Introduction
Management of any organization and at any level of a given organization depends on the acquisition of relevant information, analysis and interpretation of such information, communication of the information to other parties as well as making managerial decisions based on the information flow. Communication defined as the flow of information is thus a core tool to management and operations of business entities.
While internal communication entails information flow within an organizational set-up, external communication involves information flow between an organization and other parties that are not within the structure of the organization. This paper seeks to discuss the subject of external communication. The paper will undertake a literature review over external communication, look into a case study of a travel company and relate the company’s operations to external communication.
Literature Review
External Communication
External communication is the transfer of information between an organization and other parties whose interests are vested in the organization. Such parties includes, though not limited to “customers, suppliers, other firms, the general public and government officials among others” (Boone and Kurtz, 2010, p. 1). Such communication is normally intended for the improvement or maintenance of an achieved image of the subject organization. The parties with which external communication is established are basically entities with which the organization shares some particular interest. Customers to an institution, for instance, depend on such communication in order to make advances for orders of the entity’s products. Organizations also make particular advances through advertisements to improve their sales through customer’s influence.
It is this communication that will help an organization to develop its goodwill in a competitive market relative to its competitors by reaching potential customers and winning their confidence towards the provisions of the organization. Establishing communication with suppliers to an organization is also important to its smooth operations as suppliers determine the continuity and even rate of operations. An established communication will, for example, guarantee information to the suppliers over the demand for supplies that will help in taking measures to ensure timely delivery.
It also ensures adequate information on specifications of what the organization is in need of so as to help in accurate acquisitions of whatever items the organization may require. Parties such as government agencies and officials also use information provided by such communication to ensure that law and order are maintained by institutions. External communication is thus a tool that is necessary to both the organization and the parties that the organization communicates with (Boone and Kurtz, 2010, p. 1).
Roles of External Communication
Firms undertake communication with the aim of facilitating operations for effective and efficient management and achievements. While internal communications are meant to ensure continuity in operations with respect to relations within an organization, external communication establishes relations with outside parties that are essential to the organization. External communication thus plays the overall role of ensuring links between the organization and any external party from which the organization can develop interest. One of the roles of external communications is to illustrate to the audience the achievements of the entity. Such a role is normally undertaken to help in attaining a variety of goals and needs that the organization can derive from the external parties. A consideration of suppliers, for example, describes the role of external communications in developing relationships with reliable and committed suppliers who can guarantee continuity of the organizations operations.
The basis is the fact that as much as the suppliers are interested in making supplies to garner sales, they are also concerned about the possibility of getting paid for their supplies. Well-established suppliers who are also in most cases the most reliable ones make inquiries over their customers prior to making engagements for supplies. It is with this respect that an elaborated external communication is necessary to ensure that the subject entity has positive information to the external parties that can give suppliers confidence into making commitments with the company. Showing achievements that the organization has made in the past will form a basis for attracting the suppliers on the ground of creditworthiness and even reliability in terms of making payments. This is similarly effective with respect to consumers of the entity.
Just as the entity is interested in reliable suppliers for its needs are the consumers’ expectation of the entity that they would want to commit their needs to. A particular example being with respect to large scale consumers such as institutions whose orders must be prepared over time. A consumer will therefore be interested in information about the institution that can offer indications as to whether the organization can be trusted with the customer’s orders. These describes one of the roles of external communication which is to express the achievements and values as established by the organization to help in developing goodwill for a positive perception of the organization by external parties (Hassp, 2010, p. 1).
External communication is also identified as a tool to developing partnership between an organization and other parties. Business operations are characterized by integrations that involve experiences like acquisitions and mergers in order to accomplish given objectives. Other initiatives such as attracting investors to partner with the organization in a bid to help in raising more capital for operations have also been familiar in the corporate world. Partners to these initiatives are however normally interested in the safety of their investments to avoid losses.
Competition for such investment partnerships have also been realized calling for initiatives by organizations to attract potential partners. External communication plays the role of developing an image of the organization that though should reflect the exact status of the institution, offers an attractive perception of the organization to the investors. This attracts offers for partnerships and even facilitates acceptance of proposals for partnerships that the organization can make to the third parties. On this basis, external communication forms the basis upon which an organization can form partnerships (Hassp, 2010, p. 1).
