The Role of Communication in the Organizational - Essay Example

?TESCO: Reflective Communication Audit Section Introduction The scope and role of communication in the organizational context has undergone changesin the recent times consequent upon developments in technology, telecommunications, internet and social networks. The increased awareness among the public calls for formulation of effective communication strategies for a sustainable growth and development. Coffman, J. (2004, p. 1) states “A strategic communications audit is a systematic assessment, either formal or informal, of an organization’s capacity for, or performance of, essential communications practices. It determines what is working well, what is not, and what might work better if adjustments are made”. An organization communicates with its stakeholders and public in variety of situations. The strategy of the company in respect of all manners of communication, oral, written or actions needs to be designed to convey its philosophy and values to the stakeholders and public. The purpose of this study is to reflect upon and analyse the communication practices, processes and issues that are evident in TESCO, which is the third largest retail chain in the worth with its head quarters in the UK. Organisational background Started as grocery retail in the UK, TESCO has transformed into a multinational company over the period of time, with retailing in clothing, furniture, electronic goods and many other goods including petrol which are regularly bought by households or businesses. It has also entered into financial services, software and telecom. The company is listed in LSE and included in FTSE 100 Index. Therefore, communication in such a geographically and functionally diversified company needs to be structured to achieve the objectives or goals with limited misunderstanding and conflicts. The slogan “The Tesco Way” seeks to portray the manner in which the company wants the public to remember its philosophy and values, and in a sense, it is a message to the public. The company’s innovations like installation of camera and self-service tills in the stores could be considered as reactions in tune with the technological developments. Also, these changes communicate a message to the customers about TESCO’s desire to improve the level of service. The Balanced-scorecard system implemented in TESCO unites the group’s resources at all levels. Communication audit would be useful and effective in monitoring of the operations including risk management on a balanced basis in relation to various divisions and the stakeholders could be augmented. According to the TESCO’s website, the ‘Vision’ is for Tesco to be: Most highly valued by the customers we serve, the communities in which we operate, our loyal and committed staff and our shareholders A growth company A modern and innovative company Winning locally, applying our skills globally This vision statement and one of its stated strategies ‘to put our responsibilities to the communities we serve at the heart of what we do’ seeks to communicate its commitment to its stakeholders which includes community as well. The intense competition in the retail sector in the UK and globally necessitates advanced planning and formulation of effective strategies in achieving its corporate objectives. The expansion of the business into new products and services calls for coordination of its various activities at all levels. It also underlines the need for an integrated communication policy for a sustained development in the long run. Communication in an organization has several dimensions and is complicated unless it is coordinated with high standards of efficiency and audited on a regular basis. Communication audit The standard of living of the people has been increasing over the period of time which results into changes in tastes and fashions and shorter product life cycle. This is an important factor especially in retail business of TESCO and Communication audit would be useful in evaluating the communication strategies adopted by the company to make suggestions based on the study and analsysis. The communication strategy within the company will foster adaptability of the organization in tune with the environmental changes for sustainability. TESCO (2010) states “We have a structured internal communications programme that provides employees with a clear definition of the Group’s purpose and goals, accountabilities and the scope of permitted activities for each business unit, as well as individual line managers and other employees”. In the retail industry, there are several channels of communications simultaneously in use, though it is predominantly direct with the consumers. However, there are other channels of communication such as brochures, pamphlets, letters, emails, telephonic conservations, video conferences and meetings which are effectively used for intra-company or external communication purposes. Apart from communication through these channels, the company communicates with its stakeholders and public through Websites, blogs, participation in social networking, Annual Reports, Articles of association, Memorandum of association, promotional programs, educational and training programs to employees and consumers, advertisements, and cultural meets or interactions at community level, apart from formal/informal communication through organizational structure. Engagement with the Stakeholders In the company’s website, shareholder information is given under ‘Investor Centre’ which consists of information about the company meetings, information about the company shares, news releases, corporate governance practices, Annual reports and reviews which are relevant to the investors. Also, the Articles and Memorandum of association and the documents filed with