after companies began to train employees in its use. In contrast, instant messaging in�iltrated the workplace from the bottom up, through entry- and lower-level employees. In response, for example, IBM offers a service IMing for businesses to use for internal communications.

In terms of problems, many of today's younger employees respond more quickly to texts than to any other medium, stopping what they are doing (including having a face-to-face conversation with someone) to read and answer a text. This is generally seen as rude, and treats the in-person contact as less important than whomever sent the text.

The relatively recent emergence of instant messaging means that company leaders have established fewer �irm guidelines for its use. In part, the uniqueness of the technology has opened lines of communication between top management of�icials and rank-and-�ile employees (Internal Communication Evolution, 2009). Lines of what would be considered formal communication and informal gossip are increasingly blurred, as employees use the same technology for both activities, sometimes within the same message. The use of acronyms and other abbreviations further complicates what will be considered effective and ineffective messages sent by text or tweet.

For now, the basic guidelines for instant messaging follow some of the suggestions for email. Speci�ically, recognize that management can monitor the messages, that the recipients can store anything you send, that careful wording is important, and that overuse of the technology for "play" constitutes unethical time theft in the same way as sur�ing the web for pleasure on company time.

The use of social media on the job has also increased. Programs such as Twitter can be used effectively to communicate with customers by sending out daily offers and deals or by allowing customer service representatives to interact with people who are shopping in a store. Many advertisers are just beginning to discover the potential of social media as a marketing tool.

At the same time, employees should be careful not to become overly dependent on social media outlets, because this can lead to wasted time and lower productivity. Too often, banal and unnecessary messages travel across such channels, and employees spend valuable work time reading and responding to them.

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For Review

What is the main difference between emails and text or instant messages? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.

The speed at which messages are received.

Letters

The use of formal letters has become less common; however, it remains an important formal management communication tool. A letter will be perceived as more of�icial, having more weight, and inferring a sense of authority. Letters accompany crucial company information and activities, such as �inancial reports, legal issues, or project strategies where greater message complexity is common. Letters offer the advantage of remaining private, as opposed to email or text messages. Letters can also create the context of greater sensitivity, expressing concern or appreciation. Letters establish a permanent record of the correspondence (Bell, 2004, pp. 79–92).

The disadvantages of letters include greater time involved in preparation. Letters sent in mass mailings are costly. A letter takes a greater amount of time to arrive, often days. Managers should make sure time-sensitive information in a letter arrives when needed. Also, a letter should not be sent when a personal contact, or one with greater information richness, is required.

Letters are sent to internal publics for formal messages of greater importance, such as a letter of appointment, a formal request of a department or manager, or a letter of resignation. Letters are composed for external audiences for a greater number of purposes. The standard elements of a letter are displayed in Table 4.5.

Table 4.5: Elements of a letter

Letterhead Created by the company or by an individual, often incorporating a logo and the company's address and contact information.

Heading Their address and the date underneath the organization's letterhead.

Inside Address

Name and address of recipient.

Subject Line Topic of the letter. May include a project name or account number.

Salutation Greeting, typically "Dear" or "To the Employee Bene�its Committee" or an attention line, such as "Attention: Customer Service."

Body The main message, generally single-spaced with double-spacing between paragraphs. Use one space between each sentence (not two).

Closing For more formal letters, usually, "Sincerely," "Sincerely yours," or, "Respectfully." For more personal letters, "Best wishes," or "Warm regards."

Signature First a signed version then a typed version.

Notations Initials of the typist or keyboard operator, names of the people sent copies.

Some of the more common reasons for sending letters include: (1) making a request, (2) agreeing to a request, (3) delivering news, (4) as a cover for additional documents, (5) as a formal apology, and (6) to make a persuasive argument. Of these, persuasive letterwriting appears to be on the decline, with other media being used instead. The logic is simple: A letter takes time to read and to frame a response. Many of the more immediate technologies allow for more of a dialog or conversation. Companies do now incorporate letterhead templates in emails, making a more formal presentation, to match the nature of a letter written on a printed page.

Effective letter-writing requires a balance of writing skills and visual presentation effects. Readability guidelines for letters are provided in Table 4.6. Many of these principles apply to other writing venues as well.

Table 4.6: Readability tools

Consistency A well-written letter is consistent in the use of margins, typeface, and other visual elements. Stay consistent with these within one letter, and from letter to letter.

Balance Make sure the letter balances on the page, from top to bottom and left to right.

Restraint Keep the design simple. Do not overuse color or special print.

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White Space

Allow white space in the margins and between elements of the letter. Double-space between paragraphs. Make sure the letter does not appear "busy" or cluttered.

Margins and Justi�ication

Typically letters are left-justi�ied with either a ragged-right margin or right- and left-justi�ied. Rarely will a letter use centered justi�ication, although a key statement may be set aside separately and set in center justi�ication within the body of the letter.

Typeface Match the typeface to the nature of the industry. The entertainment industry tends to prefer New Courier, and publishing houses use Times Roman. Other popular fonts include Calibri, Verdana, Arial, Book Old Style and Rockwell.

Type Style For emphasis, italics and boldface are popular devices. At times a writer may prefer underlining, or the use of color.

Source: PlainLanguage.gov (2011). Writing effective letters. http://www.plainlanguage.gov/howto/guidelines/letters.cfm (http://www.plainlanguage.gov/howto/guidelines/letters.cfm) , retrieved July 15, 2011.

The most important component of a business letter will be its actual content. Managers take the time to carefully choose the exactly appropriate words and phrases. Letters that "run on" or that contain numerous grammatical or spelling errors are often quickly dismissed. Careful rewriting and copy-editing should be employed before �inalizing the version that will be placed into the mail system. Examples of standard business letters appear in Figure 4.1.

For Review

What elements should appear in both internally and externally directed letters? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.

Letterhead, heading, inside address, subject line, salutation, body, closing, signature, and notations.

Figure 4.1: An internal and an external letter Examples of internal and external letters are shown.

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Letterhead

July 7, 2012

Robert Johnson, COO, Adhesives Division 3 Q Adhesives and Magnetic Tape Company 3311 Main Street Albuquerque, New Mexico 55555

Re: Internal prices of packing tape sent to Magnetic Division

Dear Robert,

Greetings from Minneapolis. We in the magnetic division hope your division is doing well. Several members of our team wish for the great weather you have been enjoying this spring, as we endure continuing snowstorms. Who says location isn't everything?

The purpose of my correspondence is to ask for a meeting to discuss transfer prices for packing tape and other materials that your division ships to us. In the past, the method used for setting these prices was based solely on production costs, with the standard internal companywide mark-up to allow for the necessary pro�it margin.

As you know, the industry trends, coupled with the recent economic downturn, have affected our unit. At the same time, we have come to understand that the internal prices charged by your division to ours now re�lect production costs plus a contribution to overhead fee per shipped pallet, along with the mark-up, which now re�lects the standard percentage but is based on the total costs of both items. This change has made it increasingly dif�icult for our division to remain pro�itable without raising our wholesale prices, at a time when demand has declined.

Two concerns arise from this situation. First, we were not noti�ied about the internal pricing change or about the process for making the change. We are disturbed by not being included in the decision. Second, we have not changed the internal price our division charges to yours for items sent in your direction. It is our position that this is inequitable.

I would be willing to meet with you individually, or with members of the top management group. It is not my intention to start a "turf war" or any other dispute, but rather to �ind a solution that we both agree is in the company's best interest, in addition to the interests of our own divisions.

Please respond at your convenience. I look forward to visiting with you and �inding an agreeable resolution to this issue. Give my best to the others in your of�ice.

With warm regards,

Steve Johnson, COO Magnetics Division

sas

cc: Barry Roberts, CEO

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Typically, a letter will be perceived as more of�icial, having more weight, and inferring a sense of authority.

Letterhead

January 10, 2012

Suzanne Lockwood, President Lockwood Designs 2430 North Central Expressway Dallas, Texas 55555

Re: Unauthorized use of Rebecca's Diet Center parking spaces

Dear Ms. Lockwood:

It has come to our attention that, for several months, our parking spaces have been �illed with vehicles of customers who are shopping in your store. As you know, our tenant agreement allows for eight designated spaces in the front of our business, and they are to be used only by our clients.

We believe that your customers park in our spaces because of the afernoon shade provided by the building. They choose to park in our spots, even though the spaces are clearly designated for our purposes. This forces our clients to park away from our shop and closer to yours. Many times, these clients need to carry boxes of prepackaged food to their cars.

Our company likes to think that we are good neighbors with all of the other businesses in this location. When we discover that clients have done something that might disturb other �irms, we quickly ask them to stop. We are hoping that you will extend this same courtesy to our company.

When convenient, please respond to our request. Our goal is to resolve this problem without the need for further action.

Please contact me personally if you have questions. Thank you for taking the time to consider our request.

Sincerely,

Rebecca Jones,

Owner, Rebecca's Diet Center

sw

Information Richness and Brief Messages

In the previous chapter, the concept of information richness was introduced. By their natures, written channels are leaner. They offer fewer opportunities for visuals, save for charts, �igures, and photographs. At the same time, selection of the written channel provides some measure of the gravity of a message. A formal letter normally will produce a greater impact than a quick text.

Instant messaging offers the advantage of quick transmission and often a rapid response. Emotions are conveyed using the various acronyms available (OMG!). Email contains some of the same elements, along with its own special codes ; - ) .

The fast pace of today's business world dictates the use of electronic media in many circumstances. Memos and letters will typically be reserved for serious matters. Four criteria used in selecting the appropriate technology include sensitivity, negativity, complexity, and persuasiveness. A sensitive message evokes an emotional response. The more sensitive the message, the richer should be the information channel. More negative messages, such as turning someone down for a promotion or telling an employee someone else will lead a project, also merit richer channels. Complex messages that take time to digest may be better served by leaner channels, in which information can be read and re-read, such as the proposals and reports described in the upcoming sections. Persuasive messages require greater information richness.

Concept Check

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4.2 Medium-Length Messages: Proposals and Short Reports Learning Objective # 2: What are the essential elements of effective proposals?

Numerous messages contain more information than can be sent in a brief format but less than would be required for a full-length report. These types of formal communications describe something that has happened; coordinate something that is happening; or suggest something that should happen. Medium- length messages include proposals and short reports.

Proposals indicate what might happen or could happen, should the initiative be accepted. Internal proposals are documents that recommend changes to a company's operations to solve a problem or in regard to purchases to be made. External proposals are offers made to other companies to provide products or services in exchange for a price or fee. External proposals may be solicited by other companies, which means a request for proposal (RFP) has been sent. These can also be called an RFI (request for information). Unsolicited proposals are sent at the vendor's initiative to potential customers.

Proposals can be submitted on paper, in a word �ile, or in electronic formats that include a pdf (portable document �ile, invented by Adobe), an Adobe InDesign �ile, an Apple Keynote �ile, or a Microsoft PowerPoint �ile. Elaborate proposals can be supported with multimedia presentations including video clips, animation, software slices, and screencasts. In some industries, these proposals are referred to as "decks." Table 4.7 indicates the common elements in proposals.

Table 4.7: Components of a proposal

Proposed Idea and Purpose The project description

Scope What will and will not be done

Visuals Pie charts, graphs, tables, etc., throughout or at end

Methods and Procedures Includes steps to be taken

Materials and Equipment Needed Based on the type of project

Quali�ications of Personnel Those who will be working on the project

Follow-up or Evaluation How project completion and success will be judged

Budget or Costs Financial implications

Summary of Proposal Brief restatement of purpose

Appendices, If Appropriate Sources, visuals, glossaries, etc.

For Review

Brie�ly describe internal proposals, external proposals, and request for proposal (RFP) documents. (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.

Internal proposals are documents that recommend changes to a company's operations to solve a problem or in regard to purchases to be made. External proposals are offers made to other companies to provide products or services in exchange for a price or fee. Other companies may solicit external proposals, which means a request for proposal (RFP) has been sent.

External Proposals

When a company receives an RFP, the message indicates that the buyer or company that has made contact has suf�icient con�idence in a �irm's ability to invite a bid. In this circumstance, the proposal becomes mostly a mechanism designed to explain why the company offers the best solutions and is most quali�ied to solve a problem, with merchandise or expertise (Murray, 2008). A company sending out unsolicited proposals must �irst explain why the recipient has a problem and needs outside assistance. Then the company can provide details regarding the reasons why it offers the best alternative for solving the problem.

Both solicited and unsolicited proposals are more than mere sales tools; they should be designed to build relationships. Even when a company fails to win a contract, the possibility remains that the two organizations will become involved in the future. Carefully prepared external proposals create a sense of competence and professionalism that carries over from one transaction to the next. An external proposal format is provided in Table 4.8.

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George Doyle

A concise and succinct proposal has the best chance of being accepted.

Table 4.8: Format for an external proposal

I. Introduction

Background or statement of the problem

Solution

Scope

Proposal organization

II. Body

Facts and evidence

Approach (scope and methods)

Work plan (methods, procedures, steps, resources needed)

Quali�ications

Costs

III. Close

Review of argument—brief summary

Review of reader bene�its—how this helps the recipient

Review of merits of the approach—why sender is more effective than others

Restatement of quali�ications

Request—ask for a decision

IV. Additional Materials (these can be woven throughout as well)

Graphs

Tables

Pie charts

Monetary information

When preparing an external proposal, several key concepts guide the writing. First, the proposal should submit one core idea, which may be repeated throughout the document. A proposal from a company offering a pension management plan should reinforce the key message, such as that the system will reduce costs or will offer �inancial stability.

Second, the proposal focuses on the recipient's needs rather than the sender's needs. The essence of the proposal is to solve a problem or assist the recipient in some way. Also, the terminology should match the recipient's business and industry (Pugh & Bacon, 2005).

Third, a proposal explains the recipient's problems or issues in the present tense, such as, "Your current health insurance plan fails to provide for many employees. We can do better without raising premiums or reducing services." Then the future will be addressed after the proposal has been accepted, using sentences such as "The work to be done would take place. . ."

Fourth, language in the proposal should be positive. Explaining a company's superior materials and personnel concentrates on the organization sending the proposal.

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Denigrating the competition turns the tenor of the proposal toward the negative. In essence, focus on why your company is great rather than why other �irms are bad.

