The Impact of Communication on the Success of an Organization

Index of contents:

1. Introduction

2. Definitions and theoretical approaches
2.1 Functions of communication policy

3. Communication and stakeholders

4. Role and management of communication

5. Internal communication
4.1 Baseline and challenges
4.2 The managers function
4.3 The employees function

6. Conclusion

7. Literature

1. Introduction

Over the past decades, developments in the frame conditions like the liberalization of the world trade, development of new economic regions and the revolution of communicative devices demand a high disposition for changes and developments from the organizations. From global crises, violence over waves of indignation and massive loss on authenticity - the environment of organizations is dramatically changing. The trust of the society in several institutions and organizations is decreasing. In contrast, displacements of power and economic turmoil in the world market are increasing. More and more, organizations are in trouble trying to adapt their performance to the constant economic growth and transformation.

As we all live in organizations and with organizations of all sorts, we know that an organization itself is based on communication. Therefore, all the different sorts of organizations and the human communication are inseparable interconnected. The relationships between the forms of organizations and communication processes are the scientific experimental field of communication in organizations.

To be successful in this global race, organizations must win the trust and authenticity of their stakeholders. This means, the organizations must represent how plausible their economic and social responsibility is and must constantly work on their positive reputation and appearance in both the public and the media sector. Eventually, those organizations who manage to win the best specialized staff and managers and constantly motivate their employees, resultant are the winners out of the excessive supply of competitors.

Therefore, organizations need a communication system which is, with a view to speed, reactivity, movement and learning ability, a humdinger. The competition for acknowledgement is hard, because more and more organizations know that the internal and external communication processes are the deciding factor of failure or success in the specific market.

Every organization taking part in this competition needs a communication system, promoting their performance and their social acceptance. Moreover, in case of their achievements, organizations must be seen as nonreversible and indispensable from their customers, politicians or investors. Image, reputation and brand development are more and more influencing the organizational success. Are the communication systems of the organizations armed for these requirements?

2. Definitions and theoretical approaches

We live in organizations and with organizations of all sorts. The organization itself is based on communication. Therefore, all the different sorts of organizations and the human communication are inseparable interconnected. The relationships between the forms of organizations and communication processes are the scientific experimental field of communication in organizations. Talking about organizations as a company, the term corporate communication is used.¹

The term communication itself means the transmission of information and important content with the purpose to regulate opinions, placements, expectations and behavior patterns of addressees corresponding specific goals.

Moreover, communication can be both personal and impersonal, one-sided and two-sided. Additionally, there can be differentiated between physical communication and communication by word, lettering/script, picture or audio.

Furthermore, communication policy is defined as the entirety of communication tools and measures, which are used to represent a company or organization and its performance to the relevant target group and/or to interact with the stakeholders of a company or organization. The communication policy comprises the measures of the market directed external communication like for example advertisement. Moreover, it comprises the internal communication, for example: the intranet or a personnel magazine. In addition, the communication policy comprises the interactive communication between staff and customers, for example: customer service of financial service providers.

2.1 Functions of communication policy:

The communication policy can be subdivided into two categories: the microeconomic function and the macroeconomic function. The microeconomic function comprises three sub- categories: information, influence and acknowledgment. The macroeconomic function also comprises two other sub-categories: a competition directed and a social-corporate function.

Organizational communication and marketing communication cover the entirety of all communication tools and measures of one organization or company, applied to represent the company, products and performance to the relevant stakeholders.²

Furthermore, organizations are observable networks of projected interaction between specific individuals, happening regularly and systematic. Organizations have an agenda, measuring the success of their communication. In addition, organizations consist of members, for example staff or manager, who know exactly about the organizational networks. Even strangers like customers or citizens notice the organization and this not only happens via their name or their building. More likely, they experience the organizational advertisement, their public relations and their representatives.

Moreover, organizations have an identity, a value and are building their own culture. This means, the organizations define how they see themselves, which goals, norms and rules they follow, and which behavior patterns are expected and practiced.

All these different characteristics of organizations built in long decision-making processes, are the result of communication processes and have an impact on the future communication models.

The communication process not only builds the basis for an organization, but also for decision- making and management processes. With intensive work and analysis in practice, the following key concepts are used for the organizational communication:

1. Goals: What does the company want to achieve? The goals of an organization can easily be expressed with an overlook on the course of business. These goals are worthwhile perspectives for the organization in form of visions, overall concepts and strategies.
2. Members & strangers: the borders between internal and external individuals and groups engaged to the organization merge. There are people related to the organization in the term of collective agreement and there are also people related to the organization with an external view and relation.
3. Stakeholders: For both above mentioned groups, the definition stakeholder was established. Stakeholders are groups or individuals, having an interest or concern about the organization.
4. Identity: An organization shouldn't be operating without considering the wishes and expectations of stakeholders.
5. Value: Values are the conception or view which one individuum, group or organization considers to be worthwhile.
6. Culture: The culture of an organization, company or society is based on the values they set. Culture has a direct impact on the behavior of its members.³