Stock exchange are public documents available to stakeholders like investors, creditors and suppliers. Most importantly, Directors’ Report on Corporate Governance seeks to communicate that Tesco Plc is committed to the highest standards of corporate governance to the investors, consumers and the public alike, highlighting the group’s Code of Business Conduct, the Combined Code on Corporate Governance and Code of Best Practice. Under ‘Internal control & risk management’ it is stated “We recognise the value of the ABI [Association of British Insurers] Guidelines on Responsible Investment Disclosure and confirm that, as part of its regular risk assessment procedures, the Board takes account of the significance of SEE [Social, Ethical and Environmental] matters to the business of the Group”. A pertinent point with reference to communication is that the company summarises feedback from shareholders which ensures the board’s consideration of the investors’ view on management strategies for a balanced perspective. This is in addition to regular meetings, on one-to-one and group basis, with Socially Responsible Investors (SRIs) to discuss about CSR and governance issues. Also, there is a separate program for engagement with the stakeholders. The employee relationship is guided by well defined guidelines. Group Employee Relations Manager’s role in TESCO is summed up succinctly in the job description which states: “My role is to champion Employee Relations good practice and initiatives that underpin Tesco business strategy and support key deliverables in Country People Plans to be implemented. I will be responsible for reviewing and updating Group people policies and procedures to ensure they fit with the Employee Relations Framework and are compliant with National and International legislation”. Compliance with the national and international legislations has been clearly spelt out which communicates the employment policy of the company in unequivocal terms. Corporate Social Responsibility (CSR) and communication TESCO’s Corporate Responsibility Report covers all Tesco Group activities in the financial year March 2009 to February 2010. It is aimed at anyone seeking a complete yet concise overview of its corporate responsibility strategy, policies and performance. Blowfield and Murray (2008, p.24) state “There are various ways of categorizing the main issues that fall under the corporate responsibility”. He has listed out Business ethics, Legal compliance, Philanthropy and community investment, Environmental management, Sustainability, Animal rights, Human rights, Worker rights and welfare, Market relations, Corruption and Corporate governance as the prominent areas of corporate responsibility activity today. If we carefully observe the statement, it could be inferred that the common threads in the various responsibilities mentioned are, the corporate set up and community; the connecting link is ‘communication’. Leveraging the benefits of CSR activities undertaken by the company hinges on efficient communication to the stakeholders and the society. It is a very diplomatic exercise on the part of the management because the communication efforts should not give an impression that the CSR activity is grounded on ulterior business motive. It needs to be communicated as a normal business activity in line with the corporate responsibility assumed by the company by ways of its CSR policy and its values ingrained on corporate philosophy. The accusation of price fixing by major supermarkets has been a cause for concern in the industry. Poulter (2008) stated “Supermarkets and big brands could face fines of more than ?300million after claims they colluded on the price of food and health and beauty products,” and Tesco is among the major supermarkets being investigated for price fixing. This accusation cannot be ignored as it impinges on the integrity and trust and reflects unethical attitude on the part of the supermarkets. Though it involves Asda, Sainsbury's and Morrisons in addition to TESCO, it is not a solace for the loyal customers of TESCO as it has cast a shadow on corporate social responsibility, which has been relegated to the secondary place when it comes to the question of profitability. The episode indicates the lack of foresight on the part of the company in reorienting its communication strategies to keep off from allegations of these sorts. Environmental focus It is important to note that evolving suitable strategies for inviting, receiving and analyzing consumer reactions and suggestions could form a basis for formulation of strategies to consolidate and improve the market share in the business. Grijp and Hond (1999) observed “companies in the conventional food industry and retail trade are taking initiatives aimed to increase the market share of food products produced with substantially less or no pesticides (p. iii) European organic production steeply increased in the last decade: the number of organic farms rose from less than 10,000 to more than 80,000, and the acreage from less than 250,000 to more than 2,200,000 ha (cp. Comber, 1998, Rippin, 1999, Willer, 1999). (p. 10).” The extent of shift in consumption pattern in the industry which might affect TESCO’s business could be gauged from the communication audit with reference to the changes in consumption as revealed in market surveys, interactions and feedback from the consumers. Proper evaluation is necessary to reorient its strategies in line with the findings in the survey and feedback received from the consumers. The Corporate Responsibility Report of TESCO states that new stores built between 2007 and 2020 to emit half the CO2 of a 2006 new store and reduce emissions per case delivered by 50% by 2012, and plan for zero carbon by 2050. TESCO’s a annual report for 2009 states “emissions from our baseline 2007 store and distribution centre portfolio have fallen by 7.8% over the past year and new stores and distribution centres built since 2006/7 are on average emitting 28.8% less CO2 than their equivalents in 2006/7”. Thses messages could send signals to the customers with environmental concern to favaorably view their relationship with the company and this aspect has been strenthened by the report by McDermott (2009) which states that UK supermarket chain Tesco can stick a feather in its waste-reduction cap: Its 2,300-odd stores have managed to divert 100% of their waste going into landfills nearly six months ahead of schedule -- a decidedly good thing. According to TESCO’s website, they turn recycled carrier bags into refuse bags and recycle cardboard boxes to make new one. Waste is used to make alternative sources of energy. 