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Communication: Core of the Firm
Aruna Kulatunga - BCO Assignment Page 1 of 8
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 confi guration 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.
“I distrust the incommunicable; it is the source of all violence.” – Jean – Paul Sartre (Sartre and Frechtman,1948)
Why is communications the basis of change?
Beer et.al.(2000), contends that a
central pillar of management of change
is communication. Buchanan and
Boddy (1992), in their matrix of change
includes communications as one of the
fi ve main skills necessary to implement
change. However, a closer study of the
other skills (Setting Goals, Building
Roles, Negotiations and Managing Up)
indicates that the skill to communicate is
interwoven throughout.
Aaltonen and Ikavalko (2002),
states organizations have diffi culties
implementing their strategies specifi cally
when there is a lack of communication,
indicating a lack of commitment
to the strategy, unawareness or
misunderstanding of the strategy,
unaligned organizational systems and
resources, poor coordination and
sharing of responsibilities, inadequate
capabilities, and uncontrollable
environmental factors.
Pettigrew’s (1987) framework for
strategic change also sheds some light on
the analysis of strategy implementation.
Pettigrew distinguishes the content
of the strategy, the outer and inner
contexts of an organization, and the
process in which strategic change is
carried out. Pettigrew contends that the
content, the context, and the processes
are intertwined and affect one another.
This has an important impact on strategy
implementation research. In order to
understand implementation, which
is close to the process in Pettigrew’s
model, the content of strategy and the
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
Socrates, 2,400 years ago, and his use
of conversation as a method for seeking
deeper understanding; a way of seeking
the rock bottom truth in what was being
discussed. He taught Western Civilisation
the art of asking questions as a tool for
discovering reality. For Socrates, ``the
unexamined life is not worth living’’.
and constant change.
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.
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 confi guration theory looks at the
and constant change.
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.
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.”
“The unexamined
life is not worth living’’
- Socrates
Communication: Core of the Firm
Aruna Kulatunga - BCO Assignment Page 2 of 8
Interestingly, two centuries before
Socrates, Gauthama Buddha, taught his
followers how to be critical thinkers by
questioning every motive, reason and
move. Lord Buddha’s critical dialogues
with his pupil Ananda forms the bedrock
of the Buddhist philosophy, much in the
vein of Plato’s records of his conversations
with Socrates.
In modern organisations, the in-depth
conversation in the Socratic/Buddhist
mode is coming into its own again.
This is fostered through the creation
of continuous learning opportunities,
promotion of inquiry and dialogue,
encouragement of collaboration and
team learning, empowerment of people
towards a collective vision, and the
establishment of systems to capture and
share learning (Watkins and Marsick,
1993).
A defi nition of change and communicating the message:
Change inherently assumes progression
from one state to another and therefore
leads to “negative” comparisons of
the former state, which in turn impact
the stakeholders of that state, who by
nature will react defensively, creating
barriers against the new state. Cushman
and King (1995), posits that effective
communications can change these
barriers.
Armenakis and Bedeian (1999), in
illustrating the importance of creating
a readiness for change argues that the
“discrepancy aspect of the message
“Producing intentional change, then, is a matter of
deliberately creating, through communication and
conversation, a new reality or set of social structures. If this
is the case, then the change process actually occurs within,
and is driven by, conversation and communication, rather
than the reverse. In fact, I would argue that the vocabulary
spoken in organisations can trap us into a particular way
of thinking about our roles and relationships, because
there is a distortion of reality and loss of capacity for
spontaneous action.” (Kurt April 1999)
communicates information about
the need for change and should be
consistent with
the relevant
c o n t e x t u a l
factors”.
Beer et.al.
(2000), also
argues that
shared change,
centred around
the language of
opportunities,
(as opposed to
the language
of change - a concept espoused by
Wruck and Eastley(1998)- rather
than that of change, whilst slower,
spreads commitment through-out the
organization and incrementally re-
enforced, leads to long-term sustainment
of change. Collective leaderships where
members play complementary rules
appear critical in achieving change.
“When people share a vision, they are
connected, bound together by a common
aspiration. In the absence of the great
dream, pettiness prevails.”(Box, Todd,
Watts and Whisman, 1999)
Lewin’s (1951) unfreezing model
for creating readiness for changes is
inherent in Box et.al. (1999) and Senge’s
(1990) contentions of creating a shared
vision. Communication takes place
across boundaries (the author, however,
contends there are no boundaries) and
takes the form of discourse amongst the
members of the organization, seeking
ways and means of fitting into an overall vision
or Senge’s “great dream”.(Senge, 1990)
Armenakis et.al. (1999) quotes Katz &
Kahn to argue that to create a belief that
change is needed requires a comparison
of the current state of the organization
to a desired end-state. Nadler and Nadler
(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 state-
less mode; that of non-comparison.
The author will attempt to build on this
concept in the preceeding chapters.
The priori of Communication
Academic treatments of corporate
strategy, states Quirke (1998), “often omit
Communication: Core of the Firm
Aruna Kulatunga - BCO Assignment Page 3 of 8
any reference to communication as a vital organizational
function. There is an implicit assumption that communication
is simply a rational process of sender and receiver, and it
barely receives mention” Yet communication is the fundamental
means by which strategy is enacted.
