Business Communication

Unit 10

Unit 10 Internal Business Communication Electronic Media and Shareholder Communication

Structure: 10.1 10.2 10.3 10.4 10.5 10.6 10.7 Introduction Objectives What is an Intranet? Communicating through Email Communication with Shareholders Summary Terminal Questions Answers

10.1 Introduction
In the previous unit, we discussed communication with employees through written channels, including memos, circulars and notices. Today, the advent of computers and the internet has enabled much quicker communication with employees and speedier decision making. Even small companies have access to email and the intranet, which have made memos, circulars and notices almost outdated. In this unit, these two electronic media for internal business communication will be discussed, including their advantages and disadvantages and the principles of communication. Apart from employees, shareholders are also important internal stakeholders, as mentioned in one of the earlier units. Part of this unit will focus on the reasons for communication with shareholders and the media used to communicate with them Objectives After studying this unit, you will be able to Explain the meaning and purpose of an intranet List out the advantages and problems in using an intranet Use email more effectively Describe the principles of electronic communication Recognize why shareholders are important stakeholders
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10.2 What is an Intranet?

An intranet is similar to a website, except that it is an internal network that is exclusive to a particular organization. This means that only employees of the organization will have access to it. This is as opposed to an extranet, which is also an internal or private website, but where access privileges are also extended to external stakeholders of the company, such as customers, suppliers, partners and others. Although the intranet is better suited for large organizations where distributing information is an enormous task, a number of smaller companies today are also using this form of internal communication. Simply defined, the intranet is a tool for distributing and sharing information of different types within the company. For example, weekly reports, goals, human resources related information such as employee benefits and declared holidays, interactive forms, vacation requests, supply orders, company policies and even memos and notices can be posted on the intranet. Apart from large organizations, the intranet is particularly suited for virtual companies that have only an online presence, as well as companies with frequently traveling employees and off-site workers, since communicating with such employees becomes a challenge. 10.2.1 Advantages and Disadvantages of Intranet Like any other tool, the intranet has its advantages and limitations. Some of the primary advantages are Discourages grapevine Grapevine, or the informal communication network was discussed in one of the earlier units. Although grapevine can be useful, it also leads to rumors, in the absence of information passed on through the formal communication network. When employees are misinformed, they become dissatisfied and de-motivated. Using the intranet as an official channel to post information for all employees to see discourages gossip and avoids creating a transparency gap. Facilitates pre-meeting discussion The intranet may be used to discuss and debate ideas prior to a meeting, so that valuable meeting time is spent focusing only on relevant ideas.

Example Suppose a sales team of five members are required to make a presentation to the Vice President Sales, on how to increase sales during
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the current year. Instead of each salesperson making a lengthy presentation during a meeting and then getting his ideas reviewed and approved, a discussion board can be created using the intranet, a few days before the meeting. The salespersons could post their ideas on the discussion board for the VP to review in advance, so that only the most promising ideas are discussed during the meeting. This way, the salespersons can come into the meeting more focused. Saves time The intranet is paperless communication and is therefore a big time saver. A lot of unnecessary time wasted on filling out forms, leave requests, supply orders, etc., can be saved by doing this through the intranet. Employees can get information on official holidays and other HR related information, without having to interact with the HR manager. Is superior to email Sending some types of information through email can sometimes create confusion and information overload. Let us take the above example of the sales team making a presentation on how to increase sales. If five salespersons each have three different ways in which they could increase sales and start emailing multiple versions of their Power Point presentations for the VP to review, it could lead to disastrous results. Instead, they could work on a shared file, by using the intranet. A central location could be created for the most recent file.

While the intranet saves valuable time and money, it is not without its down side. Before an intranet can be set up, a lot of groundwork needs to be done. You need to determine what you want it to do and how employees will use it. Some of the disadvantages are Getting started Building an intranet to your specifications can be expensive. A consultant may have to be hired to give it the desired look and feel and to make sure that it is user friendly and simple enough for all employees to use. Developing and maintaining content Once it has been set up, someone has to be responsible for maintaining and updating the information on a continuous basis. In small organizations, it may be sufficient to appoint one person to do this. In larger organizations with multiple departments, it may be necessary to appoint several persons to maintain and update information for the different departments.
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This becomes a complex and expensive task. Training employees Once it has been set up, employees have to be familiarized and trained on how to use the intranet. This involves investment in time and money. Convincing old economy employees Some employees may not be technology or computer savvy and may be reluctant to use the intranet to access information. Therefore, they may have to be convinced about the benefits of using the new technology.

