Communication: Core of the Firm

I distrust the incommunicable; it is the source of all violence. Jean Paul Sartre (Sartre and Frechtman,1948) Introduction
A review of recent literature on management, entrepreneurship, and the corporation suggests that a central concept of good management practise is readiness for change; and constant change. (Beer and Nohria, 2000, Drucker, 2001, Mintzberg, Ahlstrand and Lampel, 1998, Pettigrew, 1987, Robbins, 2002, Semler, 1993, 2003, Senge, 1994). Organisations, Senge suggests, have to be nimble on their feet, constantly scanning the environment around them to learn and absorb new ideas, innovations, ways, and methods and must be also be able to diffuse this knowledge throughout the organisation. A learning organization, Robbins (2002) state quoting Peter Senge, is an organization that has developed the continuous capacity to adapt and change. All organizations learn, whether they consciously choose or not- it is a fundamental requirement for their sustained existence. Mintzberg in his main strategic theorem of the conguration theory looks at the same process from a strategic viewpoint; for a strategy to emerge, or to move from one state to another, there has to be change involved. unaligned organizational systems and resources, poor coordination and sharing of responsibilities, inadequate Beer et.al.(2000), contends that a capabilities, and uncontrollable central pillar of management of change environmental factors. is communication. Buchanan and Boddy (1992), in their matrix of change Pettigrews (1987) framework for includes communications as one of the strategic change also sheds some light on ve main skills necessary to implement the analysis of strategy implementation. change. However, a closer study of the Pettigrew distinguishes the content other skills (Setting Goals, Building of the strategy, the outer and inner Roles, Negotiations and Managing Up) contexts of an organization, and the indicates that the skill to communicate is process in which strategic change is

The unexamined life is not worth living - Socrates

Why is communications the basis of change?

context in which it takes place must be understood. The components of strategy implementation -- communication, interpretation, adoption, and action are not necessarily successive and they cannot be detached from one another.

Not a new concept

That communication and conversation play an important role in the production of change is not an entirely new concept. One only has to go back to interwoven throughout. carried out. Pettigrew contends that the Socrates, 2,400 years ago, and his use Aaltonen and Ikavalko (2002), content, the context, and the processes of conversation as a method for seeking states organizations have difculties are intertwined and affect one another. deeper understanding; a way of seeking implementing their strategies specically This has an important impact on strategy the rock bottom truth in what was being when there is a lack of communication, implementation research. In order to discussed. He taught Western Civilisation indicating a lack of commitment understand implementation, which the art of asking questions as a tool for to the strategy, unawareness or is close to the process in Pettigrews discovering reality. For Socrates, ``the misunderstanding of the strategy, model, the content of strategy and the unexamined life is not worth living.
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Communication: Core of the Firm

Interestingly, two centuries before Socrates, Gauthama Buddha, taught his followers how to be critical thinkers by questioning every motive, reason and move. Lord Buddhas critical dialogues with his pupil Ananda forms the bedrock of the Buddhist philosophy, much in the vein of Platos records of his conversations with Socrates.

communicates information about ways and means of fitting into an overall vision the need for change and should be or Senges great dream.(Senge, 1990) consistent with the relevant Producing intentional change, then, is a matter of contextual deliberately creating, through communication and factors. conversation, a new reality or set of social structures. If this is the case, then the change process actually occurs within, Beer et.al. and is driven by, conversation and communication, rather (2000), also than the reverse. In fact, I would argue that the vocabulary argues that spoken in organisations can trap us into a particular way In modern organisations, the in-depth shared change, of thinking about our roles and relationships, because conversation in the Socratic/Buddhist centred around there is a distortion of reality and loss of capacity for mode is coming into its own again. the language of spontaneous action. (Kurt April 1999) This is fostered through the creation opportunities, of continuous learning opportunities, (as opposed to promotion of inquiry and dialogue, the language encouragement of collaboration and of change - a concept espoused by Armenakis et.al. (1999) quotes Katz & team learning, empowerment of people Wruck and Eastley(1998)- rather Kahn to argue that to create a belief that towards a collective vision, and the than that of change, whilst slower, change is needed requires a comparison establishment of systems to capture and spreads commitment through-out the of the current state of the organization share learning (Watkins and Marsick, organization and incrementally re- to a desired end-state. Nadler and Nadler 1993). (1998) illustrates the positive aspect of comparing one state to another through the vignette of Eli Lilly CEO Randy Tobias, talking to the employees about the old and the new lilies. The author contends that this comparison of states has an implicit weakness in that it assumes a debility of the former state, therefore leading to resistance from the former stakeholders. A contrastive view would assume a stateless mode; that of non-comparison. The author will attempt to build on this