Corporate communication corresponds to the function of organizations to maintain and take care of efficient communication relationships. For the effective coordination of the internal and external communication, corporate communication is a management function that offers a framework with the overall purpose of establishing and maintaining favorable reputations with stakeholder groups upon which the organization is dependent.⁴

3. Communication and stakeholders:

Corporate activities are not only restricted to the interaction with the customer itself but mean the active interaction with all different stakeholder groups. These stakeholder groups are defined by their direct or indirect reference to the corporate activities. This kind of relationship can be categorized by the institutional frame in which both the organization and stakeholder are integrated.⁵

There is a necessarily specific number of involved and affected groups for each company. Relevant for the goal of a specific company is the behavior and acting of the specific stakeholder groups and with good cause a considerable parameter. All the stakeholder groups related to a company are both direct and indirect connected in correlation to a company. In every factor or parameter the behavior and acting of stakeholders is influenceable, it represents a controllable and developable variable as object to the management. Stakeholder provide resources to the company whereby they have a direct impact on the success of the specific company. In contrast, the specific behavior of a company has a direct impact on the well-being of their stakeholders. Consequently, the behavior of stakeholder groups has an economic value for the Company. This value can be defined as stakeholder value. Likewise, the behavior of the company has a value for the stakeholders, too. It can be defined as the organizations benefit. As a result, the organizations benefit is created by the stakeholders and the relationships between stakeholder and organization. Similarly, the value of the stakeholder groups is created. To shape the relationships for both stakeholder groups and organization beneficial and valuable is a critical condition for the organizational success.

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Figure 1: Effective communication - the seven c's of communication

4. Role and management of communication

In the entrepreneurial added value, communication is of integral importance. Concluding, communication has three roles:

In the first place, the implementation of products in the perception of customers is caused by communication processes. Secondly, the stakeholders value and interests are internalized in the performance of the specific organization as a result of internal and external dialogues. In this manner, a profitable integration of the organization into the enclosed society is developing. Thirdly, the implementation of an organization in the perceptual world of the stakeholders occurs by the arrangement of communicational experiences within the meaning of the organizational goals. Defined by these three roles, communication is an indispensable part of the adding value of an organization.

As important determining factors of behavior patterns of stakeholders, the image and reputation of an organization possess an economic value. The sum of all stakeholder images can also be defined as the stakeholder capital of an organization.⁶

5. Internal communication

As already mentioned in 1. “Definitions and theoretical approaches”, employee communication comprises al communicative and informative procedures between the members of an organization or a company. As integrative part of the holistic communication management, it is success-orientated and purposeful.

In the past decades, the importance of employee communication has increased. The communication processes are an essential component of the personnel management. Leadership and communication style function as two sides of the same coin are consequently deciding on the success or failure of leadership procedures and as a result, the organizational success.⁷

5.1 Baseline and challenges

Changes in frame conditions like the liberalization of the world trade, development of new economic regions and the revolution of communicative devices demand a high disposition for changes and developments from the organizations. The organizations must face these challenges to maintain their competitive ability in the increasing trade rivalry to consequently protect and secure their own survival. Facing this developments and changes, fast and flexible corporate policy is essential.

To gear the different operations within an organization towards a shared aim, a massive information and communicational effort must be done. Consequently, communication policy without internal communication is unimaginable.

The addressees of the internal communication and information are the employees themselves, whose key role is the identification and engagement in their organization. This is essential for the success of the organizational growth and development as well as the market position of the organization.

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¹ Mast, Claudia (2019): Unternehmenskommunikation. 7. Aufl. München: UVK Verlag.

² Bruhn, Manfred (2011): Unternehmens- und Marketingkommunikation. Handbuch für ein integriertes Kommunikationsmanagement. 2. Aufl. München: Verlag Vahlen

³ Putnam, Linda L.; Pacanowsky, Michael E. (1983): Communication and organizations. An interpretive approach. Californien: SAGE Publications, Inc.

⁴ Mast, Claudia (2019): Unternehmenskommunikation. 7. Aufl. München: UVK Verlag.

⁵ Schmid, Beat F.; Lyczek, Boris (Hrsg.) (2006): Unternehmenskommunikation. Kommunikationsmanagement aus Sicht der Unternehmensführung. 1. Aufl. Wiesbaden: Gabler Verlag

⁶ Schmid, Beat F.; Lyczek, Boris (Hrsg.) (2006): Unternehmenskommunikation. Kommunikationsmanagement aus Sicht der Unternehmensführung. 1. Aufl. Wiesbaden: Gabler Verlag

⁷ Bruhn, Manfred (2011): Unternehmens- und Marketingkommunikation. Handbuch für ein integriertes Kommunikationsmanagement. 2. Aufl. München: Verlag Vahlen