The case study given below will illustrate how an intranet should be designed and used as an effective communication tool THE RAND LIBRARY INTRANET The Rand Library is part of a non-profit research institution based in Santa Monica, California, USA, that is involved in helping to improve policy and decision making of federal, state and local governments through research and analysis. The RAND library intranet has been designed with the objective of being an interactive tool that helps library staff and clients communicate regularly with each other. Another objective is to constantly update the information available to its customers. This does not require an IT specialist and can be done by any library staff member. Their intranet communication strategy includes three components an updated home page, an email alert service and several email links. The home page contains the library logo and a menu, which are standard components, while the body of the page is changed at least once a week. The home page includes internet sites that may be of value to their research staff, as well as announcements regarding library news, new services and policy changes. The email alert service includes email distribution lists for topics such as Health Care, Science and Technology. Once someone has signed up for the email alert service for one of these topics, they receive regular email pertaining to these topics. Multiple email links are used to make the communication two way. This means that the clients can come to the intranet site and make requests for books, research articles and so on. They can also click on a Contact a Librarian link that brings up the name, job title and photograph of each of the reference librarians.
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Self Assessment Question Are the following statements true or false? 1. The intranet is part of an informal communication network. 2. The intranet can be customized to meet the needs of smaller companies. 3. The intranet encourages grapevine. 4. The intranet can make meetings more focused. 5. The intranet involves high investment in maintenance and training.

10.3 Communicating through e-mail

Although e-mail is a tool for external communication, it is also regularly used within an organization, in place of telephone and face-to-face contact. This is because e-mail is instantaneous and allows you to send messages that others can pick up at their convenience. Besides, e-mail also makes it possible to send messages to people anywhere in the world and to people who are otherwise impossible to reach. While the other forms of written communication are highly formal in nature, e-mail is more informal and spontaneous. It is therefore easier to write an email message than it is to write a business letter or a report, where greater attention has to be paid to the language, style and tone. Since e-mail is quick, easy to use and spontaneous, it can also help to improve personal relationships in the workplace. 10.3.1 Principles of e-mail Communication The principles of communicating through e-mail are a little different from the principles of written communication, since e-mail is more informal in nature. We shall discuss these in some detail * Watch the content E-mail messages are not always confidential and one can never be sure who will read them. The minute an e-mail message is sent, multiple copies are created on your own PC and server and on the recipients PC and server. There is no way of ensuring that the message will not be forwarded to others. Sometimes, e-mail messages can even be used as proof in court. Once a message is sent, a permanent record is created. Therefore, it is always wise to avoid writing anything negative or offensive.

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It is particularly important to watch the content of official e-mail messages sent using an employers equipment. Since the employer has a right to read the message and is legally responsible for its content, it must be carefully worded. * Pay attention to the tone The very nature of e-mail communication can make the message sound negative, abrupt and rude. For one thing, e-mail lacks the personal quality of face-to-face communication, where body language and other non-verbal cues may be used to make the communication more positive. Secondly, e-mail messages have to be brief, using short words, sentences and lack of salutations. Brief messages may be interpreted as being rude and unfriendly. Therefore, you must pay close attention to the tone of the message and ensure that you sound friendly and courteous. Avoid using humor and sarcasm which might be misunderstood, or sending messages when you are angry or annoyed. * Include a specific subject line Your e-mail message should always include a subject line that clearly mentions the topic of the e-mail. Since business executives receive several e-mails a day, this would help them to decide which messages are most important to them. They will also have an idea of what the message contains. * Place important information first Since business executives do not have time to read lengthy e-mail messages, it is a good idea to put all the important information that you want to convey in the first three lines of the message. Whether you are seeking a clarification, making a request, or giving instructions, it is best to mention this right at the outset, so that it is noticed. * Explain attachments in the body of the e-mail Attachments take time to download and should be sent along with an explanation in the body of the e-mail, as to what they are all about. This will make it easier for the recipient of the message to decide whether they should be opened or not. Otherwise it will lead to unnecessary waste of time. * Use the to and cc button carefully The to box should be used only to send messages to people who are responsible for doing something. The cc button is used when sending multiple copies of the same e-mail message to other recipients, who need to be kept informed on a specific
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issue. This should be used with care, making sure that the message is sent only to the right persons. It is important to respect privacy, since not everyone likes having their e-mail address displayed to others. Besides, sending a long list of e-mail addresses can interfere with the reading of the main message. * Pay attention to brevity, emphasis and white space The look, appearance and language used in the e-mail message can influence the readability of the message. Some techniques for enhancing readability of email messages include short paragraphs ( six lines maximum), spacing between paragraphs, use of bullet points and numbers for lists, use of paragraph captions, highlighting main points in bold type and use of white space. * Use the WIFM rule WIFM stands for Whats In It For Me? and means that the benefits of your message to the reader should be emphasized. This involves use of the second person pronoun, you, rather than the first person pronouns I or me. Stressing on the you attitude rather than the me attitude was discussed in an earlier unit. * Tidy up your mail box E-mail traffic can lead to your inbox becoming cluttered, with more messages than you can handle. It then becomes difficult to retrieve important messages when you need them. It is therefore a good idea to clean up your mailbox regularly, by deleting unimportant messages. The important messages that you want to refer to later should be put into separate topic folders. Every now and then, any outdated messages in the topic folders should also be deleted. * Proofread your e-mail message Just as it is important to proofread business reports, letters and memos, e-mail messages should also be checked for spelling and grammar mistakes, so as to avoid any embarrassment. * Set aside time to check e-mail E-mail should not become a substitute for face-to-face interaction at the workplace, or cut into valuable time spent on other important jobs. It is a good idea to determine a time during the work day when you check and respond to e-mail messages.

