Effective communication has time and again been underpinned as one of the most requisite ingredients for success in business (Guffey & Loewy, 2015). Research in the fortune 500 businesses targeting the executives reveals that among the skill most sought in those companies is the ability of the prospective employees to communicate correctly and concisely both orally and in writing. Furthermore, interpersonal skills are touted as being critical for upward mobility once employees secure a position in those companies (Jackson, 2014).
The reason why effective communication skills are highly sought after is due to the effect they have on potential and long-standing customers for the business. Simply put, the way a company communicates both internally and externally plays a major role in attracting and retaining customers (Dwyer, 2012). To demonstrate this aspect, the report focuses on two companies in Australia and how their communication strategy has impacted their productivity.
The first company considered is Visy Industries. The company has been voted the best performing private business in Australia on many occasions (Stensholt, 2017). Established in 1948, Visy has grown to be one of the largest businesses in Australia. It deals primarily with recycling of paper products. Additionally, it has a business interest in the packaging retail business (Visy, 2018).
Visy business reporting, employee involvement, and stakeholder management have impressed authorities to an extent that they are in the course of being approved for packaging and distribution of food. In 2017, the company posted over 12 billion AUD in sales compared to 5 billion in the year 2009. It has also expanded abroad, operating a franchise by the name Pratt Industries in the USA (Stensholt, 2017).
The second company considered is Retail Food Group Australia commonly referred to as ASX: RFG For the purposes of this report it is hereafter referred to as RFG. The company was established in 1989 but operated as a family business up until the year 2003 when it was incorporated as a public listed company trading shares at the Australian Security Exchange. As its name suggests, RFG has a business interest in retailing food and beverages. It operates in multiple locations within Australia under different strategic business units such as Donut King, Pizza Capers among others (Australian Financial Review [AFR], 2018).
While in the first case, the business is successful, the situation couldn’t be further from the truth with RFG. The company has suffered a loss to the tune of 306.7 million AUD and has liabilities in excess of 250 million AUD. What is more, RFG posted an enormous drop in share price from 5 AUD per share to almost 38 Australian cents in the year 2018. To complicate matters, it has attracted a lawsuit for false financial reporting, a case filed by its shareholders and enjoined by its lenders. It has also been accused of poor communication and disregard for its employees. This has seen an employee turnover led by the group CEO (Hatch, 2018).
1.1 Factors affecting the success of Verbal and Written Communication Skills at Visy
One reason why Visy has excelled in its communication skills is due to well-defined communication channels. The company has a Human Resource policy which clearly lays out the procedure for communicating with fellow employees, the management and external parties such as customers and the media (Genc, 2017).
New employees are inducted on effective communication using company emails, telephone etiquette and other internal communication strategies such as company memos, face to face communication and letters (Visy, 2018). The company inducts employees on the communication channel right from conception of ideas, to determining the medium to utilize, conferring the message, receiving the message, and finally giving feedback on the message (Markaki, Sakas & Chadjipantelis, 2013).
1.2 Open door policy
Rather than restrict its employees on bureaucracy when communicating, Visy has adopted an open door policy that encourages sharing of business ideas. This has led to collectivism within the company as opposed to individualism as encouraged by Hofstede’s cultural model. Visy also encourages its employees to come up with innovative ideas which are then shared across the company. The ideas are subjected to voting upon which the best are selected. Employees are allowed to present their ideas to their colleagues and the management which hones their verbal and interpersonal skills (Cronje, 2011).
1.3 Cultural Diversity
Visy recognizes its strengths in diversity. After all, the company operates in four regions namely, Australia, New Zealand, Thailand, and the United State of America. In certain areas such as Thailand, customers prefer their local dialect. Visy recognizes that it needs to maintain a balance in its long-term orientation in the areas it operates. In the USA, for instance, the society has a high degree index to the long-term orientation. Visy communication strategy in this region is adaptive and thought provocative. Retrospectively, in Thailand, it employs a low-degree index in its communication because the society values its tradition and language (Shi & Wang, 2011).
1.4 Clear objectives
Every employee at Visy has a clear job description. This is augmented with face-to-face communication with the line managers to whom the employees report. This defines their expectations while working within the company. The employees also write clear reports to the management which hone their analytical skills and help to identify areas that require improvement for the company to progress (Niemann, 2014).
1.5 Training and development
Visy has a program called Leaders for the future. The program encourages teamwork where employees appraise each other on different skills that they possess. Verbal and written communication skills are part and parcel of the skills appraised. The appraisal maps out the deficiencies of communication among other skills by the employees. Accordingly, the company arranges for training and development both within its premises or sponsors its employees for training in colleges and other Tertiary institutions (Murphy & Sashi, 2018).
1.6 Employee empowerment and motivation
Visy recognizes that fear prevents its employees from achieving their potential and creates a barrier to effective communication. The company thus encourages its employees to make decisions to a defined extent. The company also embraces a low-power-distance index where lower-ranking employees are allowed to communicate freely and challenge higher-ranking employees (Lundberg, Gudmanundson & Andersson, 2009).
1.7 Social Media
Georgescu & Popescul (2015) observe that even though social media is an informal communication strategy, the power it has cannot be underestimated. Visy, for Instance, uses social media on its website to answer existing clients and reach out to potential customers.
