Communication in Business: HSBC - Case Study Example

Communication in business --HSBC The success of organizations in the global market is highly depended on their ability to communicate effectively with their stakeholders. The term communication in the above case has many different aspects. Most commonly, communication is a tool used for achieving business aims. HSBC, a major competitor in the global banking industry, has used its website in order to communicate effectively with its customers. The firm’s advertisement regarding to its home loans has been structured in such way so that emphasis is given ‘on the reader and not on the message’ (Debasish and Das, 2009, p.9). As a result, the advertisement is used ‘not just to inform the readers on the characteristics of the firm’s loans but also to persuade the readers that these loans are the most convenient in the market’ (Debasish and Das, 2009, p.9). At the level of community, communication is used for improving the relationship between the firm and the society. The forms and the role of communication in HSBC are reviewed in this paper. Reference is made to the positive and the negative aspects of communication as developed between the firm and its stakeholders. The terms under which communication in HSBC would become more effectively are examined and evaluated. Communication in HSBC is developed through a process, which is similar to the linear model of communication, as presented below: Sender Message Media Message Receiver Action Figure 1 – Linear Model of Communication (source: Chaturvedi 2004, p.22) This means that message is sent to the firm’s customers through the media or the Internet; after receiving the message, the customer is expected to take decisions in regard to the firm’s products. From a first view, the Communication (linear) model used in HSBC, as presented above, is quite simple, focusing on the transmission of the message to the customer. However, if it is reviewed more carefully the above model reveals the emphasis of the firm on persuading the customer to take specific decisions, a trend which is in accordance with the view of Chaturvedi (2004) that the linear model of communication promotes the manipulation of receivers by the senders. In terms of its borders, communication in HSBC can be characterized as quite extensive, a fact that can be considered as justified since the firm operates in 79 countries internationally (Barnard 2005). As noted in the study of Barnard (2005), the expansion of HSBC in the global market is based on a network of advanced technology, which allows the rapid growth of the firm’s e-commerce capabilities. Communication in HSBC is mostly based on the organization’s website; this is the reason that specific features have been developed aiming to secure customer loyalty, to distinguish the firm from its competitors (for example: the red/ white background and fonts in the organization’s website) and to attract new customers (with the continuous update of the website’s features and technology). As of quality, communication in HSBC can be considered as quite effective, even if, under certain terms, failures appear. An example of the effectiveness of the firm’s communication processes is the following one: in 2002, after ‘acquiring the Mexican bank Bital’ (Moore and Sonsino, 2003, p.93), the firm’s managers had to develop a successful communication plan on which the cooperation between the firm’s employees and those of Bital would be based. The communication plan produced was based on four different areas, addressing the emergent messages, the messages to Bital’s employees, the messages that would be updated periodically and the messages that would be of secondary importance (Moore and Sonsino 2003, p.93). In other words, in the case of Bital, managers of HSBC have developed a unique communication plan, taking into consideration the characteristics and the needs of both companies. They didn’t use the firm’s existing communication plan, a practice that is normally used for communicating with the employees of the firms acquired by HSBC. According to Cornelissen (2011), each firm acquired by HSBC has to adopt the corporate brand and the corporate values, which emphasize on the need of each organizational unit to be: ‘perceptive, progressive, responsive, respectful and fair’ (Cornelissen 2011, p.119). It is implied that these values constitute the basis of communication between the firm and its stakeholders worldwide. Thus, communication in HSBC is expected to be of high quality. Still, the positive and negative aspects of the organization’s communication framework should be described so that the prospects of communication to support the long term of the organization to be identified. The positive aspects of the firm’s communication plan would be analyzed as follows: HSBC emphasizes on the volume and the quality of information provided to its stakeholders, meaning that the firm tries to publish analytical information in regard to all its activities so that its stakeholders to have a clear view of the organization’s policies and performance. According to Foster (2008) the firm’s report for the year 2006-2007 reached the 454, an extremely high number of pages compared to other firms’ reports (Foster 