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10.3.2 E-mail Etiquette Similar to meeting etiquette which we discussed in an earlier unit, there is an etiquette for writing e-mail messages, which should be strictly followed 1. Mind your Ps and Qs These refer to the three magic words, Please, Thank You and Sorry. They are all the more important in email messages, which have to be extra polite and friendly. 2. Avoid shouting Shouting in an e-mail message refers to use of all capital letters in the text. All caps make it difficult to read a message and are therefore considered to be rude, like shouting. 3. Avoid symbols and acronyms Symbolic messages using punctuation marks, known as emoticons ( for example, : ) for a smiley face!) should be avoided, especially in business related e-mail messages. Similarly, abbreviations such as BTW ( by the way) should be avoided since they sound over casual and may not be understood by everyone. 4. Use friendly salutations and sign-offs Although these are not strictly required in e-mail communication as in business letters, a salutation such as Dear John and a sign-off such as Warm Regards, helps to make the tone friendly and personal. 5. Respond promptly In the case of business related e-mails, it is important to respond promptly, especially when communicating with superiors. Even if you are hard pressed for time, are out of town or out of the office, you can set an automatic e-mail response to your received messages, which will mention that you will be responding in detail on a specific date. 6. Avoid personal messages at work Do not make use of the office facility to send personal e-mail messages. Since confidentiality of the message is not guaranteed, it may lead to embarrassment later. 7. Avoid sending junk mail Do not send irrelevant messages or messages that are not work related, to people at work. If you overload people with this kind of mail, they will not pay attention to the really important messages.

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E-mail should be used constructively and judiciously, to meet your goals at the workplace and to enhance your performance on the job. Here are a few career tips that can help you to take advantage of e-mail SOME DOS OF E-MAIL Use e-mail when1. You wish to be a part of a network where you can share information and receive information from others. 2. You want to contact important people quickly and save time spent in meetings. 3. You want to send information to a large number of people located across the globe. 4. You want to establish a professional image Your language and writing style on electronic media can say a lot about you, just like your dress and outward appearance. Watch your spelling, grammar and usage of English. 5. You want to cut through hierarchy and speed up team projects. Activity List three different situations at the workplace when e-mail communication would be more appropriate for conveying a message, compared to oral and written channels, explaining why.

Self Assessment Question 6. Match the following i) WIFM principle ii) Ps and Qs iii) Shouting iv) Readability v) FYI a. Acronym b. Reader benefits c. Bullet points and white space d. All capital letters e. Etiquette

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10.4 Communication with Shareholders

Shareholders are important internal stakeholders of an organization, since they are the owners of the company. Since the capital required is huge, there are no proprietors and partners any more. As organizations grow, shareholding is widely scattered. Therefore, it is essential to retain the shareholders confidence in the companys management, through effective communication with them on a regular basis. There are two situations when shareholder communication is extremely vital 1. If a company is doing well and wants to expand its scope of operations, or diversify into unrelated areas. In this case, good shareholder relations can help to raise the required capital and minimize borrowing from banks and financial institutions.