Finally, a concise and succinct proposal has a better chance of being accepted. Wordy, rambling proposals waste the recipient's time and are harder to follow. Careful evaluation of the message includes making sure the proposal gets to the point, stays on point, and is easily recalled (Sant, 2004). Figure 4.2 provides an example of an external proposal.

For Review

What are the four major sections of an external proposal format? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.

Introduction, body, close, additional materials.

Figure 4.2: Example of an external proposal External proposals are more-elaborate attempts to communicate with outside organizations or individuals.

Letterhead

March 1, 2012

To: Midland Of�ice Supply

From: All-American Energy Solutions

Subject: Addition of solar panels and other energy ef�iciencies

In response to your request for information regarding the installation of new, energy-ef�icient building properties, All-American Energy Solutions stands ready to design and install a complete program for your company.

Energy costs continue to rise. These costs affect your company's ability to keep prices low and to compete with other providers in the area. Our system reduces building energy consumption by an average of 40 percent per year. When combined with our payment plan, Midland will realize monthly costs savings immediately, and the system will pay for itself in about 15 years.

All-American Energy Solutions offers solar panels, energy-ef�icient heating and cooling systems, and window replacements to achieve these cost savings. For your building, total installation time for an energy-saving system would be one month. Midland Of�ice Supply would be able to remain open while these improvements were being made.

This proposal explains how solar ef�iciencies save money and how we would install your system. The credentials of our service technicians are provided. Cost estimates and payment plans are also included.

Energy Facts

The energy system currently used by Midland Of�ice Supply is more than 20 years old. The energy system operates at 80 percent of ef�iciency. Our estimate, based on information provided, is that your system costs $2,000 per month to operate electrical, heating, and cooling systems. All-American's solar panel system reduces the need for outside electrical sources by 40 percent. All-American's ground-source heat pumps reduce the cost of heating and cooling by 20 percent. Heat pumps also reduce energy costs associated with hot water, by preheating water before it reaches your water-heating system. All-American's window systems reduce heat loss in the winter and heat from sunlight in the summer. We project that, by installing our system, on-average, per-month energy costs will be reduced to $1,000 per month.

All-American Energy Solutions will provide the following work:

Step 1: Install 20 solar panels, focused to achieve the highest level of solar energy on the roof. Estimated work time: 4 days.

Step 2: Remove old heating and cooling system. Estimated work time: 2 days. Install 4 ground-source heat pumps. Estimated work time: 2 days.

Step 3: Replace 30 windows with energy-ef�icient design models. Estimated work time: 14 days.

These steps can commence two weeks after a completed contract. This gives us time to order panels from our supplier in California.

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Our Personnel and Materials

All-American installs only Premier Solar Panels. The design has received Solar Energy magazine's "Best Choice" award for the past �ive years.

Each of our installers has completed the Midwest Solar Institute's training program, which lasts six months. Each has certi�ication for designing and installing solar panel systems. Our installers have each been employed by All-American for a minimum of �ive years.

Cost Estimates

Solar Panels and Installation $7,000 per panel, installed price = $140,000 Ground Source Heat Pumps $12,000 per unit installed = $ 48,000 Windows $200 per window, installed = $ 60,000

Total Proposed Price $248,000

Federal Energy Tax Rebate at 30 percent = $ 81,840

Your �inal cost = $166,160

All-American provides energy ef�iciency at a reasonable cost. We would like to include you in our list of successes.

Your solar panels would be visible to the local community, indicating your support for cleaner air and energy conservation. This intangible bene�it would be in addition to your lower utility bills and eventual free energy. Our estimates do not account for increases in electricity rates imposed by city utilities.

All-American provides highly skilled service without disruption to your business. The savings begin the day the units are installed.

Please contact Fred Miller with questions and inquiries. We would like to begin saving you money on your energy bills as soon as possible.

Attachments

1. Monthly estimates of energy savings 2. Brochure for Premier Solar Panels 3. Information regarding ground-source heat pump manufacturers 4. Information regarding window providers

Internal Proposals

Internal proposals recommend changes to a company's operations to solve a problem or purchases to be made. The number and types of changes constitute a sweeping set of ideas, from changes to simple operating procedures and protocols and suggestions for purchases of new building, equipment, and technologies. Proposals can suggest the addition of company policies, such as changing company rules, procedures, or human resource management guidelines. Other internal proposals offer ideas about new products and product improvements as well as marketing methods used to sell the items.

Most of the time, a proposal sent to others within the same company consists of less structure and detail. The degree of formality will largely be determined by the nature of the proposal and the intended audience. A message targeted at the CEO or top management team from someone of lower rank will take on a more formal tone and often a more formal structure, such as what would be prepared for an external audience. The same holds true for a proposal sent from the CEO to a company's board of directors. Peer-to-peer or top management to lower-ranking employees often use a less-formal approach.

Proposals can also be presented in an electronic format, with linked and embedded documents, and multimedia documents such as video clips and animation. These create greater information richness in a somewhat lean channel. Factors to consider when preparing an internal proposal include the elements displayed in Table 4.9.

Table 4.9: Internal proposal elements

Audience Who will receive this proposal?

Signi�icance What level of impact does the problem present?

Nature of the Assignment Was the writer assigned the task of solving the problem or merely identifying it?

Precedent Does the company use a speci�ic proposal format?

Format Should this be a complete proposal or rather a letter or memo?

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The �inal issue determines whether to go forward with the formal proposal document. Table 4.10 provides an example of a format for a less-formal proposal. Figure 4.3 offers a version of an internal proposal for a retail chain.

Table 4.10: Less-formal internal proposal format

Introduction

Problem statement

Proposed solution

Analysis

Explanation of the problem

Analysis of causes

Scope, signi�icance, and implications of the problem

Detailed Solution

Work to be done

Potential obstacles

Bene�its

Call to Action

Figure 4.3: Example of an internal proposal Internal proposals target speci�ic individuals in the organization.

Letterhead

To: Frank Robinson

From: Ashley Sorenson

Date: July 15, 2012

Re: Test Market of Tweet Response Team

The Problem Tech-driven customers want immediate responses while shopping

Our line of products and our retail shopping experience has served us well for several decades. Now, a new breed of consumer visits our stores. These individuals carry various hand-held devices that offer Internet access. They are accustomed to immediate responses to text messages and tweets. Many become frustrated while waiting to ask a salesperson a simple question.

Proposed Solution In-store instant messaging system

With the addition of two employees per store, we can develop a system similar to the Twelpforce Twitter account at Best Buy. These individuals would be assigned to immediately respond to customer questions, using an instant messaging system. The program would make our stores unique in this market, attracting customers who are ready to buy, as well as some who might come into the store to check out the system and end up making purchases as a result.

Analysis How the system solves a growing problem

Our in-store research indicates that a growing number of individuals walk out without making a purchase or talking to a salesperson. Many of these are younger customers carrying mobile phones or similar devices.

We developed an interview system that intercepted 50 of these "walk-outs" as they were leaving the store. A survey with 10 "yes" or "no" questions sought to identify their primary reasons for leaving. More than 80 percent reported that they were "tired of waiting."

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12 employees at $60,000 $720,000 Instant messaging system 20,000 In-store signage 10,000 Advertising and promotions 150,000 Total Cost $900,000

The signi�icance of this �inding is obvious: These individuals represent some of our future customers, if we can �ind ways to engage them and meet their needs. An in-store instant messaging system can increase sales and develop store loyalty.

Solution Details A test-market program

We propose to develop the system in our four stores in Omaha, Nebraska, as a test market. Omaha contains two large universities, Creighton and the University of Nebraska at Omaha. The population is representative of our customer base in terms of income and educational diversity.

The test market would include development of a name brand and logo for the system, in-store signage, training of the employees, and an advertising program, including a public relations blitz. The test market would run for one year, allowing monthly, seasonal, and annual comparisons with the previous year's sales �igures across all four stores.

We believe the test-market program would be of suf�icient duration to overcome many potential in�luences on the data, such as unusual weather patterns. It would not overcome the effects of any major economic changes. The program would gain �irst-mover advantage in the market and allow us to see whether any competitors follow.

The cost of the program would be $900,000. The following are the details:

The cost would be less than $80,000 per month, or $20,000 per store.

Why Now?

Our forecasting team believes the recent recession is ending. More customers are shopping, disposable income has risen, and demand for our products continues to increase. The opportunity exists to capture some of this new consumer enthusiasm, attract attention to our stores, and grow our customer base.

In summary, a quality proposal results from following the four steps of designing formal messages: assess the communication environment, establish a message format, develop the message, and authenticate the approach. When assessing the communication environment, note that proposals are proactive messages designed to inspire a change, initiative, innovation, or some other new course or direction.

The four elements of establishing a message format include attracting attention, preparing the information to be transmitted, �inding ways to reach the audience, and developing methods to ensure understanding and compliance. A proposal requires an effective problem statement to attract attention. Attention to detail allows for clear transmission of information. The audience will be reached with a concise yet complete proposal document. These activities take place when the objective of the proposal has been clearly enunciated and the methods to be used are precisely spelled out.

For Review

Name the primary elements of an internal proposal and a less-formal proposal format. (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.

For an internal proposal, the audience, signi�icance, nature of the assignment, prec edent, and format are key elements. The proposal format will be introduction, analysis, detailed solution, and call to action.

Short Reports

Many times, short internal reports using a less-complex structure serve the company's needs. In such a report, the language should be balanced between being too informal, which leads the reader to think the document does not contain important content, and too formal, which can create distance and alienate the reader. The most common components of short internal reports are provided in Table 4.11.

Table 4.11: Components of short internal reports

Front Matter

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Internal reports cover a variety of subjects, including projected costs of repairing a building.

Introduction

Methods

Results and Discussion

Conclusion and Recommendations

The front matter for an internal report contains a title page, a brief table of contents, a list of illustrations, and an executive summary. The title page identi�ies the author of the report, the topic, and the intended audience. The table of contents outlines how the report was conducted and prepared. Illustrations include any �igures or tables, listed in the order they appear in the report. The executive summary should be an easy-to-follow, one-page summary of the nature of the report.

The introduction brie�ly outlines the issues in the report. First, it indicates who commissioned the report and why. The introduction then outlines the nature of the research and forecasts the outcome. Resulting recommendations are then offered.

The methods section explains how the inquiry was conducted. It speci�ies any special limitations or constraints. The sample or subjects will be noted as well. If a statistical analysis has been performed, it should be reported in suf�icient detail for the audience to understand.

Results often contain tables and other visual aids that summarize �indings. The results should be clearly presented and discussed to provide the greatest possible insight into what the results imply. The audience will then be more amenable to recommendations.

Conclusions begin with a restatement of what has transpired in the report. The conclusions portion does not introduce new material. Recommendations can be calls for action, calls to delay or not take action, or calls for additional inquiry. The recommendations section provides protocols for implementation, if action will be taken.

For Review

What are the components of a short internal report? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.

Front matter, introduction, methods, results and discussion, conclusions and recommendation.

Concept Check

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4.3 Full-Length Messages: Business Reports and Research Learning Objective # 3: How can employees and managers prepare effective formal reports?

A business report provides an in-depth analysis of an issue facing a company. Two primary forms of business reports are regularly scheduled reports and special reports. Regularly scheduled reports generated by managers include those placed in annual reports to shareholders and boards of directors. Special reports examine speci�ic topics, such as a response to an opportunity, a threat, or an ongoing problem. Reports investigate industry trends and changes in industry standards and technology. Reports are sent to internal and external audiences. The purpose of the report sets the tone for the language, depth of explanation, and other elements of the report.

External reports serve a variety of purposes. Annual reports are sent to shareholders to describe company activities and levels of success. Reports are prepared as part of investigations of incidents or events that affect the company. The results are sent to other organizations, such as governmental agencies or insurance carriers. Reports are provided to professional agencies, such as those prepared following major ethical violations in the �inancial industry in the United States.

Full-Length Reports

When an individual or group has been commissioned to fully investigate a topic or problem the resulting document will be a full-length business report. It should be designed to incorporate suf�icient detail to satisfy any question the audience might have. Full-length reports can be prepared for both internal and external audiences. The components are displayed in Table 4.12.

Table 4.12: Components of full-length business reports

Opening Materials Report Content Back Materials

Title page Transmittal Document Table of Contents List of Illustrations Executive Summary

Introduction Rationale Body Methods Results Discussions & Recommendations

References Bibliography Appendices

Because of the length of a fully developed external report, an example is provided in the Appendices portion of this book.

Opening Materials

In the opening materials, the title page would be the same as an internal report—the recipient, author, and subject along with the date. The transmittal document, or cover letter, adds a formal element for the audience to consider. It normally includes a more detailed description of the report's subject, the importance of the report, and a brief section about recommendations. The table of contents, list of illustrations, and executive summary are the same as for internal reports.

Introduction and Rationale

The report format should be divided into sections. The introduction spells out the purpose of the report, an overview, and any background information needed. Key questions that are answered in the introduction include:

Who asked for this report? Was a speci�ic individual asked to investigate, or a team of employees? What triggered the need for a report, a problem or an opportunity? What priority does this hold, in terms of company operations?

The introduction should also provide the report's rationale, which answers these questions.

The body of the report describes the methods used in the study, including the sample, research methods, limitations or challenges, and statistical analysis protocols. The methods used include primary data and secondary data. The methods section should explain any limitations to how the study was conducted, including time, funding, or changing circumstances. The complete details regarding what was studied and how it was studied should appear, leaving room for few questions or challenges to the methods used.

Methods: Primary Research and Data

Primary research involves the collection of data that does not already exist. Two major forms of primary research include quantitative and qualitative methods. Quantitative methods generate data from questionnaires, counts of activities (sales �igures, production numbers), and experiments. Normally, some type of statistical analysis then will be applied to questionnaire responses and data retrieved from experiments, ranging from descriptive statistics such as

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Qualitative research methods include focus groups, interviews, and observations of behaviors.

Figure 4.4: A pie chart

percentages, percentiles, and mean scores in the data to highly advanced quantitative techniques (Keppel, 1982). Often quantitative methods are used to test a postulate or hypothesis, such as, "Companies that provide health insurance free of charge to employees experience signi�icantly lower levels of turnover and higher levels of reported employee satisfaction with the employer." Such a question can be tested empirically.