2008, p.216); the employees in Royal Mail had to develop a plan in order to manage the copies of the report which had to be distributed to the firm’s shareholders, and to certain of its stakeholders (Foster 2008, p.216). Another positive aspect of the firm’s communication framework is its flexibility, responding to different market conditions. For example, the corporate website is continuously monitored and updated, so that the communication between the firm and its customers is kept at high levels (HSBC, About us 2012). The firm’s decision to establish a system that enhances the firm’s online presence is another indication of the firm’s efforts to support its communication with its stakeholders. Reference is made specifically to the Nortel Unified Communications Solution, which was implemented in 2008 and aimed to improve the communication between the firm and its customers (Nortel 2008), a target that was achieved, as proved by the firm’s current performance. In addition, innovative practices are periodically developed aiming to keep the customers’ attention to the firm’s initiatives. An indicative example of such practice is the scheme for paperless communication that the firm recently adopted (HSBC, Paperless communications 2012). Another important element of the firm’s communication process is the promotion of communication between the firm and its employees; in HSBC employees are considered as valuable members of the organization’s team, not just supporters of the organizational plans (HSBC, Communicating with employees 2012). Also, culture has been a key part of the organization’s plans. Culture in the organization’s environment can highly affect the organizational performance since it influences the responses of customers to the firm’s services (Tench and Yeomans 2009). Respecting the culture of communities in the areas where it operates, allows the organization to communicate more effectively with its stakeholders. In 2003, the firm opened a branch in Manchester for supporting the local Chinese community, which is estimated to 30,000 people (Butt 2003). Furthermore, as many firms worldwide, HSBC supports the protection of climate, and participate to a high range of initiatives developed in the particular field (HSBC Climate Partnership 2011). In September 2011, the firm was ranked among the 50 safest banks worldwide (Hyde, September 9, 2011), a fact that verifies the effectiveness of communication in HSBC. Communication in HSBC has also certain negative aspects. For example, in 4 November 2011, a crash occurred in two of the firm’s systems in UK (Hyde 2011). The problems caused to thousands of the firm’s customers across the country were significant, since for many hours no customer was able to take cash from his account, to use a debit card or to make online transactions (Hyde 2011). The above event, negatively affected the firm’s relationship with its customers. Later in 2011, in December, FSA fined the firm with a fine of £10.5million because of the firm’s practice to mislead elderly in regard to its products, a practice that was regarded as unethical (FSA 2011). In February 2012, the Law Society in UK published a report aiming to highlight the negative role of the firm’s mortgage system in the local house sales (Law Society 2012). The Law Society of Scotland published a similar report in March of 2012 emphasizing on the failures of the firm’s documentation (Law Society of Scotland 2012). In this context, important concerns have been developed in regard to the reliability of the firm’s arrangements with its customers (Thomas 2012). Summarizing the issues discussed above, the following conclusions can be produced: HSBC highly supports communication with its stakeholders. In fact, important schemes have been established for ensuring that the firm’s stakeholders have access to key organizational data. Also, the organization’s systems are continuously updated so that advanced technology is available to the firm’s customers. Of course, the negative aspects of communication in HSBC, as presented above, cannot be ignored. However, the size of the organization and the complexity of its activities should be taken into consideration for judging its ability to communicate with its stakeholders. In any case, the positive aspects of the firm’s communication framework are much more than the negative ones leading to the assumption that the performance of the firm in terms of communication could be characterized as quite satisfactory; potential improvements in this framework would result to the further enhancement of the firm’s communication capabilities. References Barnard, Malcolm. Graphic design as communication. London: Routledge, 2005. BBC News, “Law Society says HSBC mortgage system threatens house sales,” BBC News, February 10, 2012, accessed March 21, 2012 http://www.bbc.co.uk/news/uk-scotland-scotland-business-16982489 Butt, R., “HSBC opens Chinese community branch. Business Week” Manchester Evening News. February 27, 2003, accessed March 21, 2012 http://menmedia.co.uk/manchestereveningnews/news/business/s/52/52685_hsbc_opens_chinese_community_branch.html Chaturvedi, Mukesh. Business Communication: Concepts, Cases And Applications. 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