enforced, leads to long-term sustainment of change. Collective leaderships where A denition of change and members play complementary rules communicating the message: appear critical in achieving change. When people share a vision, they are Change inherently assumes progression connected, bound together by a common from one state to another and therefore aspiration. In the absence of the great leads to negative comparisons of dream, pettiness prevails.(Box, Todd, the former state, which in turn impact Watts and Whisman, 1999) the stakeholders of that state, who by nature will react defensively, creating barriers against the new state. Cushman Lewins (1951) unfreezing model and King (1995), posits that effective for creating readiness for changes is communications can change these inherent in Box et.al. (1999) and Senges barriers.

(1990) contentions of creating a shared concept in the preceeding chapters. vision. Communication takes place Armenakis and Bedeian (1999), in across boundaries (the author, however, The priori of Communication illustrating the importance of creating contends there are no boundaries) and a readiness for change argues that the takes the form of discourse amongst the Academic treatments of corporate discrepancy aspect of the message members of the organization, seeking strategy, states Quirke (1998), often omit
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Communication: Core of the Firm

any reference to communication as a vital organizational Implementation of Theory; an empirical model function. There is an implicit assumption that communication Barretts (2002) Strategic Communication model (Figure 1) is simply a rational process of sender and receiver, and it takes cognizance of this through its inter-related approach barely receives mention Yet communication is the fundamental to strategy, management, processes, and communication. means by which strategy is enacted. Communication is either everything in the organization (vision, Clearly, an argument exists that without effective employee strategy, business planning, management meetings, information communication, change is impossible and change management ow, knowledge management, etc.) or it is nothing more than fails. However, the literature review also suggests that publications intended to keep the communication staff busy corporations or rms do not apply the same analytical rigor to and the employees informed of the company news. (Barrett, employee communications that they give to the nancial and 2002) operational components of the Human Resources Development continuum and its value chain. However, the author suggests Barrett (2002) believes that organizing the everything that further empirical study is necessary to establish this approach and dispelling the publication only focus are rst contention, given the paucity of information generally available steps in structuring a strategical communication program. on the role of communication in strategy, management and If management can be coached into realizing that employee human resources development. In his article, Leading change: why transformation efforts fail, Kotter (1996) lists under-communication as one of the major reasons change efforts do not succeed. Hence, there is a clear argument that management needs to recognize communication as strategic and learn to lever its strategic capabilities. Communication must play a strategic role in an organization to work effectively. That strategic role means that communication must be integrated into the companys strategy and recognized for its strategic implications and effects.

Figure 1

Transformation is impossible unless hundreds or thousands of people are willing to help, often to the point of making short-term sacrices. Employees will not make sacrices, even if they are unhappy with the status quo, unless they believe that useful change is possible. Without credible communication, and a lot of it, the hearts and minds of the troops are never captured. (J.P. Kotter 1996)

communication is a key ingredient in becoming a highperforming company, they will more likely give it the time and energy it needs and deserves. Katzenbach (1995), in his book, The Real Change Leaders: believes that for an organisation to become a knowledge economy, it needs a committed leadership group; clear performance goals; well-designed playing eld; right people in the right places; and meaningful communications. (Quoted in Barrett, 2002) Barret denes Meaningful communications as communication that accomplishes two primary objectives:
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Communication: Core of the Firm