Though a developed reputation may be realized by parties that an organization deals with, there is a need to express such developments to other parties that might in one way or the other be of the company’s interest. Parties that have been in contact with the organization may also out of normalcy not be in a position to realize qualities that are exhibited by the company. An established communication of qualities and achievements of an organization is with this respect identified to help in establishing and developing goodwill that every business entity requires for its market penetration. The communication of what an organization can offer to its customers and even suppliers will thus help in boosting its image, a role that is critical in any competitive market.
Communication being a dual way process also establishes a reverse role of external communication. In just the same way as an organization reveals its information to external parties to its benefits, information that the organization can acquire from these parties is also of absolute profit to operations and expansion of the organization. An organization that requires funding or partnership deals will be interested in information about their potential partners or investors especially if the number of such required parties is few with significant level of potential influence on decision making of the organization. External communication also plays the role of establishing information about external parties with which the organization deals such as customers, suppliers and even government agencies to ensure that decisions that are made by the organization are well informed (Hassp, 2010, p. 1).
According to Jeucken Marcel (2001), external communication plays the role of expressing the position of an organization to parties that may interact with the institution. Among the activities that are involved in external communication are “codes of conduct, environmental reporting, participating in networks and sponsoring” (Jeucken, 2001, p. 172). In illustrating codes of conduct that are adopted by an organization, the information expresses to the external parties the kind of treatment that they are to expect from the organization and for this reason forms ground for responses from the parties which consequently helps the organization’s management in identifying issues in the organization that needs to be adjusted in order to meet customers’ expected utility.
This aspect of external communication gives it the role of a management tool. Communication activities such as expression environmental policies of an organization also creates an association between the organization and the general public on the basis of social responsibility thus forming a ground for developing a positive image of the organization among the public. This on the other hand gives external communication the role of marketing its organization among potential customers (Jeucken, 2001, p. 172).
Importance of External Communication
External communication has become an important aspect of every business entity following the level of interdependence that is realized by individual parties in the corporate environment. This interdependence among entities for the final production of goods and services establishes the first advantage external communication. A service-providing company will, for example, require equipments that are used in the provision of its services to its customers. There will, therefore, be an established link between the organization, the parties that supplies the organization with equipment and also its potential customers. Communication with suppliers will ensure availability of equipments that enables the organization to operate in its service provision.
Communication with customers is equally critical to the organization on the basis of creating and developing its markets. Communication is thus important in ensuring a well coordinated supply chain in an industry. This further derives benefits that parties to a supply chain can derive from effective communication. Supply chains that deal with perishable commodities, for example, greatly relies on communications among stake holders in the chains. A consideration of perishable raw materials that are used in the production of perishable products, for instance, calls for adequate communication among entities that are involved in the chain. This will help in managing time duration within which inventory, raw materials, work in progress and the finished products, must be held before they lose value.
A continuous flow of information right from retailers who are in contact with consumers up to the parties that are involved in the production of raw materials becomes a necessity to avoid losses on any of the involved parties. A continuous level of communication along a supply chain ensures timely production with optimum output levels that will guarantee consumer utility and at the same time minimize loses among parties at the different level in the chain. If to the contrary communication is not effectively instituted among independent parties in a supply chain, then there would be either of two occurrences that would offset the supply chain to the disadvantage of parties to the chain.
An absorption of excessive raw materials into the system will institute a surplus at a chain level that will result in loses due to materials being stale while underproduction of raw materials would lead to shortage and a subsequent crisis that would be contrary to the role of external communication portraying a poor image of involved parties in the supply chain with accusations of inefficiency or even hoarding. External communication is thus an established necessity to link an organization with other parties to ensure that the organization functions effectively to the satisfaction of its customers and its suppliers as well as any other party that derives benefits from the operations of the organization (Kushal and Ahuja, 2010, p. 23).