5,000 tonnes of waste meat generate about 2,500 megawatt-hours of renewable electricity. Advertising Communicating business values through advertisement could be effective. "Every Little Helps" had become the driving philosophy that steered every initiative that Tesco made… Over the last five years, the flexibility of this idea had allowed Tesco to communicate service, quality, range, value for money and Clubcard, yet remain faithful to the core "Every Little Helps" philosophy. (Gouveia, P., 2008) Properly planned and organized advertisement strategy could enhance the brand image and brand value of the products. The communication value of ‘Every Little Helps’ has been so powerful that it had motivated the staffs of TESCO to keep the promise. Training and development programs Tesco (2009) states “At any one time we've got 7,000 members of staff on development programmes specifically designed to help them gain the experience and skills they need to move on to the next Tesco challenge”. It is said 80% of the management staff of TESO are filled by the existing team members. This is because strong sense of belonging and commitment is communicated to the young people during training period. This enables the people to integrate themselves with the company, embrace its culture and contribute for its development. Section 2 Communication management The information within the organization flowing both formally and informally, there is need to emphasize clarity by avoiding ambiguity at all stages. The direction of the communication within the organization may be lateral or vertical, and in the later case, it could be upward or downward. Generally the aspect of upward communication has been ignored by the companies, but needs to be encouraged in an organization for the proper flow of ideas and opinions by way of feedback to the management for reorienting the business strategies in line with the business requirements. Establishing standard framework for communication at all levels within the organization and integration of the communication process is essential for proper flow of information. This will eliminate uncertainties, facilitates interaction and sharing of information for timely decision making, because various divisions in an organization are interdependent. Therefore, integration means bird’s eye view of the organizational structure for efficiency in communication for seamless flow of information cutting across the divisions making team effort or collaboration easier at all levels. The reporting system should also be in tune with the risk management strategies of the organization and ensuring flow of information is related to risk. It should be in line with the need, level of authority and strategic importance in the decision making process. For instance, reporting low risk information to board or communicating information which needs board level decision to all and sundry will defeat the purpose. The operating procedures should be evolved with regard to the communication strategies in such a manner that it lends focus to the decisions based on the level of risk, priority in customer satisfaction, impact of the incident on overall performance, frequency of occurrence and other relevant factors. The degree of importance that can be attached to an action is an important factor in working towards excellence, since ‘zero tolerance’ is a very costly proposition in any business activity, especially so, in the case of retail industry considering the diversity of the clients, their needs, whims and fancies. A study by Cascio (1993, p. 1) reveals three important issues in HRM: the role of human resources in international operations; managing a multi-cultural workforce; and developing management talent in a global business environment. It is very important to note that the communication strategy should form the basis for effective management concerning these important issues. For instance, Tse, V. (2010) states that audit work performed and the investigations conducted in the IKEA’s Russian operations by the firms like KPMG, Ernst & Young, PriceWaterhouseCoopers, Sweco and Cowi revealed the shortcomings in shopping centres' buildings, lack of permission for operations, poor corporate governance and weaknesses in internal controls and poor personnel management. It is also implied that the company has failed to make prior assessment of the situation and implement a suitable communication strategy. Categorization of the information to be communicated based on the likely hood or probability of an event will make the system more efficient because it lends focus to the risk manager in his functions as it prioritizes the activities. After the advent of internet, there is a tendency among the people to mark copies to several persons irrespective of their relevance to the issue. The procedure should be need based, and it is very important that the messages are communicated properly only to the concerned authorities. For instance, marking