Informs and educates employees at learnings with some practical experience that the boundaries of a rm are not xed and will change contextually. all levels in the companys strategy; as a communicator. and The organisation membrane is a Therefore, innovation occurs at the Motivates and positions employees porous, exible boundary that is capable coalface and drives the strategy that in to support the strategy and the of both expanding and imploding at the turn constructs the structure in which performance goals. same time to meet both external and management processes take over to spur internal contingencies. The porosity of individuals / teams to be productive. If communication accomplishes both of the membrane governs its interaction these objectives, it is meaningful, that is, with the environment. The boundary Conversely, by adopting the same logic, it contributes to the companys nancial is reached only when it encompasses it can also be argued that the central core success and helps the company be high the organisations end-customers and of the organisation, for it to be productive, performing. Barret breaks her denition down more specically, resulting in ve Communications at the Core primary goals for effective employee communication; thus, communication must: Ensure clear and consistent messages to educate employees in the company vision, strategic goals, and what the change means to them; Motivate employee support for the companys new direction; Encourage higher performance and discretionary effort;

Figure 2

Limit misunderstandings and rumours that may damage includes many stakeholders - at times productivity; and even competitors. On the other hand, Align employees behind the the membrane can also be termed the companys strategic and overall organisations coalface, where critical interactions with its external stakeholders performance improvement goals. occur. In a practical sense, the author Communications at the Core contend, given the exogenous inuences The following model (gure 2) is on the coalface, and the manner in a re-adaptation of Barrets Strategic which organisations employ endogenous Communications Model interweaving strategies to match or leverage changes the understanding gained from the at the coalface, the boundary does not authors efforts to combine the academic exist. Shorn of jargon, this simply means
Aruna Kulatunga - BCO Assignment

has to rely on effective communications, both internally within its organisation membrane and externally, through the membrane. As illustrated in Figure 2, communications taken as the central core of the organisation allows strategies to emerge, links the different players and extends these linkages outside of the porous membrane of the rms coalface. The membrane also divides two essential process, one internal, and the other
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Communication: Core of the Firm

external, of the rms efforts to innovate This can be illustrated by using the secure and stay ahead of the competition. modes of communicating in the Internet. Verisign, a company that marketed a The internal process, that of change, method of conrming the identity of the and becoming a learning organisation, messenger (or the originating website) in was described in the previous chapters of fact sold the concept that if the recipient of the message can trust a third-party ( in this study. this case Verisign) who in turn vouches The external process, that of integrating for the originator of the message, then the rm with its external stakeholders a transaction can occur between the and a rational process of developing a originator and the recipient. Verisign, unied approach to both processes will through its own credibility, provides the be discussed in the proceeding chapters. element of trust that enables other to transact in condence.

competencies. Networks exist because of their capacity to generate, integrate, and leverage knowledge and relationships that extend considerably beyond the resources of a sole rm. If communication is present, then each individual rm in a network can learn from the others in order to properly integrate and leverage unique assets and resources.

External perceptions:

Anderson, Hakansson, and Johanson (1994) have discussed the concept of network identity, which they dene as the perceived attractiveness (or repulsiveness) of a rm as an exchange partner due to its unique set of connected relations with other rms, links to their activities, and ties with their resources. In other words, the rm must possess something that makes it warrant inclusion in the network. Network identity, then, is similar to a rms expertise or competence in a particular area. It is logical that this identity stems from the perception that a rm is attractive in some way, and that it has something to offer. A rms inclusion in the network places itself in a web of trust with other players in the market. An essential component of the structure of a message is the embodiment of trust in that message. If the recipient of the message does not trust either the originator or the messenger, the message will have no value - i.e., the message is not believed.
Aruna Kulatunga - BCO Assignment

In most of the modern theories of business, competition is seen as one of the key forces that keep rms lean and drive innovation. That emphasis has been challenged by Adam Brandenburger However, Communication is an of the Harvard Business School and antecedent of trust. To be metaphorical Barry Nalebuff of the Yale School of in prose, to weave the web of trust, a Management. In part using some of the cocoon of communication has to be ideas of game theory, they suggest that used. Within the rm, when trust is businesses can gain advantage by means high, communication is more effective of a judicious mixture of competition and because dialogue is more open and cooperation. credibility is built up. On the other hand, Cooperation with suppliers, customers when it is low, there is an increasing and rms producing complementary or tendency to resort to imposing authority related products can lead to expansion by management on employees. of the market and the formation of new Morgan and Hunt (1994) proposed the business relationships, perhaps even link between communication and trust the creation of new forms of enterprise. in a business-to-business relationship- Specically, when companies work marketing context. The linkages together, they can create a much larger between these constructs should be and more valuable market than they present in a network environment as ever could by working individually. well. In fact, communication becomes Companies then compete with each even more essential in relationships other to determine who gets the largest involving more than two parties; it is share of that market. Brandenburger and the key to coordinating each rms Nalebuff chose the word coopetition unique skills and resources. In addition, for this concept (a blend of cooperation effective communication leads to the and competition), which they used as the benet of organizations being able to title of their 1996 book explaining their learn from their exchange partners core theories. (Brandenburger and Nalebuff.
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Communication: Core of the Firm