Similarly, external communication by an organization has been credited for growth and development of organizations. An effective external communication as identified by developing goodwill of an organization offers a marketing ground for the organization which is a considerable asset to the particular organization. A guarantee of “existence and growth” is also realized to be associated with external communication (Krizan et al., 2007, p. 3).
It has been noted that sources of revenue which are occasionally dominated by proceeds from sales of goods and services and whose association with stability and continuity of an organization are significant and directly related with some aspects of external communication. Factors such as advertisements of particular commodities and general information as offered by organizations to the public that instigates influence into products of the organization play a role in the levels of sales hence levels of revenue as realized by entities.
An organization that has a well developed external communication with respect to what it offers thus stands a high chance of gaining influence over its market as compared with one that is not effective in external communication. With an effective external communication, a firm can create information to the public over its newly introduced products or even improvements in its commodities. As a result, the public will be aware of existence of the offers that may create some influence over consumers to improve on the demand of the organization’s products.
Recruitment process of an organization also derives benefits from the capacity of the organization to employ qualified personnel. The recruitment process that generates the population from which human resource can be selected greatly depends on the extent of coverage that the organization exploits in its advertisement for vacancies. Again a well established external communication that recruits a variety of people will lead to more options from which the organization can chose individuals with the highest qualifications (Krizan et al., 2007, p. 3).
Types of External Communication
External communication can either be oral or written. A consideration of oral type of external communication further reveals two approaches that communication can be adopted by an organization. An entity can adopt a face to face communication in which a representative is sent by the entity to go and have a direct one on one communication with a representative of the external party. This type of communication is identified with a number of advantages and disadvantages that are associated with it. The method is for instance recognized to be faster in relation to other types of external communication such as the use of letters. It is also effective in eliminating misunderstandings that may blur communication between an organization and any external party.
The face to face communication is however costly especially when the distance between the organization and the other party is identified to be wide. It is also more time consuming as compared to other communication types such as the use of telephones. The use of telephone is another type of oral communication that can be adopted in external communication. Though almost similar to oral communication, the use of telephone allows for communication without the necessity of either party moving to the location of another provided that they can be connected a telephone line. This type of external communication has the advantage of saving on time that could have been used was the organization to send an individual to the location of the other party. It is, however, faced with the disadvantage of high costs that are involved especially if calls are to be made across national borders (Egyankosh, n.d., p. 68).
Apart from using oral type of communication, an organization can resort to the use of written information which is normally realized in the form of “letters, circulars, notices, memoranda or reports” (Egyankosh, n.d., p. 68). Contrary to the advantages that are realized with oral communication types, written communication types are more popular with an organization’s external communications for a variety of reasons. The need for records to show evidence of communication is one of the factors that have driven the preference of written communication over oral types. Legal and ethical requirements that some categories of communication be put in writing have also been a factor towards the wide adoption of written communication by organizations.
Credibility of written and approved communication as evidence in claims that could be in a judicial proceeding is one of the advantages of written communication that also makes it a preference as compared to oral communication. It is also more accurate owing to the fact that it reproduces information in the exact representation that it took during its original presentation. It also adopts an authenticity of recognition especially if it is well documented to conform to a recognized authorization of its parent organization with features such as letterhead and signatures and positions of origin in the organization (Egyankosh, n.d., p. 68).
Case Study Review: Alnaqbi Travel Agency
Having enjoyed dominance of the travel agency market in the United Arab Emirates, Alnaqbi agency was faced with stiff competition from other service providers that threatened its customer influence. Though the agency provided a variety of services, transport by air, which was threatened by competition was its major. In a move to control this increasing competition, the company resorted to transformation in its system to enable it to maintain its market share. Competition that the agency faced from the other service providers instigated provision of improved services in general and an adoption of “a three class system that comprised of coach, business class and first class” (Home, 2010, p. 1).
In response to this, Alnaqbi decided to diversify its services by introducing a new brand of its service, the business class which was to be introduced with respect to some of the routs on which the company’s planes operated. The modification would change the company’s services in the selected route from a two class service operation to a three class operation in which there was to be an upgrade into first class services. This would however be faced with commitments on the side of the company with respect to financing the changes. These would be realized with respect to the physical changes that would be realized in the cabin as well as the developed skills that would be required among personnel in the new cabins (Home, 2010, p. 1).