2. If a company is going through a crisis or difficult times, more communication with shareholders is needed. Take the example of Coke and Pepsi during the pesticide controversy. In such a situation, the company should be open with its shareholders and explain the problem clearly, including the steps being taken to overcome the crisis. Crisis communication is an important, but often overlooked area of shareholder communication. Lack of communication during a crisis encourages the grapevine among shareholders and leads to false rumors. For example, rumors may spread that the company is going to close down. On the other hand, if you tell the truth, chances are that your shareholders will stand by you. The appropriate media for communication with shareholders include both oral and written channels. Periodic mailers should be sent to all shareholders, giving a fair and truthful representation of the companys results and progress on various fronts. In areas where there is an aggregation or concentration of shareholders, shareholder meetings and conferences should be held, making presentations on the companys progress. When the company is going through a crisis, shareholders should be taken on project site and factory visits, to show them the measures that are being taken to solve the problem. The overall guiding factor in communicating with shareholders should be that they are the owners of the company.
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Two examples are given below of two companies, Cognizant and Reliance, that are well known for effective shareholder communication. COGNIZANTS COMMUNICATION WITH SHAREHOLDERS Cognizant is a leading provider of IT services, based in New Jersey, USA. They have won national acclaim in the US financial media for being one of the most shareholder friendly companies in the US. In a survey where respondents were asked to rate various companies on criteria such as financial performance, communication with shareholders, investor relations and quality of corporate governance, Cognizant was ranked the highest. Shareholder friendly companies were described by respondents as those that are known for their policy of openness and high quality of communication with their shareholders.

RELIANCES COMMUNICATION WITH SHAREHOLDERS In India, one out of every four investors is a shareholder of Reliance. The company has set up a firm of Chartered Accountants as Internal Security Auditors, to audit the transactions and communication with shareholders. The Board of Directors of the company has also appointed a Shareholders/Investors Grievance Committee, for examining and responding to shareholders complaints with regard to transfer of shares, non-receipt of balance sheet, declared dividends, etc. The Committee also makes recommendations on how to improve the overall quality of investor services.

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Self Assessment Question Fill in the blanks 7. _________________ and _________________ channels are used to communicate with shareholders. 8. Project site and factory visits are part of _____________ communication with shareholders. 9. Effective communication with shareholders means being ____________ with them.

10.5 Summary
This unit dealt with two more aspects of internal business communication communication through electronic media and shareholder communication. The electronic media include the intranet and e-mail, which is part of the intranet. The intranet is a website exclusive to the company, which permits employees within an organization to exchange information in digital form. It is ideally suited for large organizations, organizations that have a purely online presence, traveling employees and off-site workers. All types of information, including reports, company goals, policies and HR related announcements may be posted on the intranet. The primary advantages of the intranet are Facilitates discussion of preliminary ideas, prior to meetings Enables constant flow of information through an official network and discourages rumors Saves time and paper Is better than email, when multiple versions of a document have to be sent

Some of the disadvantages of the intranet are Is expensive to get started Needs to be maintained and continuously updated Requires investing in employee training and convincing old economy employees to use it
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When communicating through e-mail, the following guidelines should be kept in mind Avoid saying anything negative or confidential Make the tone friendly Include a specific subject line State important information first Describe the attachments Pay attention to use of toand cc Make the email brief and easy to read Stress reader benefits Keep your mailbox tidy Allot time for checking and answering email Email etiquette involves the following Remember to be polite Avoid shouting Avoid use of symbols and acronyms Include friendly salutations and sign-offs Respond promptly Respect privacy

Shareholder communication is important, since they are the virtual owners of the company. It is important to communicate openly with them, both in good times and bad. Good relations with shareholders can help to raise capital for new projects and to retain their confidence, even when the company is going through a crisis. The media used to communicate with shareholders include mailers, meetings, conferences and site/factory visits.

10.6 Terminal Questions

1. Talk to a business executive in a company and sector of your choice, to find out how the intranet is being used to communicate internally. What type of information is exchanged through the intranet? 2. As a salesperson, write an e-mail message to your Sales Manager, requesting that a meeting be scheduled to present your ideas on how to improve sales for the coming year.
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3. Go through business magazines and daily newspapers and select a situation when a company was facing a crisis (e.g., Coke and Pepsi pesticide controversy). How did the company communicate with its shareholders and other stakeholders to overcome the crisis? Was the communication effective?

10.7 Answers
Answers to Self Assessment Questions 1. F 2. T 3. F 4. T 5. T 6. i) b, ii) e, iii)d, iv) c, v) a 7. Oral; written 8. crisis 9. open/truthful Answers to Terminal Questions 1. Refer 10.2, 10.2.1 2. Refer 10.3,10.3.1, 10.3.2 3. Refer 10.4

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