1996) However, it seems that they did not coin the word: it was Ray Noorda, the founder of Novell, who did that. Co-opetition allows for the real-world business situation where there can be multiple winners in the marketplace. Business, unlike war, is not a winner takes all proposition. The objective is to maximize your return on investment - regardless of how well or how poorly other people or other companies perform.

dimensions where each component has its own different characteristics. Leadership for example devolves ownership to the process level, (i.e. individuals involved in the process takes on leadership roles even though there may not be a direct economic or business ownership at that level) while most instances of change inuences the economic or business ownership where the benets of change accrues more directly to those who own the corporation. Leadership (whether it

communication processes that take place. As illustrated in gure 3, leadership and the processes that involve leadership is enveloped in what can be termed Language of opportunities, a concept originating from the work of Werner Erhard, former head of est (note: est is not capitalized). (Wruck et al.,1998). Heracleous (2002)contends the language of opportunities involve a discourse amongst the members of the organization, seeking ways and means

To win trust, Language of Opportunity acceptance; to become a member of the network and to weave the web of trust, the rm needs to employ specic tools. Building on the preceding chapters of this study, the author suggests that one specic tool that can be used is a somewhat nebulous, yet achievable, concept termed the Language of Opportunities. The original model for this concept was is in change, management, command or developed from a leadership perspective, control) is multi-hued, varied, and open i.e., from the concept of change being for different interpretations. As much as led. However, the model can be adopted concepts of leadership follow different directly to the current discussion by threads, in the contemporary business looking at Leadership as part of change environment, the canvas on which we and change being central to the Firm. paint our picture, the key considerations

Figure 3

The Division of Change

of tting into an overall vision or the great dream(Senge,1994) as opposed to the simple notion of communication, i.e. a linear ow of information from one direction to another, or even bidirectional within the management and the workforce, employed in the concept of leadership are chameleonic. of language of change. Discourse is a In the two areas of inuence in leading collection of communicative actions change, a distinct demarcation can be related to the way of thinking and made in the quality and direction of the acting of members of a particular system
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(Heracleous,2002). Organizations that employ this language of opportunities are inherently learning organizations, which have strong shared visions.

this model can be diffused further into general negotiating practises. A rm is a microcosm organisation which inherently reects the context and conguration of A learning organization continuously the general environment, or society, it tests experiences, transferring that operates in. By extension then, methods into knowledge and that knowledge successfully employed in the Firm could is then made accessible to the entire also be applied, in the same context, organization. (Box et.al., 1999, Senge, across a wider population. 1990) Learning organizations that are Conclusions constantly searching for opportunities have a better chance of succeeding. Business communications is a process, The author agrees with Senge and Box not an end product. It has been said that if that opportunity should be constant there were just three truly golden rules quest and not a search for change in a of modern business they would be, in distressed state. More work has to be done to establish the relevance of the authors model in both academic and practical sense. The authors experiences in negotiating political terms at times of distress in his countrys embattled political landscape suggests that employment of this order: communicate, communicate, and communicate.

instead of making pronouncements and giving orders. What we constantly learn is that the more people practise the art of orchestrating conversations and dialogue and for better or worse, discourse, the more opportunities they nd for it: processing ofce conicts, reviewing and reecting on the past, for evaluations, for making group decisions, even for ofce celebrations. If one agrees with the author in his contention that communication is the bed-rock of a modern Firm, then the next logical step would be to explore the ways and means of applying best practises in communication in an endeavour to successfully leverage any competitive advantage the rm may gain from it. The concept espoused in this study, that of language of opportunities, the author suggests, would be just one of the many tools Firms can employ in seeking the

As more and more leaders shift towards participation and empowerment, they are beginning to learn the Socratic/ Buddhist way of processing information through asking the right questions, Holy Grail of Discourse!