The level of competition that the company had been facing was based on the difference in the services that its competitors were offering. While the company initially offered first-class services and the couch services, there was a group of service providers who offered “a superior first class and a coach class service” (Home, 2010, p. 1) and the other category of competitors that offered the business class services together with a coach class. The two groups thus had independent advantages over Alnaqbi in the extra class of passengers that they could carry as opposed to the subject agency.
The first group had its superior first class while the second group had its business class. These variations drove the agency to consider an incorporated facility that would combine three classes of services. The coach class would be retained to maintain a balance in competition on what the other two categories provided. At the same time, the company would introduce a business class and upgrade its first-class services to match those of the superior first class as offered by some of its competitors.
The main aim of the approach to counter the increasing competition was that the company establish a road map that could not be in any way matched by any of its competitors, at least in the short run. In the changes, the company proposed improvements that would realize the business class travels in their own cabin with even better services. The onboard services were for example supposed to be upgraded to a standard that could not in any way be compared with the services offered in the coach class. The first class was to be fitted with even more lucrative services that included extravagantly comfortable seats together with “videos, freshly backed cookies, and flight attendants at your beck and call” (Home, 2010, p. 1). It also ensured that the business class and the first class customers would be offered separate pre flight services from the normal coach class to offer them better utility for their money.
Though the proposals had a significant level of promise to regain dominance of the market that was threatened by the competitors, the amount of investment that was required in return was challenging. It was for example estimated that renovation of a single airline would cost more that a million dollars while at the same time, the company would require about ten flights in one line in order to maintain its frequency of daily services. The cost of improving the services that are offered on board as well as training the flights’ personnel to the proposed standards would as well cost at least ten million dollars. There was also the challenge of induced level of inflexibility in the operations of flights by the company in the rout that was earmarked for the renovations.
This meant that no plane would be able to shift into the route unless the same renovation was done to it. As a result, spare planes would be renovated to ensure continuity in operations in case of emergencies that could be realized in the route. The cost of the proposed strategy was thus the major threat since it would be a mandatory for the effective implementation of the project. The inflexibility that would be induced with respect to the capacity to shift flights according to the needs of services in different regions was also an identified challenge to the implementation of the project. The project however at the same time held a promise of helping the company to capture more customers through its diversification.
The introduction of the intermediary business class would for example attract the average category of customers who could be able to afford the introduced business class but not the originally available first class. Upgrading these individuals to the business class that attracts more fare as compared to the coach class which the individuals initially used would help the company to increase its revenue even if it only maintained its already existing number of customers. The diversification of both services offered as well as the prices for the services would provide a wide base for customer choice and utility that would enable the company to retain its customers besides attracting more. This would create a market advantage that would be absolutely hard for the competitors to break (Home, 2010, 1).
Even though the plan looked attractive, its implementation could not be immediately approved due to consideration of other market factors that would contribute to success in countering competition as well as maintaining the profit margin that the company had been realizing from its operations. The level of revenues that could be generated from the adoption of the proposal was for example not ascertained posing threats that the investments into the project might not probably have been recovered to ensure a recorded profitability of the investment.
Frequency of flights under the new arrangement could similarly not be predicted putting doubts on the possible level of revenues that could be generated following the implementation of the project. The case study thus put the company in a difficult position from which it is forced into making a choice. There is the problem of increasing competition that threatens the company’s market share on one end and the option of risking into decision of adopting the proposal that has the potential of countering the level of competition from other service providers but at the same time puts the company at risk of miscalculations that could lead to losses (Home, 2010, p. 1).
Importance of External Communication in Alnaqbi Travel Agency
The case study of Alnaqbi travel agency reveals a time in the life of the company in which it is faced with stiff competition and when it is at the same time considering an option to counter the increased competition in its market. There are a variety of advantages of external communication that the company can use with respect to its condition so as to make a step forward with respect to countering the increasing competition that it is faced with. The first advantage of external communication that the agency can use is the ability of external communication to establish growth and development of the agency. With the rising competition facing Alnaqbi there is a possibility that the other companies have identified some techniques by which they offer more utility as compared to agency.