Clearly, an argument exists that without effective employee
communication, change is impossible and change management
fails. However, the literature review also suggests that
corporations or fi rms do not apply the same analytical rigor to
employee communications that they give to the fi nancial and
operational components of the Human Resources Development
continuum and its value chain. However, the author suggests
that further empirical study is necessary to establish this
contention, given the paucity of information generally available
on the role of communication in strategy, management and
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 company’s strategy and recognized for its
strategic implications and effects.
Implementation of Theory; an empirical model
Barrett’s (2002) Strategic Communication model (Figure 1)
takes cognizance of this through its inter-related approach
to strategy, management, processes, and communication.
Communication is either everything in the organization (vision,
strategy, business planning, management meetings, information
fl ow, knowledge management, etc.) or it is nothing more than
publications intended to keep the communication staff busy
and the employees informed of the company news. (Barrett,
2002)
Barrett (2002) believes that organizing the ‘’everything’’
approach and dispelling the ‘’publication only’’ focus are fi rst
steps in structuring a strategical communication program.
If management can be coached into realizing that employee
communication is a key ingredient in becoming a high-
performing 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 fi eld; right people in
the right places; and meaningful communications. (Quoted in
Barrett, 2002)
Barret defi nes Meaningful communications as communication
that accomplishes two primary objectives:
Aruna Kulatunga - BCO Assignment
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 fi eld; right people in
the right places; and meaningful communications.
Barrett, 2002)
Barret defi nes Meaningful communications as communication
that accomplishes two primary objectives:
“Transformation is impossible unless hundreds or
thousands of people are willing to help, often to the
point of making short-term sacrifi ces. Employees will not
make sacrifi ces, 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)
Figure 1
Communication: Core of the Firm
Aruna Kulatunga - BCO Assignment Page 4 of 8
° Informs and educates employees at
all levels in the company’s strategy;
and
° Motivates and positions employees
to support the strategy and the
performance goals.
If communication accomplishes both of
these objectives, it is ‘’meaningful,’’ that is,
it contributes to the company’s fi nancial
success and helps the company be high
performing. Barret breaks her defi nition
down more specifi cally, resulting in fi ve
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
company’s new direction;
° Encourage higher performance
and discretionary effort;
° Limit misunderstandings and
rumours that may damage
productivity; and
° Align employees behind the
company’s strategic and overall
performance improvement goals.
Communications at the Core
The following model (fi gure 2) is
a re-adaptation of Barret’s Strategic
Communications Model interweaving
the understanding gained from the
author’s efforts to combine the academic
learnings with some practical experience
as a communicator.
The organisation membrane is a
porous, fl exible boundary that is capable
of both expanding and imploding at the
same time to meet both external and
internal contingencies. The porosity of
the membrane governs its interaction
with the environment. The boundary
is reached only when it encompasses
the organisation’s end-customers and
includes many stakeholders - at times
even competitors. On the other hand,
the membrane can also be termed the
organisation’s coalface, where critical
interactions with its external stakeholders
occur. In a practical sense, the author
contend, given the exogenous infl uences
on the coalface, and the manner in
which organisations employ endogenous
strategies to match or leverage changes
at the coalface, the boundary does not
exist. Shorn of jargon, this simply means
that the boundaries of a fi rm are not fi xed
and will change contextually.
Therefore, innovation occurs at the
coalface and drives the strategy that in
turn constructs the structure in which
management processes take over to spur
individuals / teams to be productive.
Conversely, by adopting the same logic,
it can also be argued that the central core
of the organisation, for it to be productive,
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 fi rm’s coalface.
The membrane also divides two essential
process, one internal, and the other
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Communications at the Core
Communication: Core of the Firm
Aruna Kulatunga - BCO Assignment Page 5 of 8
external, of the firm’s efforts to innovate
and stay ahead of the competition.
The internal process, that of change,
and becoming a learning organisation,
was described in the previous chapters of
this study.
The external process, that of integrating
the firm with its external stakeholders
and a rational process of developing a
unified approach to both processes will
be discussed in the proceeding chapters.
External perceptions:
Anderson, Hakansson, and Johanson
(1994) have discussed the concept of
network identity, which they define
as the perceived attractiveness (or
repulsiveness) of a firm as an exchange
partner due to its unique set of connected
relations with other firms, links to their
activities, and ties with their resources.
In other words, the firm must possess
something that makes it warrant inclusion
in the network. Network identity, then, is
similar to a firm’s expertise or competence
in a particular area. It is logical that this
identity stems from the perception that a
firm is attractive in some way, and that it
has something to offer. A firm’s 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.
This can be illustrated by using the secure
modes of communicating in the Internet.
Verisign, a company that marketed a
method of confirming the identity of the
messenger (or the originating website) in
fact sold the concept that if the recipient
of the message can trust a third-party ( in
this case Verisign) who in turn vouches
for the originator of the message, then
a transaction can occur between the
originator and the recipient. Verisign,
through its own credibility, provides the
element of trust that enables other to
transact in confidence.