Qualitative research methods include focus groups, interviews, and observations of behaviors. Observations of behaviors report what individuals did under various circumstances (Van Maanen, Dabbs, & Faulkner, 1982). Qualitative research tends to be more exploratory in nature, seeking to identify basic patterns of human behavior in various circumstances. For example, grocery store designs are based on qualitative observations of how people shop for food. Impulse items are strategically placed in areas where people are most likely to see the products and quickly decide to buy them.

Methods: Secondary Research and Data

Secondary research does not use subjects, experiments, or the collection of new data. Instead, secondary research consists of evaluation of data and materials that already exist. Many databases provide secondary data for purposes of organizational research. The United States government provides data regarding economic conditions and trends. Organizations such as CompuStat and Forbes offer data regarding industry statistics, including market share, �inancial ratios, and stock prices and values. Secondary data can be accessed to explain the characteristics of an area, such as the number of mobile phones owned by persons in the United States as compared to Mexico.

Secondary research also includes the analysis of various opinions of experts. A secondary research report can summarize a series of magazine or journal articles on a topic. For example, a secondary research project might summarize the impact of a recession on the sale of a particular sundry item, such as big-screen television sets.

The results section carefully explains what the study revealed. It spells out what was determined by the research. Statements regarding con�idence in the �indings appear, such as statistical signi�icance. The results section does not draw conclusions. It merely reports the outcomes.

Discussion and recommendations include the author's perspective on how best to solve the problem as well as how to implement the solution. The discussion section contains any notations about the limitations of the research methods. It highlights important �indings and hypotheses or ideas that were not supported. Recommendations or statements regarding how the company should proceed based on the investigation are also offered.

For Review

Describe primary and secondary research methods. (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

Primary research involves the collection of data that does not already exist. Two major forms of primary research include quantitative and qualitative methods. Secondary research does not use subjects, experiments, or the collection of new data. Instead, sec ondary research consists of evaluation of data and materials that already exist.

Back Materials

Back materials make a report appear more professional and add credibility. Sources should be carefully cited, including any books, journal articles, or experts that helped create and carry out the study. Additional helpful reading materials are presented in the bibliography. Appendices can include any tables or �igures used to augment the report.

Use of Visuals in Preparing Proposals and Reports

Visual aids add richness to what are otherwise lean information channels. Proposals and reports can be augmented with various forms of visuals. The most important thing to remember about visual aids is that they should add value to the document by providing information, making a written point clearer, or by displaying and summarizing data. The standard visual aids attached to or woven throughout proposals and reports include:

pie charts bar graphs line graphs

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Pie charts illustrate proportional amounts of a larger unit.

tables photographs illustrations

Pie charts illustrate proportional amounts of a larger unit. A pie chart can indicate percentages of expenditures for each element of a budget. Pie charts often depict market share of a product or brand for the marketing department. An example of a pie chart is displayed in Figure 4.4.

Bar graphs compare totals or components of totals. Bar graphs can be vertical or horizontal in nature. Bar graphs are used to indicate changes over time. Bar graphs involve the selection of information placed on two axes (see Figure 4.5 for an example).

Figure 4.5: A bar graph

Bar graphs compare totals or components of totals.

Line graphs indicate trends over time. Again, two axes are chosen, such as sales over a series of years or the number of employees a company retains over time. Line graphs can compare one organization's trends to another. A line graph may also be used to indicate the results of an activity, such as a change in production methods or a test market for a product. Figure 4.6 shows the use of a line graph format.

Figure 4.6: A line graph

Line graphs indicate trends over time.

Tables provide information in the form of numbers. Tables are less visually compelling, but often represent the best choice for providing statistics and raw numbers. Figure 4.7 illustrates a typical table.

Figure 4.7: Example of a table

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In-Store Sales by Book Category, 2010–2012

2010 2011 2012 Fiction Romance 10,434 14,731 18,311 Western 720 811 655

_____________________________________

Non-Fiction Self-Help 1,737 2,223 975 Biography 3,121 2,411 4,556 Political 4,175 2,033 5,781 Hobbies 3,327 3,022 3,789

Tables provide information in the form of numbers.

Photographs can dramatically enrich a document visually. Any type of natural disaster or "act of God" that changes a company's operations may be enhanced by one or more photos of the event. A color photograph adds visual impact to words.

Illustrations take many forms, from cartoons to models and designs. They can simplify a process and make it easier to understand. Illustrations of how a system operates demonstrate how products �low through a series of stages, such as a production process or marketing channel. Flow charts are often used to present stages or components of a system. Illustrations can be designed to depict problems and disruptions as well. Today's computer software programs make it possible to create visually compelling illustrations of various company operations.

Visual aids can also be applied to verbal presentations, using methods such as PowerPoint slides, Google documents, Keynote storytelling elements and other technologies.

For Review

Name types of visuals that can be added to proposals and reports. (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

Pie charts, bar graphs, line graphs, tables, photographs, and illustrations.

Rules for Using Visuals

Effective visuals add value and power to a formal, written document. Poorly designed visuals distract or confuse the audience. To make sure a visual aid works, it should be:

easily understood, easy to read, and simple appropriate memorable credible professional referenced and carefully placed numbered and labeled

The most important rule to follow will be the �irst, that the visual aid can be easily followed. Trying to incorporate too many elements violates this rule. Using distracting bright colors may also make a visual less easy to understand.

Credibility results from carefully researched visual materials. If the audience suspects that information has been altered or doctored, the entire document forfeits believability. Citing sources on the visual aid adds credibility. Sketchy drawings distract the audience and undermine the integrity of the report or proposal. Using today's computer software makes it easy to prepare professional-grade visual aids. Visual aids that augment a written document should be referenced within the document. When possible, the visual can be placed within the text or at the end of the report.

Numbering systems for visuals vary. One method suggests anything with numbers will be referenced as a Table and any other type will appear as a Figure. The key is to label the visual within the text of the document and with the item as it is placed in the document. The format should remain consistent and easy to follow.

Concept Check

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A well-designed management information system consists of the team of people and technologies used to collect and process organizational information.

4.4 Effective Message Transmission Learning Objective # 4: What are the best ways to ensure effective message transmission?

Four important approaches help transmit important messages effectively (Mehdi, 1984; Samaras, 1980). First, transmit important messages through more than one channel. Second, match the medium to the message. Third, maintain an effective management information system. Fourth, complete regular communication audits to identify and address any problems within the system. In addition to these, be sure you are overcoming the main communication barriers:

Interpersonal barriers: differences in rank, gender, or personality System overload: too many communication channels addressed toward a single employee Physical barriers: differences in time zones, or poor phone reception Selective �iltering: how messages can be intentionally and unintentionally altered as they pass from one to another Mismatch of message and medium: the unclear use of social media in employee relationship communication or delivering a verbal message when a written one would have been more appropriate Informal contradiction of the formal message: a rumor that impacts the formal message sent by a manager about terminations or layoffs

To ensure a message arrives on time and will be received involves using more than one medium. A meeting can be followed with an email or an agenda memo. A personal conversation can receive similar follow-up reinforcement. Letters followed by phone calls make the message appear to be important and double the odds that the recipient will hear or see the content of the message. In today's world of management communication, repetition becomes more important than ever when seeking to ensure a message arrives.

Second, match the message and the medium (Lengel & Daft, 1988). Again, consider the audience, the content of the message, the degree of information richness required, and the need for a paper record of the message. As additional new transmission devices become available, managers may need to spend more time explaining the proper channel for a suggestion, complaint, or request for clari�ication of a directive to employees.

For Review

In what two ways can formal messages be used to help overcome the barriers to communication? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

Use more than one medium to transmit key messages and match the message to the medium.

Management Information Systems (MIS)

To make sure messages and information travel ef�iciently and effectively through an organization, the company should establish and maintain a high-quality management information system (MIS). A well-designed management information system consists of the team of people and technologies used to collect and process organizational information.

An effective MIS begins with effective people who know how to collect important organizational information. These individuals are found in many areas, including accounting, forecasting, production, quality control, human resources and at executive levels in the organization.

An effective MIS maintains the best technologies. Company phone systems should be easy to use; the website should be easy to negotiate, and systems should be in place to make sure that key decisions and announcements reach every person that should hear a message.

An effective MIS carries high-quality information. Critical company information will be timely, accurate, important, and summarized. A manager should be able to quickly access important statistics and information for decision-making processes. Individual employees should be able to �ind the types of data to help them perform their jobs most effectively. For example, in order to best serve the client's needs, a customer- service representative should be able to access information about previous contacts a

person or business has made with the company.

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Communication audits can be used in a variety of organizations.

For Review

De�ine management information system. (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

A management information system consists of the team of people and technologies used to collect and process organizational information.

Communication Audits

To ensure that a company's formal communication system serves the needs of the organization, a communication audit may be undertaken. A communication audit is a systematic assessment of an organization's capacity for, or performance of, essential communications practices. It determines what works, what does not, and what might work better if adjustments were made (Coffman, 2004). Table 4.13 identi�ies the steps in designing and completing a communication audit. When assessing organizational communication systems, four issues should be assessed (Hargie & Tourish, 2009).

First, the audit must accurately diagnose current communication practices. This means that more than one individual's perspective will be needed. One model suggests communication should be evaluated from the perspectives of the person or group sending messages, the recipient(s), and an independent outside observer. Removing biases in evaluation constitutes a key objective in a communications audit.

Second, when tactics have been used to improve communication, such as issuing laptops for employees to carry to work assignments or smart phones for increased communication from remote locations, the efforts should be tracked to see if they accomplished their intended objectives. In the case of new technologies, those at distant locations should be asked whether their needs have been met, and they should be asked to provide speci�ic examples of how the system improved, or did not improve, the communication process.

Third, the company should assess whether its communication system is associated with overall success. In other words, does the communication system improve pro�its, and build loyalty and morale within the organization, or in some way serve other important organizational needs?

Fourth, understand how communication systems and methods may vary by organizational rank. These differences result, in part, from varying needs of members. Front-line employees may have the most powerful needs for immediate lean information to effectively carry out their jobs. Others may require more in-depth communication to succeed. The communication audit should account for variances by rank in the organization.

Table 4.13: Steps of a communication audit

1 Complete a plan for the entire audit program.

2 Identify methods for studying internal communication networks.

3 Choose important areas to assess.

4 Select the method (surveys, interviews, questionnaires, focus groups).

5 Pick the participants (entry-level, middle manager, top management, external publics).

6 Indicate how the information will be evaluated.

7 Write and circulate the �inal report to all relevant parties, including participants.

Source: Downs, C. W., & Adrian, A. D. (2004). Assessing organizational communication: Strategic communication audits. New York, NY: The Guilford Press.

An effective audit provides an assessment of current practice (diagnosis) and then determines what steps are needed to make improvements (prescription). The audit is not complete until both activities have taken place and been implemented. An audit only succeeds when the communication needs are clearly spelled out by management.

For Review

De�ine a communication audit and name the steps involved in conducting one. (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

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A communication audit is a systematic assessment of an organization's capacity for, or performance of, essential communications practices. The steps are completing an audit plan, identifying methods for studying internal communication networks, choosing important areas to assess, selecting the method to use, picking participants, indicating how the information will be evaluated, and writing and circulating the �inal report.

Concept Check

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4.5 Chapter Review Written messages offer the advantage of allowing a manager to carefully choose the words prior to transmitting the message. Written email and instant messages are viewed when it is convenient, which can save time. A written message provides an of�icial record that a manager can save for future purposes. Brief messages include memos, emails, instant messages, and letters.

A paper memo serves the purpose of creating a more permanent record of an internal correspondence. Memos serve two major purposes: provide information and call for action.

Using email, employees can communicate from different locations without the use of a telephone. Email and instant messaging allow virtual teams to coordinate and schedule activities, create a channel of upward communication, and provide a venue to send out information downward or laterally. Employees should also understand that the company owns email, giving management the right to inspect messages.

Letters will be perceived as more of�icial, and are used for messages with greater complexity. Letters offer the advantage of remaining private, as opposed to email or text messages, and also create the appearance of being sensitive while expressing greater concern or appreciation. Letters establish a permanent record of the correspondence.

Moderate-length written communication includes internal and external proposals. Internal proposals are documents that recommend changes to a company's operations to solve a problem or in regard to purchases to be made. External proposals are offers made to other companies to provide products or services in exchange for a price or fee. External proposals may be solicited by other companies, which mean a request for proposal (RFP) has been sent. Unsolicited proposals are sent at the vendor's initiative to potential customers.

A proposal should submit one core idea, which may be repeated throughout the document. It should focus on the recipient's needs rather than the sender's needs. The terminology should match the recipient's business and industry. The proposal should explain the recipient's problems or issues in the present tense. The language in the proposal should be positive. A concise and succinct proposal has a better chance of being accepted.

A business report provides an in-depth analysis of an issue facing a company. Some are regularly scheduled and others cover special topics or events. Internal reports are less complex and the language will be adapted to the audience and situation. Full-length reports are prepared when an individual or group has been commissioned to fully investigate a topic or problem. Full reports include opening materials, the report's content, and back materials. Visual aids complement materials presented in writing.

Formal communication barriers include interpersonal problems, system overload, physical barriers, selective �iltering, a mismatch of message and medium, and informal contradiction of formal messages. Methods used to overcome formal barriers include carefully matching the message to the medium and audience and transmitting important messages through more than one channel. A management information system can be built to ensure the best people and technologies process organizational information. A communication audit assesses the organization's system looking for what works well, what does not, and what can be adjusted.

Key Terms

communication audit (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

A systematic assessment of an organization's capacity for, or perfor mance of, essential communication practices.

external proposals (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

Offers made to other companies to provide products or services in exchange for a price or fee.

internal proposals (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

Documents that recommend changes to a company's operations to solve a problem or recommend purchases to be made.

management information system (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

The people and technologies used to collect and process organizational information.

request for proposal (RFP) (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

External proposals solicited by other companies.

unsolicited proposals (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

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External proposals sent at the vendor's initiative to potential customers.