2.0 Causes of poor communication skills in RFG
2.1 Poor leadership
The management at RFG changes so often that they do not have time to acquaint with the staff (Hatch, 2018). For this reason, the management is unable to answer critical questions fielded by the employees or clarify business strategies because they never have enough time to internalize the business operations. This leaves employees frustrated and fearful. This translates to poor communication with customers thereby leading to spiraling loss of business (Markaki et al., 2013).
2.2 Demoralized employees
Due to the liabilities incurred by RFG, the employees are never paid in time. Sometimes, it takes months before the employees receive their salary. The negative news in the media about RFG also instills a cloud of fear among the employees. The company is also restructuring their operation which means that job redundancies will be occasioned at RFG sooner or later (AFR, 2018). Demoralized employees have a low Masculinity index in the Hofstede’s cultural model which equates to underachievement. Consequently, the staff cannot communicate effectively with their customers (Shi & Wang, 2011).
2.3 Fear of Uncertainty
The employees have an inherent fear of the unexpected at RFG. The uncertainty avoidance index is quite high at the organization. The management has responded by laying out stiff guidelines and procedure including restructuring and disposal of assets to offset company loans. This fear prevents effective communication among employees (Murphy & Sashi, 2018).
2.4 Lack of diversity
The company lacks cultural and gender diversity within its branches. Given that Australia is cosmopolitan with many people from different cultural backgrounds, the homogeneity of the employees means a lack of different ideas. This stifles communication with the different clients the company serves (Cronje, 2011).
2.5 Personal challenges among employees
The financial and emotional problems affecting the employees mean that they are distracted at work. For this reason, they are not able to communicate in the right way. Moreover, the employees lack focus and are not attentive to the clients. This results in poor service delivery (Jackson, 2014).
3.0 Recommendations for enhancing communication at RFG
The first recommendation is that RFG should motivate its employees. Motivation can take many forms as suggested by Herzberg’s two-factor theory. The company needs to remove job dissatisfiers such as unclear objectives and sort out management crisis (Lundberg et al., 2009).
The company also needs to embrace cultural diversity as encouraged by Hofstede’s cultural dimensions model. This will increase employee collectivism as opposed to individualism. It will also lead to lower power distance index where employees will embrace equality, spur fresh business ideas and improve communication with different clients (Cronje, 2011).
To improve verbal and writing skills, it is recommended that RFG trains its employees either internally or externally. The training can be both formal and informal to ensure that they become well rounded in terms of communication and interpersonal skills.
4.0 Conclusion
The report examines the factors affecting good communication skills in a business. It also investigates the factors leading to poor communication skills. The report inquires into the communication strategy of two companies, Visy which excels in the market and RFG which underperforms and reveals aspects which affect both companies in their communication. Finally, recommendations are proposed to improve RFG’s communication and ultimately its performance.
References
Australian Financial Review. (2018). Retail Food Group should work on its shareholder communications. Retrieved December 5, 2018, from https://www.afr.com/brand/chanticleer/retail-food-group-should-work-on-its-shareholder-communications-20180109-h0fq2q
Cronje, J. C. (2011). Using Hofstede’s cultural dimensions to interpret cross-cultural blended teaching and learning. Computers & Education, 56(3), 596–603.
Dwyer, J. (2012). Communication for Business and the Professions: Strategies and Skills (5th ed.). London: Pearson Higher Education.
Genc, R. (2017). The Importance of Communication in Sustainability & Sustainable Strategies. Procedia Manufacturing, 8, 511–516.
Georgescu, M., & Popescul, D. (2015). Social Media – The New Paradigm of Collaboration and Communication for Business Environment. Procedia Economics and Finance, 20 (2015), 277–282.
Guffey, M. E., & Loewy, D. (2015). Essentials of Business Communication. Boston: Cengage Learning.
Hatch, P. (2018). Retail Food Group boss departs after less than a year [The Sydney Morning Herald]. Retrieved December 5, 2018, from https://www.smh.com.au/business/companies/retail-food-group-boss-departs-after-less-than-a-year-20181203-p50jwr.html
Jackson, D. (2014). Business graduate performance in oral communication skills and strategies for improvement. The International Journal of Management Education, 12(1), 22–34.
Lundberg, C., Gudmundson, A., & Andersson, T. D. (2009). Herzberg’s Two-Factor Theory of work motivation tested empirically on seasonal workers in hospitality and tourism. Tourism Management, 30(6), 890–899.
Markaki, E. N., Sakas, D. P., & Chadjipantelis, T. (2013). Communication Management in Business. The Latent Power for Career Development. Procedia – Social and Behavioral Sciences, 73(2013), 319–326.
Murphy, M., & Sashi, C. M. (2018). Communication, interactivity, and satisfaction in B2B relationships. Industrial Marketing Management, 68, 1–12.
Niemann, I. (2014). An integrated communication implementation model for the post-2000 business environment. Public Relations Review, 40(2), 184–192.
Shi, X., & Wang, J. (2011). Interpreting the Hofstede Model and GLOBE Model: Which Way to Go for Cross-Cultural Research? International Journal of Business and Management, 6(5), 93–96.
Stensholt, J. (2017). Rich List 2017: Visy CEO Anthony Pratt says the “magic is in the supply chain” [Australian Financial Review]. Retrieved December 5, 2018, from https://www.afr.com/leadership/afr-lists/rich-list/rich-list-2017-visy-ceo-anthony-pratt-says-the-magic-is-in-the-supply-chain-20170418-gvmofr
Visy. (2018). Packaging technology innovation, insights, and consumer trends. Retrieved December 5, 2018, from https://www.visy.com.au/about/insights-and-innovation/
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