copy to a person who has no responsibility over the issue or authority to take decision on the issue may lead to misuse or abuse of information. When there are changes in the hierarchy, internal controls or systems the people connected to these change need to be notified with the revised guidelines. In the case of external communication, it is important to ensure that the message proposed to be conveyed, or the information intended to be disseminated reflects honesty, integrity and high standards of the company. It is not only applicable to the information but all actions related to the company which will have an impact on the reputation and values of the company. Anything which is sensitive needs to be avoided. The organization needs to respect the social and religious values in the society, cultural background of the various communities within the society. The information or actions should not give rise to controversies, misinterpretations or legal issues. Section 3 Corporate Watch (2004) quoted Carlos Criado-Perez, former chief executive of Safeway Plc as saying 'Tesco will just sail away. It will become unreachable, and the Competition Commission has perpetrated that. The only thing that could bring Tesco down is its management, and they do not make mistakes'. Adopting highest standards of corporate governance as claimed by TESCO forms the foundation for its success. Revamping of its communication strategies would make the foundation stronger for a sustainable growth and development. Communication strategies In respect of internal communication, standardization of the usage of words, presentation, salutation with proper classification with regard to the level of importance, urgency, the risk involved and the nature of the information, whether it is special or routine is essential. Framework for integration at corporate level for efficiency in communication needs to be established with proper checks and balances. The same strategy could be adopted in the case of external communication also on selective basis, considering the commercial constraints. Theoretically, communication has been categorized into different levels and types with several variations and each level of communication could be formal or informal, personal or impersonal. Intrapersonal communication is based on the self concept and interpersonal relations which is relevant for our discussion involves dynamic communication between two, group communication among three or more persons, organizational communication within large organizations or mass communication through television and newspapers. In a multicultural background with employees and consumers from various ethnic groups, communication should not be a source of conflict in the business operations, and the communication strategies should be structured by standardization of the procedures to avoid misunderstanding or misinterpretation. With regard to external communications such as advertisements, press notes or promotional programs, basically the message needs to be clear, decent and non-controversial. There is need for plan to develop the content in tune with the values and philosophy of the company. What one wants to communicate, how it is to be communicated, what are all the benefits involved, what are the issues which need critical assessment and is the cost justifiable in relation to the benefits are some of the important factors which should be considered carefully. A Communication committee could be formed to assess the content for external communication and other corporate actions based on the economic, social, cultural and legal issues to avoid controversies as in the case of H&M and KFC. “H&M, which was caught by the New York Times shredding unsold clothes from a Manhattan store, rather than donating them to the homeless; and a KFC television advertisement in Australia which provoked … accusations of racism in the US”. (Gapper, 2010) It could be observed that the negative publicities resulted on account of incidents cited could be attributed to lack of framework to evaluate the corporate actions and its communication values. Media is like an Octopus which seizes these types of opportunities and drives it through internet, intranet, websites and blogs with tremendous negative publicity to the embarrassment of the corporate company, and it is always impossible to backtrack from situation. Once, the damage is done, it is very difficult to rectify the situation by issuing defensive statements in the media, because, in that process one can only keep the incident alive in the memory of the public. Communication audit assess the impact of corporate actions and effectiveness of the communication strategies and programs through various channels and media. The audit could identify the weak spots in the strategies and suggests ways for strengthening the organization’s communication strategies and programs. Launch of CSR Programs TESCO has over the period of time launched several CSR programs by way of its corporate policy. For instance its website (2011) states “The Tesco Charity of the Year partnership, launched today (1st March) will fund new research, dementia support professionals to help those living with the condition, and a Dementia Community Road show that will travel around the UK raising awareness of dementia and encouraging people worried about their memory to visit their GPs.” Under this TESCO’s association with Alzheimer's Society and Alzheimer Scotland, a range of product promotions have been launched by TESCO. A portion of their sales under these programs will be donated to the charities. Such initiatives of the company send strong signals to the society about its CSR policies and commitment to the development of the weaker sections of the society. According to Get CSR Connected, Tesco is leading the way in giving their time to local community days.  