Analytical Exercises

1. Which form of formal written communication should be used for each of the fol lowing circumstances? Defend your choice. a. announcement of a visit by the governor of the state to a manufacturing plant b. announcement that the eventual successor for the CEO has been chosen c. noti�ication that the company has been sued by a special interest group and that some employees may be expected to testify d. announcement that a shift will be canceled due to excessive snowfall e. offer to reappoint a contracted employee for another year with an increase in pay f. employee suggestion about methods to improve the company's shipping and order ful�illment system

2. Prepare a memo for the following circumstances. Explain whether it should be an email or paper memo and your reasons for the choice. a. notify employees that this year's holiday party will be a pot luck dinner b. solicit employee requests for of�ices in a new wing of the company's building c. announce the results of last month's sales contest d. announce a job opening in which only internal candidates will be considered

3. Compose a letter for the following issues: a. cover letter for a report by the employee bene�its committee regarding the company's pension plan b. letter of sympathy to the spouse of a long-time company employee who died suddenly c. request by a member of the marketing department sent to the manager of the production department to create a wider range of colors for a company's

line of appliances, to meet customer requests and match competitor products d. letter of resignation due to a personal scandal, sent from a CEO to a board of directors e. letter of apology for a company's release of defective products, taking full responsibility

4. What kinds of visual aids would you suggest for the following? Explain your reasoning. a. proposal to increase plant capacity due to rising sales over the past three years b. report on the number of lost employee days due to stress-related issues fol lowing an accident in a plant c. proposal by a manufacturer of hardware to supply items such as rivets, screws, and bolts to a company that sent a request for proposals d. report on the relationship between a company's sales and economic condi tions in four regions of the country

5. Explain the roles that text messaging, e-mail, and social media play in the follow ing circumstances: a. An employee needing to inform the company she has been in a car accident while traveling on behalf of the organization b. A company's marketing team looking for new ways to steer customers to a company's website c. A customer wanting to complain to friends about poor treatment by a retail sales clerk d. A customer wanting to complain to a store manager about poor treatment by a sales clerk e. A company manager seeking to quickly inform employees about the winner of a recent sales contest

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4.6 Case Studies

Video Case Study: British Petroleum Controversy at Prudhoe Bay

In this clip, a union vice president at British Petroleum accuses the company of harassing and intimidating workers who voice their concerns about unsafe working conditions. In response, BP issues a written statement where they claim to encourage employees to voice thier concerns.

1. How did BP use written communication to try to alleviate employee concerns about safety? Were they successful?

2. What could BP have done to make their written communication match their actions?

Case Study 1: A New Game Plan

Casey Murphy loved sports. He spent much of his free time enjoying sports as a spectator and participant, and fancied himself as someone with extensive knowledge of several games. When he wasn't at the gym or watching an event on television, Casey worked as a merchandise buyer for the Iowa Furniture Warehouse, a chain of twelve stores located throughout the Hawkeye State.

The Iowa Furniture Warehouse chain had achieved modest success through a series of strategic, tactical, and operational innovations. At the strategic level, the stores were all located in carefully chosen trade districts that were modern, close to restaurants such as Applebee's and T.G.I. Fridays, and easy to access by major roads. The stores were all the same in exterior appearance and interiors were brightly lit and not cluttered. The goal was a relaxed and pleasant shopping experience. At the tactical level, products were sold in the midrange of quality, prices were maintained to match competitors in the furniture industry, and an innovative, humor-based advertising campaign featuring "Lance and Laura" had been well received for years. At the operational level, customers were assured that any purchase would be delivered to their homes on the same day, no matter how late in the day the transaction took place. The company offered same-day �inancing for major purchases.

Casey's concerns about Iowa Furniture Warehouse were in three areas. First, although sales and pro�its were solid, he believed the company was underperforming. Second, recently collected customer satisfaction research statistics were discouraging. Many customers, even ones who made purchases, reported low satisfaction with the purchasing process. Casey had assembled a focus group where members complained that they often felt "pressured" and that salespeople wouldn't "give them any space." Third, turnover rates among salespeople were much higher than in other companies in the area. Casey also noticed several incidents where salespeople engaged in con�licts with one another, with the common theme that someone "stole my sale" or "stole my customer."

Casey harkened back to his basketball and football days. In both sports, defense could be played man-to-man or in a zone. He felt the analogy �it Iowa Furniture Warehouse. The company was playing man-to-man when it should have been using a zone. Instead of a commission-only method of pay in which a salesperson would hound a customer throughout the store, Casey believed that a team-based commission system would reduce con�licts between salespeople. He also wanted to specialize salespeople for speci�ic types of furniture, such

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as one individual for sofas and chairs, another for dining room furniture, and another for of�ice furniture. Then, even when the customer moved to a different part of the store, the salesperson would remain, handing the customer off to the next area. Using the zone approach with group commissions, a salesperson could provide expertise about a product or simply watch a customer's child as the person sat in a chair or tried out a bed. He concluded that his zone approach would reinforce the relaxed and pleasant atmosphere created by the store's interior.

Casey had always enjoyed pleasant relationships with members of the top management team in the chain. At the same time, most of his interactions were conversations about sports rather than business. This would be the �irst time he would present an actual business idea to them.

Review Questions

1. Prepare an internal memo requesting a face-to-face meeting with management to present Casey's idea. 2. Prepare a letter written by Casey to the CEO presenting his idea. 3. Outline an internal proposal presenting Casey's idea. 4. Which method should Casey use? Defend your answer.

Case Study 2: Examining Changes in Auto Insurance Providers

Technology impacts business in many ways. Innovations and technology improvements alter the marketplace by introducing new products, improving products, advancing production methods, and changing the ways in which jobs are performed. Technological change affects the delivery of services as well.

Traditional insurance companies such as State Farm and Allstate sell a range of policies, including life, health, auto, property, and renters' insurance. These organizations service policies through claims of�ices and other support activities. The basic business model has remained largely the same for decades.

The introduction of the Internet has led to new competitors, especially in the automobile insurance category. Companies such as Geico, Progressive, and Esurance provide policies featuring two differences. First, policies are sold online and over the phone. Second, price discounting has become the primary selling feature.

The marketing approaches for the two types of auto insurance are remarkably different as well. Geico features the Gecko as a spokesanimal and uses other humorous approaches to create interest in the tagline, "A 15-minute call could save you 15 percent on car insurance." Esurance also features humor in its advertisements with a focus on lower prices. Progressive utilizes the talents of Stephanie Courtney, who portrays Flo in company commercials, to emphasize price savings.

State Farm and Allstate maintain more traditional approaches. Allstate's spokesperson, Dennis Haysbert, maintains the "Good Hands" theme, and an informative/emotional approach to selling insurance. State Farm continues with the tag line, "Like a good neighbor, State Farm is there," but has incorporated humor into recent commercials. The themes have stayed away from direct price comparisons with Internet companies for the most part.

The future of car insurance, along with all other forms of insurance, has become clouded. Life insurance policies are sold online and through direct-response television commercials. The primary question facing industry leaders will be in regard to the role played by insurance agents. Will they continue to operate from of�ices where walk-ins and clients can physically meet with them? Will house calls remain part of the selling program? Will a hybrid of online-insurance of�ice model emerge? The answers to these and questions regarding the role of technology in the insurance industry will largely dictate the future of this form of commerce.

Assume you have been asked to prepare a full-length report when answering the following questions.

Review Questions

1. To investigate the role of the Internet in car insurance, what forms of primary data should be collected? Would the study focus on older customers, younger customers, or a mix?

2. To investigate the role of the Internet in car insurance, what forms of secondary data should be collected? 3. Would a report regarding the role of the Internet in car insurance be an internal or an external report? Who would receive copies? 4. What types of conclusions could be drawn from the research and report?

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3 Management Communication:

Verbal and Nonverbal Channels

iStockphoto

Learning Objectives

After reading this chapter and studying the materials, you should be able to:

1. Apply the essential elements of a management communication system to an organization. 2. Identify the role formal communication plays in managerial processes and describe the range of formal communication channels available to

managers. 3. Employ the keys to successful face-to-face meetings with other employees. 4. Effectively manage informal communication. 5. Understand the role nonverbal communication plays in presenting and receiving messages.

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© Ramin Talaie/Corbis

The Starbucks chain's resurgence began with effective strategic management programs combined with quality management communication.

3.1 Communication Systems and Processes Learning Objective # 1: What are the essential elements of a management communications system?

Every organization, regardless of its age or size, depends on its communication system to conduct operations. Messages must reach the appropriate audiences in order for a company to survive. A key part of the well-being of a business continues to be the ability to make sure the right people receive the right information at the right time.

Chapter 1 de�ined management communication as all efforts to systematically plan, implement, monitor, and upgrade the channels of communication within the organization and with outside organizations that affect a company's internal operations. Management communication includes elements of planning, organizing, directing, and controlling at the strategic, tactical, and operational levels.

This chapter explores the process of creating managerial messages through verbal and nonverbal channels. We will examine various types of messages and the goals of these messages. Also, the patterns that emerge when managers communicate with their employees receive attention. Formal and informal verbal communication channels serve to deliver many of these messages. Formal and informal verbal communication channels are presented next and the means by which informal communication can be used to complement and supplement formal communication are noted. The �inal part of this chapter reviews the role and forms of nonverbal communication.

The Starbucks Turnaround: Strategic Management and Formal Communication

The Starbucks chain of retail stores has experienced dramatic periods of success, turbulence, and turnaround. In the 1980s, founder and CEO Howard Schultz took the concept of modeling coffee venues from Italian coffee bars and turned his organization into an espresso empire. The original concept included hiring employees as baristas, or bar persons, with strong interests in coffee products and in providing high- quality, pleasant services to patrons. Extensive training and a diverse work force became hallmarks of the organization. Over a span of 15 years, Starbucks grew dramatically (Lewis, 1997).

Schultz eventually stepped down as CEO in 2000, with the company operating 5,000 retail stores and strong sales. Under the new CEO, Jim Donald, expansion led to the addition of nearly 10,000 more stores. The rapid growth created a saturation of the market, accompanied by a decline in the quality of the Starbucks experience. In 2007, the stock value of Starbucks dropped by 42 percent, just as the U.S. economy entered a profound recession.

On January 6, 2008, Schultz returned as CEO. Within two days the stock's value had rebounded by 8 percent. Over the next three years, Starbucks eventually returned to a solid, pro�itable enterprise. Schultz has been widely praised for his efforts to turn the company around. His work indicates the important relationships between strategic management and managerial communication processes.

Many of the decisions made to restore the company involved strategic marketing and management efforts. Each was communicated throughout the company. Among these, Starbucks reduced the number of retail units, including 600 closures in 2009, reducing operating costs by $850 million.

Many stores were remodeled, and Starbucks replaced all of its espresso machines with the Mastrena, a sophisticated Swiss-made machine. The company replaced all of its outdated cash registers and computers, and Schultz made the executive decision to remove heated breakfast sandwiches from the menu. Schultz also completely reorganized supply chain operations with the goal of getting products to stores more ef�iciently and improving inventory. In 2008, only three out of every 10 orders were delivered perfectly to stores. The statistic improved to nine out of 10 orders. Starbucks created a customer rewards card to try to retain patrons in the declining economy.

Beyond these strategic activities were much more direct managerial communications efforts. To shake things up, Starbucks closed all of its U.S. stores for three-and-a-half hours in February 2008 to retrain its baristas on how to make the perfect espresso. The message was clear to all employees—things were about to change. Schultz invited employees and others to email him directly and received over 5,000 responses in the �irst year.

The top management team was altered with the addition of a chief technology of�icer, Chris Bruzzo, from Amazon.com. Schultz also shook up the senior management team by adding members of tech companies, including Google COO Sheryl Sandberg, to the company's board of directors. Outside consultants were retained to instruct Schultz and the top management team about corporate turnarounds.

Clear messages were sent to employees in many forms, beginning with retraining. Schultz explained, "We wanted to go back to our roots, to show people what we stand for, which is the perfect cup of coffee" (CNBC, 2011). Schultz decided to continue offering health insurance to his employees in order to stay aligned with the company's guiding principles. Starbucks was the �irst U.S. company to offer comprehensive

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health care coverage and equity in the form of stock to part-time employees. In June 2009, Schultz announced that he would increase partners' salaries according to merit.

Schultz summarized the three-year turnaround this way: "We enjoyed a 15-year magical carpet ride. Everything we touch turned to gold. We had convinced ourselves that success was an entitlement. Success was not an entitlement; it is something that has to be earned every day. We were going to pursue the excellence that was the very foundation of the company" (CNBC, 2011).

Questions for Students

1. What formal communications message did Schultz send during the initial parts of the turnaround? 2. Which formal communications channels best matched Schultz's approach to strategic management and employee relations? 3. What types of informal messages and gossip were likely to be circulating among employees during the turnaround period? What could

Schultz have done to cope with them?

The Management Communication Process

Effective management communication requires deliberation and planning. Even though a great deal of communication occurs in the spur of the moment, many pronouncements can be constructed and delivered with greater attention to detail. The management communication process consists of four activities:

Assess the communication environment Establish a message format Develop the message Authenticate the approach

Each of these activities presents the opportunity to carefully analyze the nature of the message, the medium that will be used to transmit the message product, the audience, and the intended outcome.

Assess the Communication Environment

Managerial communications fall into two general categories. Proactive messages announce a change, initiative, innovation, or some other new course or direction. They proclaim that the company will move into a new territory or use a new method. Reactive messages respond to circumstances, such as a crisis, problem, or event.

As a manager begins to formulate a message, the �irst step (analysis of the situation) depends largely on the type of message to be prepared. Proactive messages are often more unsettling to recipients, because change itself can make people uncomfortable or defensive (Patti, 1974). Some proactive messages broadcast positive intentions, such as company expansion, the addition of a new job title, or the company's intention to hire more employees. Others, however, create fear and concern among employees, such as when a �irm declares the development of an outsourcing or offshoring program that might eliminate local jobs.

Reactive messages range from small pronouncements such as, "Fred Jones plans to retire and we are beginning a search for his replacement," to reactions to major crises. Managers should take the time to carefully prepare organizational responses to situations. Assessing the communication environment consists of the evaluation of all Ws and Hs associated with the message, as follows.

Who is the audience? A manager's internal message can target an individual, a group, a department, or the entire company. The nature of the audience determines the other steps in the communication process.

What is the intention of the message? Proactive messages may take different forms than reactive messages. Some messages inform; others persuade. The manager should know the desired outcome in advance.

When will the message be sent? Delivering messages early in the business day allows time for responses and reactions. Messages presented at the end of the day give the audience time to deliberate overnight. A message transmitted on Monday has a different context than one sent on Friday afternoon.

