2.3 Methods of communication

MHL manufactures tyres for large vehicles. It has factories in 6 countries. The business creates external costs when producing its products. Good communication with MHL’s suppliers is important. The Managing Director knows globalisation provides many opportunities for MHL. She is reviewing data for one of MHL’s factories as she wants to reduce the average cost of the tyres. An extract from this data is shown in Table 4.1.

c) Outline two external costs MHL might create when producing its products. [4] External costs 1: External costs 2:

RSL manufactures paint using flow production. Last year it produced 10 million litres of paint. RSL has 6 managers and 80 employees working in its factory. The managers use different leadership styles. RSL uses email and telephone calls as its methods of internal communication. The Operations Manager wants to understand why some manufacturing businesses are relocating their operations to other countries.

c) Outline one advantage of RSL using each of the following methods of internal communication. [4] Email: Telephone calls:

RBG is an oil company. It has operations in 6 countries. RBG has 2000 employees including 60 managers. Some of its managers use a laissez-faire leadership style. All of RBG’s internal communication uses information technology (IT) based methods. The Managing Director knows RBG’s business activities can create external costs and external benefits. She says: ‘Pressure groups often try to influence business decisions.’ (d) Explain two methods of IT based communication RBG might use with its employees. [6] Method 1: Explanation: Method 2: Explanation:

PLY manufactures hats in its factory in country X. The economy of country X is in a recession. PLY sells its hats online to the mass market. It uses email to communicate with its customers. PLY uses market research when making decisions. The Managing Director is considering ways for PLY to become more environmentally friendly as she is aware of new legal controls over business activity. She is also aware of the role of pressure groups.

d) Explain one advantage and one disadvantage of PLY using email to communicate with its customers.[6] Advantage: Explanation: Disadvantage: Explanation:

PCY provides insurance services for businesses such as farms and factories. Being ethical is important to PCY. The business has 4 offices and 500 employees. Managers use different leadership styles. The Managing Director is planning to change how PCY is organised and managed. He said: ‘I want to reduce communication barriers within the business. Delegation will be encouraged. The span of control could change.’ Do you think lack of feedback is the main barrier to effective communication in a business? Justify your answer. [6]

AH is an insurance business. It operates in a competitive market. AH has 1000 employees including 50 supervisors. The supervisors use an autocratic leadership style. AH currently has a 5% market share and is planning to take over a competitor. The Managing Director is considering how to communicate with AH’s employees about the takeover. There are many sources of finance available to fund business growth.

b) Identify two ways technology could change production methods. [2] Way 1: Way 2: