The Importance Of Communication In Businesses

COMMUNICATION IN BUSINESS By Course Name Professor’s Name University City, State Date of Submission Introduction Effective communication is important in every business. Through effective communication, businesses are able to deliver their messages to the client when marketing their products, or to other businesses when negotiating mergers and so on. Proper communication methods are vital in different circumstances. Similarly, communication within the business is also necessary since it helps create good relationships among the workers and the managers (Guffey and Almonte 2009, pg. 5). There are a variety of communication methods which organizations can use to effectively deliver their message. These methods include written, nonverbal and verbal communication (Sehgal 2008, pg. 38). Choosing the method of communication depends on the audience, type of message and the effectiveness of the method. Verbal communication requires individuals to be well experienced in delivering messages. Over the years, organizations have employed professional communicators to effectively deliver their message to the public. Such communicators develop such skills either through experience or practice. Effective communication has proven useful in businesses by helping companies to resolve issues and market their products. On the other hand, the lack of effective communication can also prove to be devastating for organizations. This essay aims at discussing the importance of communication in businesses and the Wells Fargo scandal. Wells Fargo Fraud Scandal On the 8th of September 2016, Wells Fargo was on the accused of creating fraudulent accounts by the Los Angeles City Attorney, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau. The case rose from the fraudulent bank accounts created by the company’s employees under the names of pre-existing customers. In fact, the employees created new credit cards for over two million customers without the consent of the customers. As a result, Wells Fargo was fined $185 million which triggered the firing of more than five thousand employees (Blake 2016). The sales program that had initially been started by the company was believed to have led to the scandal. The program was initiated by the company’s CEO John Stumpf. The program required every employee to ensure that they convince at least one customer to acquire eight products offered by Wells Fargo. The strictness of the program forced employees to open up fake accounts and sign up new credit cards so as to achieve the targets demanded. The bank has a large reputation in the United States with current assets summing up to $1.75 trillion. Wells Fargo’s reputation depended upon its actions after the discovery of the scandal since it greatly valued its customers and shareholders. The first action taken by the bank was to communicate to their stakeholders and the public informing them that the company was addressing the situation. This action assured the customers and the general public that the company had control over the situation and that they were willing to be transparent about it. The second action taken by the bank was to fire 5300 employees who were suspected to be involved in the fraud. The third action was to reconstruct the management and policies that governed the organization. The reconstruction was necessary to limit such fraudulent actions from taking place again. The action taken by the company to change its policies and management was well communicated to the public to assure them that they were taking actions towards resolving the issue. Wells Fargo then conducted an analytical survey which was done by cg42. The survey entailed gathering information from the company’s customers and the general public regarding their opinions about the company before and after the occurrence of the fraud. The survey reviewed 500 customers from the top ten retail banks in the United States and 1000 primary customers of Wells Fargo bank. The importance of the survey was to determine the public’s view on the bank’s reputation and the likelihood of customers switching to other banks. Lastly, the bank then went ahead to address the change in attitude from the customers and the general public. This task has proven to be the most difficult for most organizations after a crisis. Nonetheless, Wells Fargo still focused on their agenda to change the company’s reputation. Thanks to the professional public relation team that the company had, Wells Fargo was able to strongly tend to the crisis despite the negative display from the media. The crisis at Wells Fargo proved the different ways in which the employees perceived the information regarding the program. The overall aim of the program was to increase company sales by convincing customers to buy more products. As a means of encouraging the workers to buy more products, the company decided to offer incentives to the employees for every successful product sold. However, some employees saw the program as an opportunity to gain more money from the incentives rather than helping the company make more sale. There are various factors that might lead to the difference in perceptions. These factors include cultural background, psychological state, and attitudes (Management Communication n.d. pg. 104). The difference in perception led to some employees into opening up fake accounts while others were working hard to achieve the same goals but in an ethical manner. Despite that, Wells Fargo’s actions after the accusations showed how prepared their public speaking team was in handling a crisis. Effective communication played an important role in handling the Wells Fargo scandal. Upon the discovery of the scandal, Wells Fargo communicated the issue to the public through their social media, press releases and television assuring them that they had control over the situation. This showed the importance of the methods of communication in businesses. The verbal method of communication entails conveying the message through speeches and interviews. In this case, Wells Fargo communicated to the public through interviews and speeches on television. The other method of communication used by Wells Fargo was written communication. This type of communication involved the use of social media, and press releases to convey their message regarding the scandal. The use of these two types of communication was important for Wells Fargo. Reason being, they both rely on the eight essential elements of communication which include source, receiver, message, channel, receiver, feedback, context and interference (Management Communication n.d. ...