Where will the communication take place? A formal companywide meeting exudes a different meaning from a bulk email sent to all members. Context, such as an outside presentation in front of the home of�ice building, provides a powerful element of the message to be sent.

How will the message be sent? Managerial communications are offered in numerous ways. Each best �its individual circumstances and the message itself.

As an example, in the early 2000s, the Arthur Andersen accounting �irm contained several major divisions, one of which was Andersen Consulting. A legal decree, based on a series of usual circumstances, dictated that the larger corporation must spin off the consulting division into a separate company.

The top management team at the former Andersen Consulting knew that the �irst step would be to create a new name or brand for the independent company. After careful consideration, the CEO announced an organization-wide contest for members to suggest the new name. In that case, the protocol was:

Who: CEO and top management to all members of the newly formed company.

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What: proactively inform employees that a contest to develop a new brand name would begin.

When: the contest commenced immediately and ended after 60 days.

Where: worldwide.

How: a companywide memo indicating all of the details of the contest.

The number of innovative names that were suggested amazed the operators of the contest. Entries were pared down to a small set of possibilities, and then to three �inalists. After careful deliberation, a winner was chosen. The proclamation of the new company name took place in this way:

Who: CEO to all members of the company.

What: reactively announce (inform) the winner and new company name.

When: immediately, with implementation beginning the same day.

Where: worldwide.

How: a teleconference connected every outlet of the company.

The name Accenture was selected. Within hours, signage changed, new letterhead was designed, advertisements were created announcing the new name, and every other facet of the company affected by the name change was addressed. The successful beginning to this drastic alteration was the analysis of the situation (Accenture, 2000).

Establish a Message Format

A communication message format consists of the text of the message along with any visuals. Four elements of design include attracting attention, preparing the information to be transmitted, �inding ways to reach the audience, and developing methods to ensure understanding and compliance.

Many aspects of a communication attract attention. The headline or message announcement can draw notice. A headline may take the form of the message line in an email, the banner at the top of a memo, or through attractive and exciting visuals. In the case of Accenture, the announcement of the contest in written form could have contained a cover with art and an exciting title, such as "Win this contest!" When the contest winner was announced, attention was gained by holding a worldwide teleconference to make the announcement. The event was set up by �irst informing all employees via email that the winner had been chosen, which gave employees time to gather together to watch the announcement on television screens.

Information may be formulated in several ways. The primary consideration normally will be the type of message to be presented. Informative messages often use a standard presentation format, or:

Introduction and forecast of the message parts Body that presents the message in distinct units Conclusion that reviews the units and message

In essence, the standard presentation format consists of "tell them what you're going to tell them, tell them, then tell them what you told them." It focuses on recall and retention. Visuals take the forms of bullet points in PowerPoint slides, charts, graphs, and summary statements. A photo or illustration can reinforce the message. Messages usually are factual, to the point, and not dramatic (Wiig & Wilson, 2000).

In contrast, an unfolding presentation format often accompanies a persuasive message. The approach involves building a logical sequence of arguments leading to a dramatic, persuasive conclusion. In essence, A leads to B, B leads to C, and C leads to D. A may be, "We need to cut costs in order to remain competitive," and B is, "to cut costs, we need to lower our employee expenses." Then C is, "our largest employee expense is bene�it packages," leading to D, "if we want to stay in business, employees are going to have to agree to fewer bene�its."

The leaders of General Motors made such an argument with regard to health care expenses in the late 1990s. Company executives pointed out that health care costs contributed to the overall cost of producing each car, leading to a competitive disadvantage when compared to foreign car manufacturers that did not provide health care coverage for employees (Connolly, 2005). Naturally, the argument met with a great deal of resistance from employees and unions.

Unfolding presentations may be accompanied by emotional visuals and often by dramatic or inspiring music that build to a crescendo as the major conclusion is drawn. The language used in unfolding presentations will often be more emotive, relying as much on emotions and logic to make key points, such as, "We don't want to see the company fail, do we?"

Written unfolding presentations include extensive use of oversized print, boldface, italics, underlines, and exclamation points. As an example:

You don't want foreign companies to take away our customers, do you?

Many of you have probably received unfolding presentations using persuasion techniques from political parties in email or standard mail �lyers.

For Review

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Digital Vision/Thinkstock

Many management communication messages are developed and re�ined through collaborative efforts.

When designing formal communication messages, what two presentation formats may be used? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

The standard presentation format and the unfolding presentation format.

Develop the Message

A single individual or a team can carry out the next step in the process, developing the message. Effective writers and speakers may not require the assistance of others. Those with fewer talents in these areas, or those who prefer collaboration, pull together sets of people with unique abilities. A high- quality verbal or written message product combines the words, images, and sounds that present the message product as intended.

Verbal message products include interpersonal communications, meetings, presentations, and speeches. Written message products include letters, memos, emails, proposals, and special reports. Much of this text is devoted to helping you create high-quality messages.

Authenticate the Approach

Authenticating the approach involves making sure the message will be communicated as intended. A thorough veri�ication process includes a review of the goals, audience, media, message development, and timing of the message product release. An effective communicator knows that, more often than not, the secret to presenting an effective message involves not just writing the words, but several rounds of rewriting and revising the message, and then knowing exactly when to release it.

During the process of authenticating the approach, all information provided in the text and in visuals should be rechecked for accuracy, in both oral and written presentations. The same is true of the message itself. Remember that an emotional or persuasive presentation may run a greater risk of leading the audience to misinterpret words. This suggests that a major part of the process involves understanding how the message will be received.

For Review

What are the four steps involved in the management communication process? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

The steps are assess the communication environment, establish a message format, develop the message, and authenticate the approach.

Explain the natures of proactive and reactive managerial communications. (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

Proactive messages announce a change, initiative, innovation, or some other new course or direction. They proclaim the company will move into a new territory or use a new method. Reactive messages respond to circumstances, such as a crisis, problem, or event.

Types of Messages and Communication Goals

Company leaders guide organizations through dull periods and dramatic challenges. Messages vary from straightforward concepts to complex presentations designed to change attitudes, opinions, or values. Table 3.1 indicates a series of messages and their goals and the corresponding degree of complexity associated with each goal.

Table 3.1: Messages and goals

Type of Message or Goal Degree of Message Complexity

Remind Schedule/coordinate

Lowest

Inform Solicit input Report �indings

Moderate

Persuade Highest

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A message designed to remind can target individuals, groups, or the entire organization. Reminders of meetings, deadlines, and other time-related issues are commonplace. Messages that schedule or coordinate activities are sent to sets of individuals working on a common project or task. Planning processes dictate schedules. Informational messages vary more widely. At times, the information can be relatively mundane; at others, key organizational events, outcomes, or decisions are transmitted. Soliciting input ranges from collecting opinions to gathering full sets of data in order to make the most informed decision possible. Reporting the �indings requires complete descriptions of an analysis and may invite further discussion and evaluation. The greatest message complexity occurs in attempts to persuade, because either a logical or emotional presentation designed to change an attitude must be constructed. Faulty reasoning or lack of a compelling argument may cause the persuasion attempt to fail (Burnes, 2004).

Patterns of Communication

Each organization is unique. Company leaders design organization structures suited to the organization's unique needs. The same is true of communication systems. At the same time, in the case of both organizational structure and communication systems, certain identi�iable patterns emerge. Four of the more common in business settings are the chain, wheel, circle, and all-channel communication patterns, as displayed in Figure 3.1 (Guetzkow & Simon, 1955).

Figure 3.1: Patterns of managerial communication

The four most common patterns of managerial communication include the chain, wheel, circle, and all-channel forms.

Source: From Grif�ing/Moorhead, Organizational Behaviour, 7th ed. Copyright © 2004 South-Western, a part of Cengage Learning, Inc. Adapted by permission. www.cengage.com/permissions

Chain

The chain approach to management communication parallels the term "chain of command" or "hierarchy of authority." Messages �low primarily in two directions, upward and downward. Top managers issue orders and relay decisions to middle managers. Middle managers transfer the information to �irst- line supervisors. First-line supervisors inform entry-level workers. Questions, inquiries, and requests for clari�ication follow the reverse order.

Directives sent through the chain approach to management communication indicate centralization: a form of organizational structure in which a low degree of delegation of decision-making, authority, and power takes place. Lower-level employees become "order takers" and "order followers" in such a system. Managers and employees who violate the chain of command by communicating directly with other departments "walk the gangplank," by disrupting the communication system, in the words of noted management scholar Henri Fayol (1949). The chain design can be characterized as a mechanistic approach to organizational communication, largely driven by rules, procedures, titles that indicate organizational status, and formal relationships between employees (Woodward, 1958).

Figure 3.2: An organizational chart

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The chain model often accompanies a centralized form of organizational structure.

The chain design offers bene�its to certain types of organizations. Figure 3.2 provides an example of a basic organizational chart. The chart �its a chain design in which precision in carrying out tasks or assignments holds high priority. Military and police organizations serve as prime examples; however, the chain only works well within the organization rather than when one unit (police) must coordinate with other units (�ire, storm cleanup departments, etc.). The chain model can also be found in companies that produce standardized products, with few needs for innovation or change.

Wheel

In a wheel arrangement, a manager or supervisor becomes the center of the wheel, with individual spokes, or communication channels, connecting the manager to subordinates. In such a system, the manager retains information and dispenses it to employees as needed, serving as a control center. Individual employees communicate only with the manager and not with one another.

The wheel approach may be used in task forces or project teams, especially when members are disbursed geographically. For example, should a team be formed to identify and purchase a new manufacturing site, members of the group may be sent to a variety of locations where they collect information about the costs of land, the availability of contractors and laborers, access to transportation systems, the nature of the local government, prevailing wages, and other factors. Each reports to the head of the task force, who then can relay the information to decision-makers. A similar situation arises when teams are disbursed to various countries to identify those that would be targets for international expansion.

Normally, a wheel approach would not �it an ongoing managerial circumstance. Over time, employees are not usually isolated from each other on a continuing basis. Exceptions are possible, such as when a series of park rangers reports to a central of�ice regarding �ire threats and other activities in the park system.

Circle

A circle resembles the wheel approach, only without the central hub. In a circle system, members communicate freely with other members, even when one member of the circle is the formally designated leader. The �low of communication, however, goes around the wheel, clockwise or counterclockwise. This method matches work that takes place sequentially. One member's end product becomes the beginning point for the next member.

The circle approach may be found in task force operations as well as in laboratory settings in which experiments take place in a carefully constructed format. It might also �it certain creative endeavors, such as preparing advertisements or market research projects.

All-Channel

In an all-channel communication arrangement, messages move freely across organizational ranks and members of a team, group, or department. Members determine the persons that should receive messages, regardless of title or status.

The all-channel approach creates decentralization, or an organizational operation characterized by substantial delegation of authority (Goodman & Pennings, 1979). The system represents an organic approach to communication structure, with few rules, little attention paid to titles and ranks, and a

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strong emphasis on organizational �lexibility and adaptability (Woodward, 1965).

The all-channel approach to communication design matches an increasing number of departments and companies. Many Internet �irms, such as Google, maintain open work spaces in which doors and walls are not used. Employees move about freely and are encouraged to develop and propose new, innovative ideas. Managers work side-by-side with other organizational members.

The all-channel method empowers employees and encourages innovation. Consequently, it has often become the method of choice for research and development departments as well as other units that emphasize creativity.

Table 3.2: Managerial messages and communication systems

Pattern Common Messages

Chain Memo/directive, bulk email, formal presentation by manager, little or no feedback expected

Wheel Interpersonal conversations, email exchanges, calls, meetings directed by a supervisor, feedback needed

Circle Checklist with notation when task is completed, interpersonal conversations between members, emails, calls, less-structured meetings with feedback expected

All- Channel

Interpersonal conversations, unstructured meetings, emails, calls, constant feedback in all directions

In summary, you probably would not be able to go into a company and quickly identify the communication pattern. Some clues may be obtained from the information provided in Table 3.2. Most organizations, however, contain elements of least two of the systems. Some projects are directed using a wheel, others with a circle (Lim & Benbasat, 1991). Other companies may maintain an all-channel approach organization-wide, but use a wheel or circle in certain circumstances. The least-�lexible chain approach, while less common, may be the most visible to an outsider.

Concept Check

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3.2 Formal Communication and Channels Learning Objective # 2: What roles do formal communication and the use of various formal communication channels play in managerial processes?

The messages and channels described in the previous section apply to formal communication systems. Formal communication consists of information that travels through organizationally designated channels. Formal communication takes the form of verbal transmissions and written media. The channel selected by a manager depends on the type of message to be sent.

For Review

What four primary patterns do formal managerial communications exhibit? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

The chain, wheel, circle, and all-channel patterns.

Types of Formal Messages

Formal communication systems move information throughout the organization. The information can travel upward, downward, laterally, or in all directions at once. The most common types of messages transmitted via formal channels include:

Job instructions Job rationale Standardized information Team and group coordination Questions and answers Decisions and plans Ideological indoctrination

Job instructions appear in many forms. A direct address by a supervisor instructs an employee how to carry out a task or set of tasks. Employee training programs provide information to new hires. Performance appraisal systems correct ineffective performance. Mentoring programs render additional insights and information about how to successfully perform a task or job.

A job rationale answers the "why" questions. In other words, managers explain why a job should be completed in a certain way and the reasons the job is important. A manager provides the rationale for the job when he or she tells the employee, "We do the job this way, because it saves time" or, "We ask you to compile sales statistics by store so that we know which products do well in each unit, and which do not."

Standardized information consists of items that apply equally to everyone in the �irm, or to every person in a given department. Examples are the company's list of rules, protocols for evacuation in case of an emergency, plus any procedures that apply to speci�ic units in the company. Standardized information in a retail store consists of how inventory will be managed (move the oldest merchandise to the front of the shelf), how cash will be handled (leave $100 in bills and coins in the register each day), plus protocols for accepting two-party checks and other forms of payment. Standardized information in the production department includes safety procedures and rules, and methods for completing each task. Standardized information in accounting contains messages about which procedures are used, such as methods of depreciation and methods of valuing inventory.