Alnaqbi can therefore use external communication to establish the factor that is contributing to its losing of market share and utilize the same communication to look for solution to this crisis. A consumer-based solution can be a better approach to identifying what will satisfy the consumers best. This approach can help the company to grow in terms of its market share. Such research initiatives with potential customers as the respondents would also help the company to identify and develop more brands of services to help it capture the market. Another advantage of external communication that the company can use is the benefits of advertisement. Since its major problem, according to the case study is increasing competition, it can be presumed that the company is losing a percentage of its customers to its competitors or that it is failing to attract more people into its services as compared to the other companies.
Advertisement being a means of communicating the presence or improvement of a commodity would thus form a base for the agency to try and reach potential customers and inform them of the services that they offer and convince them to shift to the services offered by the company. Advertisement would also be beneficial to the company with respect to expanding its market to regions that it has not yet explored. Through the use of advertisement, the agency can venture into an unexploited market and convince people into adopting air transport as a means as opposed to the modes that they would be using.
External communication is also beneficial in providing information to the organization with respect to regions with potential markets. In linking with other parties such as resource organizations and research centers, the company is able to acquire information about regions in which the markets are not yet explored or even explored but the company can have an advantage over the existing service providers. On this ground, the company can take advantage of external communication to expand its market by making new ventures in other regions (Krizan et al., 2007, p. 3).
According to the case study, one of the limitations to the proposal of countering the developed competition in the market was the high costs that were associated with the implementation of the proposal. Another factor that limited the implementation of the proposal was the level of uncertainty over the success of the proposal together with its viability with respect to recovering the amount of money that was to be invested in it. The role that external communication plays with respect to developing partnerships between an organization and other parties makes it important to the company with respect finding solutions to the two problems, soliciting for funds and clearing the uncertainties.
Through outflow of information from the company to identified individuals or entities that can partner with the company as investors to generate funds for the implementation of the project the firm can be able to get money for implementation of the project. Communication from external parties that are interested in investing in the sector could also illustrate the importance of external communication. Recruiting of a team of experts from outside the company to analyze data of the agency with forecasts to established the trends that can be adopted following the implementation of the proposal. The search for such parties will be based on external communication. External communication would thus be very important to the company at its condition as illustrated by the case study (Hassp, 2010, p. 1).
Channels for External Communication
Based on the presentation of the case study, the major cause of loss of market control by the Alnaqbi agency was the variety of services that was offered by its competitors. This establishes the problem of the organization to be based on the consumer choices and the services that the agency offered. The best channel of communication that would be most appropriate for regaining the confidence of the consumers would be to convince them that the services offered by the agency are equally satisfactory or to introduce better services and inform the customers of the newly introduced services and at the same time attracting them to the developed services. Marketing would therefore be the most appropriate channel of external communication for recapturing market control. Proper management that can identify strategies that the company can develop into its recovery and into the implementation of the proposal is also a channel. Marketing would however be the best alternative for the company (Home, 2010, p. 1).
Model of External Communication for Alnaqbi Travel Agency
The best model for adoption by the company is a mathematical model. This is because the company requires extensive mathematical analysis for establishing factors that still remain as uncertainties with respect to the proposal for bailing the company out of the stiff competition that it is faced with. The mathematical model will review trends in the previous records of the company, projections and relationship between revenues and investments if the proposal was to be implemented (Narula, 2006, p. 12).
Recommendation
As a result of the nature of the challenge which is facing Alnaqbi company, competition, it is recommended that the company makes use of external communication to advance its control of the market. It can attain this either through advertisements or research into possible other markets that it can dominate. The availability of an option to the company’s problem that cannot be implemented on the grounds of uncertainties also calls for the employment of experts who can help in analysis and evaluations to unravel the uncertainties.
Conclusion
External communication refers to the communication between an organization and parties outside the organization’s setup. Roles played by external communication are important to the stability and development of the organization by ensuring availability of any required support from third parties. The case study of Alnaqbi travels agency is an illustration of the aspect of external communication.
References
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