People in business - IGCSE Edexcel business studies summary notes
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Business economics
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ESO
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Pearson Edexcel International GCSE (9-1) Business Student Book
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Borja Jimenez Business
IGCSE
CHAPTER 2
PEOPLE IN BUSINESS
CONTENTS
CHAPTER 2.............................................................................................................................. 1
IMPORTANCE OF GOOD COMMUNICATION IN BUSINESSES (16)...........................................1
BARRIERS TO COMMUNICATION IN BUSINESS (17)...............................................................4
RECRUITMENT AND SELECTION (18)....................................................................................5
LEGAL CONTROLS OVER EMPLOYMENT (19).........................................................................8
TRAINING (20)...................................................................................................................... 9
IMPORTANCE OF MOTIVATION IN THE WORKPLACE (21)....................................................11
METHODS OF MOTIVATION AT WORK (22)..........................................................................12
ORGANISATION STRUCUTURES AND EMPLOYEES (23).......................................................14
IMPORTANCE OF GOOD COMMUNICATION IN BUSINESSES (16)
People in business exchange information all the time. This involves sending and receiving
information;
SENDER MESSAGE RECEIVER.
Inside a business, messages can be passed vertically (upwards or downwards) and
horizontally (from side to side). These routes are called communication channels.
- Downward communication1 usually involves managers giving information or
instructions to subordinates. This is important as;
o Subordinates will look to their manager for leadership and guidance
o It allows the decisions made by management to be carried out by employees
o It allows managers to command, control and organize.
- Upward communication2 often involves giving feedback to managers, or requests by
workers. This is helpful because;
o It helps managers to understand the views and needs of employees and
subordinates
o May make managers aware of problems
o Help staff feel valued
o Provides managers with information to help decision making
- Horizontal communication3 occurs when workers on the same level (ex. same
department) exchange information
INTERNAL AND EXTERNAL COMMUNICATION
- Internal communication takes place inside a business.
1
Passing information from the top of the organization tot hose at the bottom
2
Passing information from the bottom of an organization to the top
3
Exchange of information between people in the same level
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,Borja Jimenez Business
IGCSE
- External communication occurs when businesses exchange information with people
and organizations outside the businesses (with customers, investors, authorities…)
FORMAL AND INFORMAL COMMUNICATION
- Formal communication in business is when people use recognized channels
- Informal communication is when communication involves through non-approved
channels. Most of informal communication is done on the ‘grapevine’. This means
that unofficial information is passed through gossip and rumors. It can be both helpful
and unhelpful. Information on the grapevine may however become confusing and
misleading.
Communication often takes place between groups, which can be both formal and informal.
- Formal groups are those set up by a business. They are often shown on organization
charts as departments
- Communication between informal groups is helpful because it keeps people informed
and it encourages communication. However, it can also be a problem. One reason for
this is because leaders of informal groups often have more influence from those on
formal groups. Therefore, when formal and informal communication channels give
different messages, staff may not trust the formal communication.
IMPORTANCE OF GOOD COMMUNICATION IN BUSINESS
If internal communication is poor, problems can rise. As a result, efficiency and profitability
may suffer. Poor communication can lead to mistakes, wasted resources and confusion. It
can lead to workers not understanding what they have to do, poor motivation and some
work being accidentally repeated.
Poor external communication can make a business look foolish and may cost it money. Poor
communication with outsiders could significantly damage the image of the business.
METHODS OF COMMUNICATION
- Face to face communication takes place
when spoken information is exchanged
between people who are able to see
each other. This type of communication
is usually very effective.
- Written communication; businesses communicate written information using a
variety of methods;
o Letters; are flexible because they can be sent to a variety of people. Letters
can also be used for private information and provide a record of
communication. However, letter writing takes time and effort. Some
employees have relatively low writing skills
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, Borja Jimenez Business
IGCSE
o Reports; used to communicate important information in a formal manner.
Reports should be concise and carefully structured and presented. Reports
can also contain numerical data and graphics. The main disadvantage of
reports is that they take time to research and complete
o Memorandums; (short written notes) are used for internal communication
only. They contain brief messages and are flexible. They are often used to
remind people of events or pass simple instructions
o Forms; used to communicate routine information. Application forms are
used to collect information for jobs, loans and licenses. Forms may be
inflexible and can become out of date.
o Noticeboards; cheap to use and can pass on information to a large number of
people. However, they can become untidy and these are open to abuse and
often overlooked and ignored.
- Electronic communication; most businesses use electronic communication. This is
because it is possible to deliver messages instantly, all over the world and to a
number of people at a time.
o Email; It allows businesses and individuals to communicate by sending a text
or images instantly via computers. However, emails usually get ignored.
People at work often get do many emails that they do not have time or
motivation to read and answer every single one.
o Internet; the internet can be used for internal and external
communication many businesses also use their own website to provide a
range of information. The internet can be used to; deal with customer queries
online, obtain information bout potential suppliers, obtain information about
other companies and products for market research, advertise jobs to people
inside and outside the business, provide general information about the nature
and history of the business, market products by displaying them on shopping
sites…
o Mobile phones: they are useful when employees work away from the office or
move around frequently. Text messages can also be sent from mobile phones.
This is cheap and can be used to send or program short memorandums.
Modern phones can be also used to access the internet and send images
o Social media: businesses rely heavily on social media platforms in order to
advertise, and communicate. The information in social media is up to date
and can be sent instantly. Social media might also be used internally so that
employees can exchange information.
o Intranet: an intranet is where all computers in a particular department or
organization are linked together this enables users to access common
information. An advantage is that changes to information (timetables,
prices…) can be updated instantly and viewed by everyone
o Video and teleconferencing: this allow people in different locations to have
face-to-face meetings. Individuals or groups of people in different parts of
the world can be linked at the same type suing a system of cameras,
computers and telephones.
o Public address (PA) systems; these are often used in factories, hotels and
large stores to pass on information to staff or customers. Messages are
broadcast over the loudspeaker system for everyone to hear.
o Electronic noticeboards: these perform a similar function to PA systems
except that written messages, pictures, videos and sounds are used. They
communicate information to employees and visitors via visual display.
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