Team and group coordination messages set meeting times, dates, and deadlines, plus help to establish relationships between members. Members of the workplace safety committee know that the group meets the third Monday of each month, that a deadline for completing a report about a recent series of accidents looms, and that the committee always consists of six members, two from production, one from human resources, one from quality control, and two other individuals. Systems for electing a committee chair may also be part of the coordination effort.

Questions and answers move upward, downward, and laterally in business organizations. Questions may be posed by employees to managers, by managers to employees, or by members at the same rank, such as supervisors to one another.

Decisions and plans shape the direction of the company. Managers convey them verbally and in writing. Effective organizations chart planned courses that every employee can understand and follow.

Ideological indoctrination statements tell employees, "This is a great place to work." At times, the message begins with a company's statement of mission. Support for ethical behaviors, social responsibility, and the conservation of resources accompanies ideas about the company's internal environment as welcoming and helpful.

For Review

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Ideological indoctrination seeks to convince employees that they are working for a great company.

What types of messages are delivered through formal communication systems? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

Among the most common types of messages transmitted via formal channels are job instructions, job rationale, standardized information, team and group coordination, questions and answers, decisions and plans, and ideological indoctrination.

Information Richness

One of the methods used to describe business and management communication employs the concept of information richness, or the potential information carrying capacity of a communication channel. At one extreme, rich communication means the channel provides opportunities for feedback, a full range of visual and audio communication, and it presents the opportunity to personalize a message. At the other extreme, a lean channel offers no venue for feedback, is impersonal, and only a limited amount of information can be transmitted (Lengel & Daft, 1988). Figure 3.3 summarizes the continuum from the leanest channel to the richest channel.

Figure 3.3: Channel richness

Source: Adapted from Lengel, R. H., & Daft, R. L. (1988). The selection of communication media as an executive skill. Academy of Management Executive, (2) August, 225–232.

The richest channels suit the most complex messages and circumstances that require discussion and interaction. Interactions take place face-to-face. As a result, the channel provides for both verbal and nonverbal transmissions. Intonation and other cues accompany the person's words. As noted in the previous chapter, these interactions resemble a dance featuring an exchange of information, ideas, and opinions. In presentations and other more formal settings (discussed in greater detail in Chapter 10), additional cues can be added through the use of visual aids, such as those created with PowerPoint, Keynote, InDesign, or printed handout materials.

Interactive channels house many of the bene�its of face-to-face meetings. Videoconferencing and conference calls retain the ability to move beyond words to in�lection and other cues. In the case of videoconferencing, visual cues are available. While not at the same level as the immediate feedback of an actual face-to-face meeting, interactive channels allow participants to visit concurrently.

Personal static channels, such as telephone calls, text messages, and instant messages, become leaner because visual elements and nonverbal cues are absent. Quick response systems such as instant messaging create what are nearly "conversations" in which questions and answers can be posed along with proposals and counterproposals. Personal static channels facilitate a great deal of today's business operations, as employees and customers communicate via these channels.

The leanest channels are those in which verbal intonation and nonverbal cues cannot be transmitted. Lean formats include most printed documents, such as letters, reports, and proposals. Standardized information with less complexity can be sent through leaner channels. In-depth explanations of complicated issues are possible; however, they are transmitted without the bene�its of other channels.

Channel richness provides an effective tool that assists in selecting the best way to send a message. Using the analysis, a manager can select the best channel for any communication effort.

For Review

Explain the concept of information richness in terms of rich and lean channels. (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

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Information richness is the potential information carrying capacity of a communication channel. Rich communication means the channel provides opportunities for feedback, a full range of visual and audio communication, and it presents the opportunity to personalize a message. A lean channel offers no venue for feedback, is impersonal, and only a limited amount of information can be transmitted.

Formal Verbal Communication Channels

Business and management communication, like every other aspect of commerce, has been drastically in�luenced by technology over the past half century. The rate of change in communication technology appears to be increasing. The result is a growing list of methods to transmit business communications and management information verbally. Beyond face-to-face interactions, the other formal verbal communication channels currently utilized on a daily basis by managers and employees are:

Telephone/mobile phone Videoconferencing Social media such as LinkedIn and Google Plus Conference calls Meetings Presentations

Additional information about presentations appears in Chapter 10. Presentations include speeches made to in-house audiences and the general public, and in public relations settings. Presentations differ from other formats because the speaker takes time in advance to shape a message and any accompanying materials, such as a PowerPoint, Keynote, InDesign, or other visual aid. Team and group dynamics are discussed further in Chapter 9.

Telephone/Mobile Phones

The telephone continues to be widely used, even though it is a less information-rich verbal communication channel. Three types of telephone calls can be made. Land lines normally offer the highest-quality signal, with less static and fading of reception. Internet-based phones such as Vonage and Skype, or similar technologies, vary in terms of the quality of transmission and reception. Mobile phones can be unreliable and often vulnerable to distortions of sound.

Currently, employers rely on all three modes of telephone for communications with employees, customers, and others. In a business context, the keys to quality phone communication can be summarized as expediency, attitude, courtesy, listening, and focus.

Expediency means that the caller and the recipient both realize that business transactions and interactions cannot routinely involve lengthy phone conversations. Successful telephone attitudes are businesslike, professional, and cordial. Courtesy includes highly restrained use of the "on hold" feature of a phone. Listening employs all of the techniques described in Chapter 2. Focus means not multitasking during calls and instead working deliberately to achieve the call's intentions.

It may be helpful to jot down a few notes, or talking points, prior to making or receiving a call. If necessary, some messages may be almost "rehearsed" before dialing. Rambling, incoherent calls often alienate the recipient. Table 3.3 summarizes other keys to effective telephone conversations.

Table 3.3: Keys to effective telephone conversations

Call Initiation

Caller:

Identify yourself, your company, and the reason for the call.

Receiver:

Ask how you can help.

Both:

Use a friendly helpful tone.

During the Message

Caller:

Directly state the issue to be resolved.

Receiver:

Clarify any request or transmission of a message.

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Jupiterimages/Thinkstock

When leaving a message on voice mail, clearly identify yourself your company, and a return number, and make a short statement about the purpose of the call.

Both:

Take notes of what transpires. Repeat key points.

Call Resolution

Caller:

Summarize the call's purpose and desired response or action.

Receiver:

Indicate what action will be taken, such as referral to others, will call back with an answer, etc.

Both:

Collect follow-up names and numbers if other parties will be involved in the resolution.

Ending the Call

Both:

Make sure caller and receiver are both satis�ied. Thank the other person for his or her time.

Source: Cornett, J. E. (2011). Techniques for effective telephone communication. eHow, Money. Retrieved from http://www.ehow.com/way_5749408_techniques-effective-telephone- communication.html (http://www.ehow.com/way_5749408_techniques-effective-telephone-communication.html)

Additional advice includes returning calls promptly. Never implicate a secretary or some other employee as an excuse for failing to return a call. Try to answer the phone before it rings four times.

When leaving a message on voice mail, clearly identify yourself, your company and a return number, and make a short statement about the purpose of the call. Also, note times you can be reached with return calls. Remember to take into account time zone differences when the call is to another part of the country or world.

Videoconferencing

A videoconference involves many of the same issues as an in-person meeting. People must �ind time in their schedules to be in the right place, an agenda should be prepared in advance, time frames are established, and managers must be certain to guide the conference so that all items are covered in a timely fashion. Guidelines for attending and managing videoconferences are provided in Table 3.4.

Table 3.4: Videoconferencing protocols

Manager or Leader Participants

Schedule the meeting in advance Con�irm your availability

Con�irm the time with all participants Con�irm your commitment

Arrive early to make sure the system works Prepare for participation with notes, papers

Ask each participant to identify him/herself Identify yourself when you speak

Don't read prepared statements Keep your language and ideas precise

Stop people from rambling Don't ramble

Summarize, reinforce key ideas Compliment good ideas

Finish on time

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Distribute minutes of the videoconference

Both

Wear clothing that plays well on a screen

Write down the names and locations of all participants

Try to make eye contact with the camera

Don't become frustrated by delays

Speak a little more slowly than your normal rate

Don't engage in side conversations with others at your site

As a communication medium, videoconferencing generates visual contact in the sense that you can see people in other locations. At the same time, eye-to- eye contact cannot be made. Discerning other nonverbal cues also becomes more dif�icult. Distracting technological problems can occur. Time differences should be accounted for. A meeting scheduled for 1 p.m. on the East Coast will be noon (lunch time) in the Midwest. A 4 p.m. meeting on the West Coast means someone in New York would have to stay until 7 p.m. to take the call. Calls from the United States to other countries must also be carefully scheduled to take into account differing time zones.

Videoconferencing as a management communication medium is likely to increase in the coming years. Improved picture quality, declining costs of operation, convenience, and increasing costs for physical travel make videoconferences an attractive option. Many managers have concluded that this slightly less information-rich venue provides a high-quality alternative to �lying and staying in hotel rooms across the country and around the world.

Conference Calls

Conference calls continue to experience wide usage. Conference calls provide a low-cost option to gather a limited number of people to verbally communicate in real time. The protocols that apply to meetings and videoconferencing events are the same for conference calls. Participants receive advance notice, a small agenda, and should also be given follow-up descriptions of the conversations.

Conference calls are leaner information channels than videoconferencing, because of the lack of visual contact of any kind. Vocal messages and in�lections are transmitted; however, nonverbal cues and other methods of transmitting information are absent.

In addition to the advice given for videoconferencing, extra care should be given to the phone device. Make sure you are close enough to be heard on a speaker phone. Remember that your voice stops the signal coming from the other end of the line. Allow time for responses and pauses. Also be aware of distractions you can cause by shuf�ling papers, tapping on a table, chewing gum or candy, or in other ways.

Concept Check

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iStockphoto/Thinkstock

A formal meeting or "being called into the bosses' of�ice" often creates a degree of anxiety in the employee's mind.

3.3 Verbal Face-to-Face Interactions Learning Objective # 3: What are the keys to successful face-to-face meetings with other employees?

Even in today's fast-paced, highly technologically dominated world, a considerable amount of business and management communication still take place in person. Many times, only a face-to-face meeting ful�ills the purpose. Members at every level of the organization experience in-person verbal communication on a daily basis.

Verbal communication in person offers the richest communication channel, because information transfers in the forms of verbal cues, facial expressions, bodily movements, appearance, the use of space, the use of time, physical contact, and the potential to supplement messages with other media, such as written notes, symbolic items, and electronic media. Face-to-face communication processes take place in formal conversations and casual meetings.

Formal, In-Person Face-to-Face Conversations

Formal, in-person interactions often take place as important subjects or issues arise. Examples of times when formal interpersonal meetings are in order include job interviews, direct orders by a supervisor for key job assignments, disciplinary notices, performance appraisals, and to resolve con�licts. A formal meeting or "being called into the bosses' of�ice" often creates a degree of anxiety in the employee's mind. Consequently, from a manager's perspective, a well-planned formal meeting includes the following elements:

advance noti�ication, including at least some idea about the purpose of the meeting choice of the proper setting attention to the meeting opening consideration about how the message will be presented the manner in which to close the meeting

No one likes being blindsided. Advance notice allows both parties time to prepare for what will transpire. The nature and seriousness of the meeting determine the setting. Options range from the manager's of�ice, to a conference room, to a break room, or even a walk outside. Someone about to receive a disciplinary action will probably not want to hear the news in a break room. The opening may include a handshake, an informal greeting coupled with an invitation to sit down, and often an expression of thanks for coming to the meeting.

The message presentation constitutes the most important element of a formal face-to- face meeting. The manager decides whether the meeting will take the form of a presentation or a conversation. Four methods of conducting a one-on-one meeting are: tell, sell, consult, and the joining style. A telling style largely entails presenting information and seeking comprehension. The selling style incorporates persuasion into the presentation of ideas. A consulting style encourages interaction and an exchange of ideas. The joining style represents a complete collaboration with the employee.

From the employee's perspective, preparation for a formal meeting includes thoughts about how to respond to the message. Accepting compliments with the appropriate

degree of deference communicates your intentions to be a team player. Also, remember that the employee's body language communicates as the manager is speaking. The employee should anticipate the meeting's closing. A manager who rises and makes concluding remarks is �inalizing the interaction.

Informal, In-Person Casual-Setting Conversations

Casual meetings occur at of�ice parties, company-sponsored events, break rooms, and in other venues where employees gather with no formal agenda. Face- to-face meetings with managers are often spontaneous. Preparation for such events includes trying to remember something about each person you will encounter. It can be a family event, such as a new baby or the marriage of a son or daughter, a personal event such as a recent promotion or having won a contest, or a person's favorite hobby. The ability to interact in casual settings such as these helps make the workplace experience more pleasant and often can lead to friendships or other social encounters.

Chance meetings in the hallway or parking lot can open the door to important conversations. They serve as times to remind someone about an important task, or to pass along a key piece of information, or to engage in relationship-building that enhances professional structures. Following informal greetings, it is possible to mention business-related subjects in a low-pressure context.

For Review

What steps should managers follow when setting up formal face-to-face conversations? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

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From a manager's perspective a well-planned formal meeting includes the elements of advance noti�ication, including a least some idea about the purpose of the meeting; �inding the proper setting; attention to the meeting opening; consideration about how the message will be presented, and the manner to close the meeting.

In addition to face-to-face conversations, managers and employees use what other formal verbal communication channels? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

The other formal verbal communication channels currently utilized on a daily basis by managers and employees are telephone/mobile phone, videoconferencing, social media such as LinkedIn and Google Plus, conference calls, meetings, and presentations.

Concept Check

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3.4 Informal Verbal Communication Within Organizations Learning Objective # 4: How can managers effectively manage informal verbal communication?

A substantial portion of messages transmitted in a company either does not �low through an authorized channel or is dedicated to a topic that does not serve the organization's interests. Informal communication emerges in everyday life in organizations. Other names for informal communication include gossip, rumors, and the grapevine. The military uses the term "scuttlebutt" to describe informal communication.

As a manager, you should not ignore the rumors that swirl about an organization. More important, the channel transmits a great deal of information that may have value. It will be your job to try to manage the informal communication channel. Doing so involves four activities:

1. understand how it works 2. tap in 3. transmit messages 4. deal with false rumors

Managers who tend to the informal channel appear to be in the know. Those who do not may be considered outsiders to those in the company.