However, Communication is an
antecedent of trust. To be metaphorical
in prose, to weave the web of trust, a
cocoon of communication has to be
used. Within the firm, when trust is
high, communication is more effective
because dialogue is more open and
credibility is built up. On the other hand,
when it is low, there is an increasing
tendency to resort to imposing authority
by management on employees.
Morgan and Hunt (1994) proposed the
link between communication and trust
in a business-to-business relationship-
marketing context. The linkages
between these constructs should be
present in a network environment as
well. In fact, communication becomes
even more essential in relationships
involving more than two parties; it is
the key to coordinating each firm’s
unique skills and resources. In addition,
effective communication leads to the
benefit of organizations being able to
learn from their exchange partners’ core
competencies. Networks exist because of
their capacity to generate, integrate, and
leverage knowledge and relationships
that extend considerably beyond the
resources of a sole firm. If communication
is present, then each individual firm in
a network can learn from the others in
order to properly integrate and leverage
unique assets and resources.
In most of the modern theories of
business, competition is seen as one of
the key forces that keep firms lean and
drive innovation. That emphasis has
been challenged by Adam Brandenburger
of the Harvard Business School and
Barry Nalebuff of the Yale School of
Management. In part using some of the
ideas of game theory, they suggest that
businesses can gain advantage by means
of a judicious mixture of competition and
cooperation.
Cooperation with suppliers, customers
and firms producing complementary or
related products can lead to expansion
of the market and the formation of new
business relationships, perhaps even
the creation of new forms of enterprise.
Specifically, when companies work
together, they can create a much larger
and more valuable market than they
ever could by working individually.
Companies then compete with each
other to determine who gets the largest
share of that market. Brandenburger and
Nalebuff chose the word “coopetition“
for this concept (a blend of cooperation
and competition), which they used as the
title of their 1996 book explaining their
theories. (Brandenburger and Nalebuff.
Communication: Core of the Firm
Aruna Kulatunga - BCO Assignment Page 6 of 8
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.
To win trust,
acceptance; to become
a member of the
“network” and to weave
the “web of trust”, the
fi rm needs to employ
specifi c tools. Building
on the preceding
chapters of this study,
the author suggests
that one specifi c tool
that can be used is a
somewhat nebulous,
yet achievable, concept
termed the Language
of Opportunities. The
original model for this concept was
developed from a leadership perspective,
i.e., from the concept of change being
led. However, the model can be adopted
directly to the current discussion by
looking at Leadership as part of change
and change being central to the Firm.
The Division of Change
As illustrated in fi gure 3, leading
change can be divided into two distinct
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
infl uences the economic or business
ownership where the benefi ts of change
accrues more directly to those who own
the corporation. Leadership (whether it
is in change, management, command or
control) is multi-hued, varied, and open
for different interpretations. As much as
concepts of leadership follow different
threads, in the contemporary business
environment, the canvas on which we
paint our picture, the key considerations
of leadership are chameleonic.
In the two areas of infl uence in leading
change, a distinct demarcation can be
made in the quality and direction of the
communication processes that take place.
As illustrated in fi 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
of fi tting into an overall vision or the
“great dream”(Senge,1994) as opposed
to the simple notion of communication,
i.e. a linear fl ow of information from
one direction to another, or even bi-
directional within the management and
the workforce, employed in the concept
of language of change. Discourse is a
collection of communicative actions
related to the way of thinking and
acting of members of a particular system
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Figure 3
Language of Opportunity
Communication: Core of the Firm
Aruna Kulatunga - BCO Assignment Page 7 of 8
(Heracleous,2002). Organizations that
employ this language of opportunities
are inherently learning organizations,
which have strong shared visions.
A learning organization continuously
tests experiences, transferring that
into knowledge and that knowledge
is then made accessible to the entire
organization. (Box et.al., 1999, Senge,
1990) Learning organizations that are
constantly searching for opportunities
have a better chance of succeeding.
The author agrees with Senge and Box
that opportunity should be constant
quest and not a search for change in a
distressed state.
More work has to be done to establish
the relevance of the author’s model
in both academic and practical sense.
The author’s experiences in negotiating
political terms at times of distress
in his country’s embattled political
landscape suggests that employment of
this model can be diffused further into
general negotiating practises. A firm is a
microcosm organisation which inherently
reflects the context and configuration of
the general environment, or society, it
operates in. By extension then, methods
successfully employed in the Firm could
also be applied, in the same context,
across a wider population.
Conclusions
Business communications is a process,
not an end product. It has been said that if
there were just three truly “golden rules”
of modern business they would be, in
this order: communicate, communicate,
and communicate.
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,
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 find for it:
processing office conflicts, reviewing and
reflecting on the past, for evaluations, for
making group decisions, even for office
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 firm 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
Holy Grail of Discourse!
Communication: Core of the Firm
Aruna Kulatunga - BCO Assignment Page 8 of 8
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Figure 1: - Strategic Communications Model. Barrett, D. J. (2002)
Figures 2 & 3: Kulatunga A, 2004.
Communication: Core of the Firm
Aruna Kulatunga - Business CommunicationsPrepared for Dr. Lynne Bennington
11 June 2004
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