Staffs from both Cheshunt and Welwyn head offices have been out there delivering the company's commitment to community initiatives. The range of services includes developmental activities in school, healthy living and gardening. The involvement in the activities of the local communities endears the organization to the local community and gives a clear message to the community about the positive role of the company in the community welfare. Recruitment and company values Judith Nelson, head of stores HR at Tesco, says: "We have invested a lot of time and money in understanding and responding to our customers, what motivates them to shop with us and what they expect from us. It is important our staffs are aware of customer expectations and that they maintain a positive, consistent attitude. We need to make sure all our employees understand their role and how valuable their contribution is to the company and its success." The success of the company is based on the support received by the company from the employees. Therefore, it is necessary that the new recruits understand the values and core purpose of the company. The induction program for this purpose is innovatively structured to educate and communicate to them in different style of learning. Tesco has in coordination with BigPicture Learning - an organisation that specializes in bespoke, visually-based communication and learning solutions developed an induction programs for the new recruits in line with the expectations of the company to achieve their objectives. Antonis, N. (2005, p. 171) “The audit of written communication uses content analysis to evaluate all written communication…The audit of written communication undertakes the evaluation of organizational communication based on the coding of recorded communications such as memos, policies, manuals, etc. It is focused on what is written.” Therefore communication audit conducted in the backdrop of standardized environment would be very beneficial. Also, standardization procedures make the records amenable to quantitative or statistical analysis, because the documents are standardized and codified and the information structured in line with the framework. The finance committee, audit committee, compliance committee and CSR committee already existing in TESCO could form a basis for ‘communication committee’ by one member from the each committee becoming the member of ‘communication committee’ which could evaluate the communication strategies on case to case basis on the merits of each case. The will pave way for integration of communication strategies at corporate level. A close coordination with the internal audit department would enhance the process of communication audit to make it more flexible and efficient for working toward achieving the corporate objectives and goals. Conclusion The communication strategies play an important role in integrating the organization at all levels in a seamless manner. The review of communication strategies and the assessment of its contributions to the overall growth pave way for identifying the strengths and weaknesses for revamping the strategies. Standardization of the formats for communication and procedures has been recommended in the case of internal communication as well as external communication on selective basis. In the case of external communications and company actions, there is need for developing the content in tune with the values and philosophy of the company. It is recommended to constitute a Communication Committee to evaluate the communication strategies on case to case basis on the merits of each case. On implementation of these proposals, the process of communication audit will be more flexible and efficient. References Antonis, N. (2005), Communication Audit as an Integrated Communication Measurement Instrument: A Case Study, University of South Africa, uir.unisa.ac.za/bitstream/handle/10500/1969/dissertation.pdf?sequence=1 Blowfield, M. and Murray, A. (2008). Corporate responsibility, Oxford University Press, ISBN-13:978-0-19-920909-5 Cascio, W. F., 1993, ‘International Human Resource Management Issues for the 1990s’, Asia Pacific Journal of Human Resources, Volume 30, Issue 4, pp. 1-18. Coffman, J. (2004), Strategic Communications Audits, Communications Consortium Media Center, http://www.mediaevaluationproject.org/WorkingPaper1.pdf Corporate Watch (2004), TESCO, http://www.corporatewatch.org.uk/?lid=252 Gapper, J. (2010) The world of the instantaneous corporate scandal, Financial Times, January 7, 2010. http://blogs.ft.com/gapperblog/2010/01/the-world-of-the-instantaneous-corporate-scandal/ Get CSR Connected (2011), Tesco Community days, http://www.getcsrconnected.org.uk/tesco_community_days.php Gouveia, P. (2008, Case Study: Tesco Part 3, Marketing Web, 1 December 2008, http://www.marketingweb.co.za/marketingweb/view/marketingweb/en/page71639?oid=113710&sn=Marketingweb%20detail Judith Nelson (2003), Tesco puts its new recruits in the picture, http://www.personneltoday.com/articles/2003/04/01/18436/tesco-puts-its-new-recruits-in-the-picture.html Poulter, S., 2008, Supermarkets facing huge fines over price-fixing claims on big-brand items, Mail Online, 26 September 2008, TESCO Careers (2009), Training & Development, http://www.tesco-careers.com/home/working/training-and-development Tesco Plc. (2009), Corporate Responsibility, Retrieved on March 21, 2010 from http://cr2010.tescoplc.com/ Tesco Plc. (2010) Internal control & risk management, http://www.tescoplc.com/plc/ir/corpgorv/riskmanagement/ TESCO Plc. (2011), TESCO Launch Charity of the Year, http://www.tescoplc.com/plc/media/pr/pr2011/2011-03-01/ Tse, V. (2010) Ikea owner 'distressed' over Russian expansion, The Local, 11 December 2010, http://www.thelocal.se/30768/20101211/ Read More