Understanding Informal Communication

Four key elements should be considered when thinking about gossip. First, it travels quickly. In this electronic age, an indiscretion or rumor quickly will be posted on social media, and from there it becomes impossible to stop. Even prior to the emergence of Twitter, Facebook, and other sites, rumors have always "spread like wild�ire" (Davis, 1969).

Second, managers should understand that both information and misinformation travel through informal channels. Estimates are that nearly one-third of all rumors have faulty information or mistruths contained in them (Davis, 1975). Any rumor deserves a considerable amount of skepticism.

Third, rumors are tuned to employee needs. In essence, people gossip about the things they think are interesting. Table 3.5 provides common gossip topics.

Table 3.5: Rumor subjects

Employee pay (especially in closed pay systems in which salaries are not disclosed to employees)

Personnel decisions

Who will be promoted? Who is about to be terminated? Who will be transferred? Who will be laid off?

Company strategic direction

Outsourcing Layoffs Acquisitions and Mergers

Of�ice romances

Sexual identities/orientations of co-workers

Con�licts between organizational members

Source: Adapted from Baack, D. (1995). Organizational behavior. Houston: Dame Publications, p. 326.

Fourth, gossip creates social power. Informal communication includes elements of socialization in which those who have access to rumors feel socially included (Kurland & Pella, 2000). Four aspects of social power created by gossip are reward power, coercive power, expert power, and referent power.

Positive gossip, or saying favorable things about other people, generates reward power. When a co-worker shares positive news about a colleague, people often attribute positive characteristics to the person sending the message. The transference results from rewarding others (French & Raven, 1959).

Negative gossip creates coercive power, based on the ability to punish. Someone passing along a negative message about a co-worker may create the perception that he or she has additional negative information about other organizational members. Holding this type of information generates the potential to damage careers and can be used to threaten others (Emler, 1994).

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Oftentimes, gossiping becomes the equivalent of playing with �ire.

Gossip in�luences referent power, or power based on social status and likability. Someone who gossips draws recipients into a social circle (Dunbar, 1996). Recipients may believe the gossiper has social in�luence and is an insider in a social network, especially when the gossip is positive. On the other hand, a negative gossiper may lose referent power, because recipients believe that providing the information is improper or even immoral, leading them to look unfavorably on the gossiper (Levin & Arluke, 1987).

Gossip may increase a person's expert power, or in�luence gained by having knowledge and expertise. The gossiper gains power based on perceptions that the person has access to relevant information about the work environment. Over time, the gossiper becomes viewed as a person who helps others adapt to the workplace (Kurland & Pelled, 2000, p. 430).

In general, spreading gossip can increase or diminish a person's power. Oftentimes, gossiping becomes the equivalent of playing with �ire. Some negative consequences of workplace gossip may include:

Lost productivity and wasted time Erosion of trust and morale Increased anxiety among employees as rumors circulate without any clear information as to what is fact and what is not Growing divisiveness among employees as people "take sides" Hurt feelings and reputations Jeopardized chances for the gossipers' advancement, as they are perceived as unprofessional Attrition as good employees leave the company because of the unhealthy work atmosphere

Tap In

In the past, managers would seek to �ind ways to hear what was being passed along informally. The phrase "having a pipeline" describes this activity. With the emergence of instant messaging and social media, discovering what employees are talking about has become increasingly simple. The manager can then determine which rumors demand a response and which do not.

Sending Messages

As the previous section suggests, most of the time, rumors should be avoided. The best messages to be sent informally are positive news. Managers can pass along compliments informally, with positive results for the person being complimented as well as for the manager, who will be seen as being generous with praise.

Some managers also will engage in "trial balloons," whereby ideas are tested informally. A manager in a break room asks how salespeople would feel if the company moved from a commission-only pay system to a salary-plus-commission program, in order to reduce pay volatility and levels of stress. Clearly, the sales team will talk about the idea, and the manager will receive feedback. Kicking around ideas can be a useful managerial tool, especially when employees trust the manager.

Dealing With False Rumors

The presence of continuing false rumors means managers should be continually aware of what happens in the channel. Many times an untrue piece of gossip lingers simply because telling it is more fun than revealing the truth. At times, persistent rumors have been called urban legends in the workplace. Action should be taken when a negative rumor continues to damage the standing of an employee or of the company.

Two primary strategies exist for dealing with false rumors. The �irst option involves formally refuting the rumor. Managers can send messages in either verbal or written form contradicting the derogatory information. Such messages must be carefully crafted or they run the risk of making a rumor more credible. The best approach includes presenting tangible evidence that a rumor is inaccurate.

The second strategy relies on dealing with the rumor in the channel. A manager can simply pull aside key employees and talk about why the story is not true and point out the damage the rumor has caused. The manager can also suggest that if the gossiper is discovered, consequences will follow (Davis, 1975).

For Review

What should a manager do with regard to informal communication? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

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Ryan McVay

Coping with falsehoods sent through informal communication channels represents both an art and a science.

It will be your job to try to manage the informal communication channel. Doing so involves four activities: understand how it works, tap in, use it to transmit messages, and deal with false rumors.

What should a manager understand about informal communication or rumors? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

Rumors travel quickly, contain both information and misinformation, they are tuned to employee needs, and they create social power.

What four kinds of social power can be generated by gossip? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

Positive gossip, or saying favorable things about other people, generates reward power. Negative gossip creates coercive power, based on the ability to punish. Gossip in�luences referent power, or power based on social status and likability. Gossip may increase a person's expert power, or in�luence gained by having knowledge and expertise.

Meshing Formal and Informal Communication

Formal communication channels provide key information to key personnel so that tasks can be successfully completed on schedule. Managers spend time crafting verbal messages to be presented in the proper setting and in the proper tone. Employees who pay attention to formal messages succeed. Those skilled at formal communication enjoy a major career advantage.

Verbal informal communication continues to be a natural part of the workplace. Knowing that rumors will persist and the kinds of subjects that are fertile grounds for gossip, and that they can be a source of social power, all imply that managers should become involved in the channel. A continuing debate revolves around the question of whether managing constitutes an art or a science. In truth, both elements contribute to a successful managerial style. Coping with falsehoods represents both an art and a science.

Ethical Implications of Informal Channels

Beyond formal verbal channels, informal channels make work life more interesting. People gossip because it's fun. As an ethical employee, avoid passing along harmful messages, whether they contain truth or not. You should be especially unreceptive to statements that demean others based on gender, race, religion, sexual orientation, or other personal characteristics, such as being overweight. A substantial amount of popular press suggests completely avoiding gossip, simply because it makes you look "small."

From a larger vantage point, however, recognizing that informal channels do present truthful, favorable messages represents an opportunity. You can become known as the employee who always puts in a good word about others. In that way, informal communication can complement and supplement formal messages in a pleasant and positive fashion.

Concept Check

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Medioimages/Photodisc

The "V" signal made with two �ingers meant "victory" during World War II in England, "peace" during the Vietnam war in the United States, and is an obscene gesture in some cultures.

3.5 The Role of Nonverbal Communication Learning Objective # 5: What role does nonverbal communication play in presenting and receiving messages?

In interpersonal communication, the tone, the actual words, and the nonverbal cues complement and complete every message, which means nonverbal cues deserve careful attention. Nonverbal communication plays a major role in one-on-one interactions.

Nonverbal communication takes place in a context in which the same words may have different meanings. It consists of several cues being transmitted simultaneously (raised eyebrows when passing along a rumor). Social norms dictate whether various nonverbal cues are acceptable or should be discouraged, for example, using obscene gestures will likely be frowned upon on the job. Nonverbal cues provide information about the verbal message and are considered in that context (deVito, 2009).

The concept that nonverbal communication takes place in a context suggests that folding your arms and leaning back, in one context, may mean you're relaxed and are taking everything in; in another, the same body language suggests frustration or boredom. Packages or clusters of nonverbal cues are normally transmitted, which means that not only do words matter, but also eye contact, hand gestures, posture, pacing, facial expression, leg movements, and breathing will be considered simultaneously with the words. Social norms strongly in�luence the interpretation of nonverbal cues. The "V" signal made with two �ingers meant "victory" to Englanders during World War II, "peace" to Americans in the United States during the Vietnam War, and is an obscene gesture in some cultures. A wink signals �lirtation in one context and that "you're an insider" in another.

Nonverbal communication may transmit a message or meaning that contradicts what is being said verbally. Someone who disagrees with you may verbally signal

concurrence but will send other signals, such as looking away or looking down, that contradict the message. The combination of verbal and nonverbal cues can send a strong message. A person expressing adamant support for an idea may pound a �ist or shake one in the air.

Nonverbal cues communicate even when you are trying to avoid sending a message. When you are sad or frustrated, body language may send that message even when the words are "I'm okay" or "I'm �ine."

Forms of Nonverbal Communication

Many forms of nonverbal communication take place. People make judgments about the words you speak, but many other factors come into play as they interpret the message. Among the more notable forms of nonverbal communication are:

kinesic cues appearance dress artifacts touch space paralanguage time manners

Kinesic Cues

Kinesic cues are messages communicated by nonlinguistic body language or movements. These include messages conveyed by various parts of the body (Birdwhistell, 1970). Examples of kinesic cues are provided in Table 3.6.

Table 3.6: Selected kinesic cues and interpretations

Body Element Movement Interpretation

Head Nodding Agreement, listening

Tilting Interest

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Appearance contains elements that you can control and some that are less controllable.

Downward movement Defensiveness

Eyes Gazing Attentive, honesty

Shifting, darting Uncertain, lying

Staring Intimidation

Mouth Smile Enjoyment, pleasure

Shoulders Learning forward Interest, rapport

Leaning away Lack of interest, skepticism

Slouching Low self-esteem

Hands Touching others Powerful

Touching self Nervous, anxious

Hand over mouth Wishing to escape

Hands on hips Challenging

Arms Crossed Closed to ideas, bored

Sources: Adapted from Pentland, A. (2008). Honest signals: How they shape our world. Boston: M.I.T. Press, 10–40, 105, and Malandro, L. A., & Barker, L. (1983). Nonverbal communication. Reading, MA: Addison-Wesley Publishing, 226–230.

Appearance

Appearance contains elements that you can control and some that are less controllable. The less controllable element is physical appearance in terms of what others consider to be attractive. Several studies indicate that people who are physically attractive enjoy a kind of halo effect, in which others assume they are more intelligent, witty, charming, and even more honest (Harper, 1993; Schoenberger, 1997).

The other component of appearance can be controlled. Hairstyles, dress, and the use of make-up also convey nonverbal images and messages. Think, for example, of how you react to someone wearing sunglasses indoors in a dark room or at night. Gaudy makeup or ostentatious hairstyles attract a certain type of attention, which may convey the image of being unprofessional or of someone who need not be taken seriously. Tattoos also send messages, especially visible, extreme versions. Women wearing low-cut, provocative, and revealing clothing send different nonverbal messages than those with conservative out�its. Men who insist on unbuttoning one more button to reveal more chest also send messages.

Artifacts

Artifacts include additional items, such as jewelry, eyeglasses, and even the car you drive. Piercings, while more common, still connote an element of rebellion to many people. Both men and women notice expensive rings, necklaces, and other forms of jewelry. And, some may judge a person who drives an old, beat-up car as less successful and talented than an individual in the same profession who drives an upscale vehicle.

Touch

Physical touch has undergone a metamorphosis, in terms of what may be considered acceptable or unacceptable. An incident involving President George W. Bush placing his hands on the shoulders and neck of German chancellor Angela Merkel created a great deal of consternation. Hugging, back-slapping, and other forms of touch have largely been removed from the workplace, unless express permission has been granted.

One element of touch, the handshake, continues to convey important messages. A �irm handshake accompanied by eye contact expresses con�idence. A weak handshake with eyes averted signals shyness and other less desirable traits (Brown, 2000). For both men and women, a �irm handshake can create a favorable �irst impression. At the same time, always be aware of the potential that the other person has arthritis or another condition which would make a �irm grip painful.

Space

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Space, or physical distance, sends powerful signals. Substantial evidence suggests that the concepts of personal space vary widely by culture. In the United States, maintaining physical distance creates a certain level of comfort. Someone who feels that his or her personal space has been invaded quickly becomes defensive. Table 3.7 indicates the �ive levels of personal space.

Table 3.7: Levels of personal space

Level Distance Communication

Public 12–15 feet To feel protected

Eye contact may or may not take place

Able to move freely past the person

Social 3–12 feet Making eye contact, shaking hands

Casual conversations

Formal Business 7–12 feet Greater distance implies social power

Distance from visitor chair to CEO chair in an of�ice

Personal 18 inches–4 feet People are able to touch each other

Expresses closeness "at an arm's length"

For friends and family members

Not appropriate for business

Intimate 18 inches or less Expresses closeness and affection

Uncomfortable when forced upon a person

(Elevators, subway cars, airline seats)

Source: Hall, E. T. (1982). The Hidden Dimension. New York: Doubleday.

Violating personal space, or "getting in someone's face," indicates aggression and often accompanies an argument or more violent interaction. Effective communicators are always aware of the proper distance.

Paralanguage

Paralanguage refers to how something is said rather than what is said in a message. Key elements include tone, phrasing, pacing, pitch, and intensity (Knapp & Hall, 1992). Paralanguage changes messages from surprised to sarcastic, such as, "Oh really?" Pacing indicates when a person wishes to speak or to stop speaking. Paralanguage conveys urgency, especially through pitch. As a speaker in a conversation, awareness of how you are delivering a message plays an important role. The wrong paralanguage disputes the words that you say.

Time

Time contains two elements: punctuality and promptness, and the pace of life, including business transactions. In terms of punctuality, in North America, a strong emphasis on being early or on time exists. Failure to arrive on time signals either irresponsibility or disrespect of the person you have inconvenienced by being late. In many other cultures, being late may be fashionable or is at least to be expected. Knowing the arrival habits of business partners constitutes an adjustment for many persons engaged in international commerce.

The pace of life determines the use of time. In cultures where time takes on the characteristics of a commodity, such as in the phrase, "time is money," it is not to be wasted. Saving time constitutes a virtue. Other cultures view time in different ways, seeing it as polychromic, with many types of time and many uses of time (Hall, 1989).

To be on the safe side, your best bet in the United States is to develop a reputation for being punctual. In the event of an accident or unavoidable delay, contact the person you were to meet and explain in advance why you will be late. Failure to do so may harm the business relationship. Chronic tardiness will likely inhibit your career. Being known as someone who is punctual creates a major career asset.