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References

Communication: Core of the Firm

Aaltonen, P. and Ikavalko, H. (2002), Communications Core of the Organisation Message, Climate and Structure: Implementing Strategies Successfully, Integrated Manufacturing Systems Bradford: 13 (6), pp 415. Anderson, J. C., Hakansson, H. and Johanson, J. (1994), Dyadic Business Relationships within a Business Network Context, Journal of Marketing, 58 (1), pp 15. April, K. A. (1999), Leading through Communication, Conversation and Dialogue, Leadership & Organization Development Journal, 20 (5), pp 231-41. Armenakis, A. A. and Bedeian, A. G. (1999), Organizational Change: A Review of Theory and Research in the 1990s, Journal of Management, 25, pp 293-315. Barrett, D. J. (2002), Change Communication, Corporate Communications: An International Journal, 7 (4), pp 219-31. Beer, M. and Nohria, N. (2000), Cracking the Code of Change. Harvard Business Review, May-June, pp 133-41. Box, T. M., Todd, A. W., Watts, C. R. and Whisman, M. L. (1999), Learning Organisations, Panacea or Practical Answer, Academy of Strategic and organisational leadership, 3 (2), pp 54. Brandenburger, A. and Nalebuff, B. (1998), Coo petition (1st Currency paperback), Doubleday, New York Buchanan, D. and Boddy, D. (1992), The Expertise of Change Agent: Public Performance and Backstage Activity, Prentice Hall International Series. Cushman, D. P. and King, S. S. (1995), Communicating Organizational Change: A Management Perspective State University of New York Press, Albany. Viii, 334 p.; Drucker, P. F. (2001), The Essential Drucker: Selections from the Management Works of Peter F. Drucker (1st), Harper Business, New York. X, 358 Heracleous, L. (2002), The Contribution of a Discursive View to Understanding and Managing Organisation Change, Strategic Change, Aug, pp 253-61. Kotter, J. P., and Netlibrary Inc. (1996), Harvard Business School Press, Boston, Mass. Lewin, K. (1951), Field Theory in Social Science Harper & Row, New York Mintzberg, H., Ahlstrand, B. W. and Lampel, J. (1998), Strategy Safari: A Guided Tour through the Wilds of Strategic Management Prentice Hall, London. X, 406 Morgan, R. and Hunt, S. (1994), The Commitment-Trust Theory of Relationship Marketing, Journal of Marketing, 58 (3), pp 20-38. Nadler, D. A. and Nadler, M. B. (1998), Champions of Change Jossey-Bass, San Francisco Pettigrew, A. M. (1987), The Management of Strategic Change Basil Blackwell, Oxford. [300] Quirke, B. (Fall / Winter 1998), Communicating Corporate Change, Human Resource Management, 37 (3 & 4), pp 31920. Robbins, S. (2002), Organisational Behaviour, 10th Edition Prentice Hall International, Inc., New Jersey. Sartre, J. P. and Frechtman, B. (1948), The Emotions: Outline of a Theory Philosophical Library, New York. 94 Semler, R. (1993), Maverick! - The Success Story behind the Worlds Most Unusual Workplace Century - Random House, London Semler, R. (2003), The Seven-Day Weekend - Finding the Work/Life Balance Century - Random House, London Senge, P. M. (1990), The Fifth Discipline: The Art and Practice of the Learning Organization (1st), Doubleday/Currency, New York. Viii, [424] p. Senge, P. M. (1994), The Fifth Discipline Fieldbook: Strategies and Tools for Building a Learning Organization Currency, New York. Xiii, 593 p. Watkins, K. E. and Marsick, V. J. (1993), Sculpting the Learning Organization: Lessons in the Art and Science of Systemic Change Jossey-Bass Publishers, San Francisco, CA. Wruck, K. H. and Eastley, M. F. (1998), Landmark Education Corporation - Selling a Paradigm Shift, Harvard Business School Case Studies, 9-898-081 Figure 1: - Strategic Communications Model. Barrett, D. J. (2002) Figures 2 & 3: Kulatunga A, 2004.
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Communication: Core of the Firm

Aruna Kulatunga - Business Communications Prepared for Dr. Lynne Bennington

11 June 2004