Manners

Finally, manners represent an under-appreciated aspect of both verbal and nonverbal communication. Cultural norms have shifted over time, and what was considered common courtesy in the past has changed today. At the same time, you can gain a career advantage by demonstrating good manners. Some examples include:

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iStockphoto/Thinkstock

Factors including time, distance, kinesic cues, and paralanguage affect individual conversations.

Opening the door for others, regardless of gender, with a pleasant greeting. Avoiding the use of profanity in formal business relationships, even when those around you curse. Keeping your mouth closed while chewing food; not talking with food in your mouth. Letting others �inish their sentences without interrupting. Generous use of "please" and "thank you." Generous use of compliments for work, effort, and cooperation rather than remarks about appearance.

In summary, nonverbal cues dictate a great deal of what we communicate and how we communicate. Taking the time to understand the effective use of nonverbal communication, including appearance, dress, artifacts, touch, space, paralanguage, time, and manners, helps you become a more effective businessperson.

For Review

What are kinesic cues?

(http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

Kinesic cues are messages communicated by nonlinguistic body language or movements.

In addition to kinesic cues, what other forms of nonverbal communication occur? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

Among the more notable forms of nonverbal communication that are beyond kinesic cues are appearance, dress, artifacts, touch, space, paralanguage, time, and manners.

What is paralanguage? (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm#)

Paralanguage refers to how something is said rather than what is said in a message. Key elements include tone, phrasing, pacing, pitch, and intensity.

Concept Check

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3.6 Chapter Review This chapter explores the process of creating managerial messages through verbal and nonverbal channels. The management communication process consists of four activities, which are to assess the communication environment, establish a message format, develop the message, and authenticate the approach.

Proactive messages announce a change, initiative, innovation, or some other new course or direction. They proclaim the company will move into a new territory or use a new method. Reactive messages are responses to circumstances, such as a crisis, problem, or event. Analyzing the situation consists of the evaluation of all Ws and Hs associated with the message.

In the case of both organizational structure and communication systems, certain identi�iable patterns emerge. Four of the more common in business settings include the chain, wheel, circle, and all-channel patterns. The chain approach to management communication parallels the term "chain of command" or "hierarchy of authority." In a wheel arrangement, a manager or supervisor becomes the center of the wheel, with individual spokes, or communication channels, connecting the manager to subordinates. A circle resembles the wheel approach, only without the central hub. In an all-channel communication arrangement, messages move freely across organizational ranks and members of a team, group, or department.

Formal communication consists of information that travels through organizationally designated channels. The most common types of messages transmitted via formal channels include: job instructions, job rationale, standardized information, team and group coordination, questions and answers, decisions and plans, and ideological indoctrination.

Information richness is the potential information carrying capacity of a communication channel. Rich communication means the channel provides opportunities for feedback, a full range of visual and audio communication, and it presents the opportunity to personalize a message. A lean channel offers no venue for feedback, is impersonal, and only a limited amount of information can be transmitted.

Beyond face-to-face interactions, the other formal verbal communication channels currently utilized on a daily basis by managers and employees are telephone/mobile phone, videoconferencing, social media, conference calls, meetings, and presentations. Verbal, nonvirtual face-to-face interactions include formal, in-person conversations and informal, casual conversations.

Informal communication emerges in everyday life in organizations. Other names for informal communication include gossip, rumors, the grapevine, and scuttlebutt. Four key elements should be considered when thinking about gossip: it travels quickly, it contains information and misinformation, it is tuned to employee needs, and it creates social power. Managers should understand the channel, tap in, use it to transmit messages, and deal with false rumors. Many times there are negative consequences to informal rumors. Successful managers effectively merge formal and informal communication. Effective employees understand and avoid the negative potential effects of informal communication.

In interpersonal communication, nonverbal cues complement and complete every message. Among the more notable forms of nonverbal communication are kinesic cues, appearance, dress, artifacts, touch, space, paralanguage, time, and manners. Kinesic cues are messages communicated by nonlinguistic body language or movements. Paralanguage refers to how something is said rather than what is said in a message, including tone, phrasing, pacing, pitch, and intensity. Effective interpersonal and formal communicators are aware of the messages they transmit through nonverbal cues.

Key Terms

centralization (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

A form of organizational structure in which a low degree of delegation of decisionmaking, authority, and power takes place.

decentralization (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

An organizational operation characterized by substantial delegation of authority.

formal communication (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

Consists of information that travels through organizationally designated channels.

informal communication (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

Information that does not �low through authorized organizational communication channels and is dedicated to topics that do not serve the organization's interests.

information richness (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

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The potential information carrying capacity of a communication channel.

kinesic cues (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

Messages communicated by nonlinguistic body language or movements.

mechanistic (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

An approach to organizational structure largely driven by rules, procedures, titles that indicate organizational status, and formal relationships between employees.

organic (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

An approach to communication structure, with few rules, little attention paid to titles and ranks, and a strong emphasis on organizational �lexibility and adaptability.

paralanguage (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

Refers to how something is said rather than what is said in a message, using the elements of tone, phrasing, pacing, pitch, and intensity.

proactive messages (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

Messages that announce a change, initiative, innovation, or some other new course or direction.

reactive messages (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

Responses to circumstances, such as a crisis, problem, or event.

standard presentation format (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

A message presentation method consisting of introduction and forecast, a body, and a conclusion.

unfolding presentation format (http://content.thuzelearning.com/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/sections/fm/books/AUBUS600.12.2/section

A message presentation method in which one argument leads to the next and �inally to a conclusion, often used in persuasion.

Analytical Exercises

1. Conduct a Who, What, When, Where, Why, and How analysis for the following announcements and indicate whether the message will use a proactive or reactive format.

a. a new CEO for the company b. termination of a key employee c. the acquisition of another company d. entry into a foreign market

2. Explain why each of these organizations or departments would best be served by a chain, wheel, circle, or all-channel communication pattern. a. manufacturers of tin cans for food companies b. television news room anchor/editor and reporters c. insurance company claims of�ice and �ield claims adjusters d. accounting department preparing sales reports for three product divisions

3. Four methods of conveying messages to individual employees include tell, sell, consult, and joining. Explain which would be most useful in a performance appraisal meeting with an individual worker? Would your answer be different for a poor performer as opposed to a high performer? Defend your answer.

4. Explain appropriate and dysfunctional uses of the nonverbal forms of communication in the following settings. a. Teamsters unloading trucks b. Bank tellers serving customers c. College seniors or recent MBA graduates attending job fairs and on-site interviews d. An executive meeting with a new Japanese business partner for the �irst time

5. Explain the level of information richness in the following formal verbal communication channels. Provide speci�ic examples of what makes the channel richer or leaner.

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a. face-to-face b. telephone c. videoconference d. meeting e. presentation

6. As a manager, explain how you would cope with the following false rumors. a. Everyone assumes your pay is $10,000 per year higher than it really is, but the company insists on a closed pay system. b. The company plans to lay off 10 percent of the work force. c. Susan and Lisa have become lovers. d. The new CEO will be Juan Salas.

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3.7 Case Studies

Video Case Study: Handshake Dominance

Footage of British Prime Minister Tony Blair playing host to President Bush shows that even when friends and allies meet, subtle cues reveal who is dominant. A pat on the back is one way to demonstrate power. Getting the upper hand in a handshake is another.

1. How does the concept of handshake dominance or the upper hand apply to business situations?

2. How should a supervisor shake hands with a lower- ranking employee? Would it be the same with the supervisor and a higher-ranking manager?

Video Case Study: Nixon's Nonverbal Communication

Experts examine video footage from a questions and answer session with President Nixon where his nonverbal communication reveals that he is being defensive, anxious, and dishonest.

1. What type of body language may indicate deception? Anxiety?

Handshake Dominance From Title: Secrets of Body Language (https://fod.infobase.com/PortalPlaylists.aspx?

wID=100753&xtid=43109)

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Nixon's Nonverbal Communication From Title: Secrets of Body Language (https://fod.infobase.com/PortalPlaylists.aspx?

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11/19/2018 Print

https://content.ashford.edu/print/AUBUS600.12.2?sections=ch03,sec3.1,sec3.2,sec3.3,sec3.4,sec3.5,sec3.6,sec3.7&content=all&clientToken=f7b6… 27/28

2. As a manager, how can you use body language to display honesty and sincerity?

3. As a manager, should you try to read the body language of lower-ranking employees?

Case Study 1: "I have good news . . . and bad news."

Richard Oglethorpe faced one of the most dif�icult days in his working life. While he had saved his grandfather's company from bankruptcy, the rescue came at a high price. Richard's next task would be to inform the members of the �irm about the action he had taken.

Melton Oglethorpe founded Dixieland Metal Castings during the buildup to World War II. The nation was emerging from the Great Depression, and orders for fabricated metals had begun to rise. The onset of the war brought several major contracts to the company.

In the postwar era, Dixieland continued to thrive due to the many connections Melton Oglethorpe had made with industrialists. He also forged powerful connections with employees. Although the plant was in a heavily unionized part of Alabama, his workers resisted efforts to organize. They were being paid comparable wages to union factories, enjoyed generous bene�it packages, and were treated with respect by members of the management team.

When Melton stepped down in the late 1960s, his son Hugh took the reigns as CEO. The company continued its many positive human resource practices and developed new relationships with newly formed manufacturing companies. Hugh suffered a major heart attack in 1985, and Richard stepped in.

The next two decades became increasingly dif�icult because of the pressures from foreign competitors. Losing business and faced with higher labor costs, Dixieland began to struggle. By mid-2010, the handwriting was on the wall: The company could not compete without outsourcing at least some of its operations, and an infusion of cash was needed. Richard �inalized a deal with a well-respected �irm from India to keep the company a�loat.

The terms of the agreement were that about one-third of the work force was to be let go, replaced by international suppliers with much lower costs. The remaining workers would all retain their jobs, pay, and most of their bene�its. The one concession on bene�its was that each would now contribute a great portion of the cost of health insurance. In exchange, Richard developed a guarantee that each employee would be able to stay with the company until quitting or retiring. At that point, however, there was no assurance that a replacement from the Alabama plant or the United States would be hired.

Richard knew it was the best he could negotiate. He worried that the layoffs would lead to intense new efforts to unionize the plant. Worst of all, he recognized that many workers, whose parents had been with the company, would not see their sons or daughters have the chance to work for his grandfather's dream: Dixieland Metal Castings.

Review Questions

1. What channel of formal communication should Richard Oglethorpe use to inform the employees of this deal? 2. When Richard makes the announcement, should it be an informative or a persuasive presentation? Why? 3. Should Richard have face-to-face meetings with individual employees who are to be let go? With employees who will remain? How should

he prepare for those meetings? 4. What types of informal communication do you expect will circulate through Dixieland Metal Castings? What should managers do about

these rumors?

Case Study 2: Where the Truth Ends, Rumors Begin

Alicia Reed was stunned. At the end of what she thought was going to be a career-enhancing presentation to the CEO and top management team, a question from one of the members stopped her in her tracks. Alicia was one of three buyers for Simply Gorgeous, a high-end fashion store that catered to clients with extreme wealth. The retailer operated locations in Dallas, Texas; Miami, Florida; and Minneapolis, Minnesota.

A shopping experience at Simply Gorgeous involves being pampered by a team of sales personnel focused on taking care of every detail. Small treats are served with special teas and other drinks, as customers examine formal and cocktail dresses, and other fashions for major social events. Salespeople are expected to model out�its when asked.

Alicia's role included attending fashion shows in the world's design capitals, among them Paris, New York, and occasionally Los Angeles. She loved the travel and the excitement associated with the work. As a younger, African American woman, she was exploring territory that once seemed impossible to reach.

11/19/2018 Print

https://content.ashford.edu/print/AUBUS600.12.2?sections=ch03,sec3.1,sec3.2,sec3.3,sec3.4,sec3.5,sec3.6,sec3.7&content=all&clientToken=f7b6… 28/28

Alicia's second passion was reading. She could often be found after work at a local bookstore, examining new books and fashion magazines. In the bookstore, she had a brainstorm about her increasing frustration with the mainstream fashion design industry. She and others in the company believed the dresses were too outlandish and had become too expensive, even for wealthy patrons. The number of complaints about choices available at Simply Gorgeous had risen to an alarming rate.

After considerable investigation, Alicia concluded that there were a suf�icient number of "secondary" fashion shows, with talented designers representing a broad range of ethnic backgrounds, where new and exciting formalwear was available that would appeal to both the "old rich" and �irst-generation wealthy customers. She spent hours developing a presentation for a meeting with the top management team, complete with high-de�inition visuals, models wearing fashions, numbers, prices, statistics, and a pleasant musical background. Her goal was to expand the company's customer base while creating new purchasing options for ongoing clientele.

The critical moment occurred just 10 days prior to the presentation. While visiting her favorite bookstore, Alicia was greeted by a college friend, who also worked in the fashion design and purchase industry. The friend was accompanied by a third person, Marjorie Watson, who introduced herself as the chief merchandising of�icer for a major retail clothing chain. The three enjoyed an amicable conversation lasting about 45 minutes. At the end of the visit, Watson handed Alicia her business card, with the comment, "I know you have a great future ahead of you. If you're ever interested in moving to a larger company, please contact me." Alicia couldn't remember her exact response, but knew she responded by saying she was very happy with her current position. What she did not know was that two salespeople from Simply Gorgeous had witnessed the entire event from a distance of about 40 feet, close enough to see but not enough to hear clearly.

After carefully practicing her presentation for hours, the time arrived. It went �lawlessly, with all musical and visual cues arriving at the precise moments they were scheduled. At the end, Alicia asked the management team if they had any questions.

"I understand that you have been talking to another company about maybe moving on," said a stern manager. "Who would champion this idea if you are working for a competitor?"

"I don't understand. What are you talking about?" Alicia responded.

"It's all over the company," the manager replied.

Clearly, this was not the type of question she expected.

Review Questions

1. Were the actions of the two salespeople that saw the encounter between Alicia and Marjorie Watson ethical? What could they have done differently?

2. If Alicia's manager had heard this rumor, what should that manager have done in response? 3. How should Alicia respond to the management team? 4. Do you think her career has been harmed? If so, how, and what could she do to repair the damage?