Impact of Electronic Communication on Efficiency of an Organization (A Case Study of Zenith Bank Plc)
Purpose of the study
The purpose of the study was to determine the impact of electronic communication on the performance of Banking sector (Banks) in Lagos state.
This research sought to achieve the following objectives.
- To establish the influence of modes of communication on performance of Banking industry in Lagos state.
- To assess the extent in which use of electronic in communication influence performance of Banking industry in Lagos state.
- To determine the relationship of member training in communication and performance of Banking industry in Lagos state.
- To establish how Banking industry in Lagos state internal communication procedures influence their overall Performance.
This chapter presents literature related to communication and organizational performance; it also outlined various communication practices used by organizations and their influence on organization performance, theoretical and conceptual framework.
The concept of communication and organizational performance
Organizations can be seen as open social systems (Katz and Kahn, 1978) in which all of the components of the unit or system are interactive and interdependent (Goldhaber, 1986 in Fill, 2006). Modifying one part of a system and adjustments are made by all other components to accommodate change (Fill, 2006).According to Rajhans (2012) organizational communication has become far more complex and varied yet it is an important factor in overall organizational success and functioning. The way an organization communicates is reflected in morale, motivation and performance of its employees (Rahjans 2012).
Communication takes place in every level of organization hence it is the most dominant activity that an organizational carries. Fundamentally, communication touches every aspect of organizations in that they are able to promote their products, educate their customers and make sales. Udegbe (2012) further points out that communication is needed in organizations to exchange information, exchange opinions, make plans and proposals, reach agreements, execute decisions, sending and fulfilling orders among other key organizational activities. Indeed when communication stops, organized and coordinated activity ceases and individuals return to dysfunctional distinct activities.
According to Kotler (2006) communication is the means by which firms attempt to persuade, inform and remind customers directly or indirectly about the products and brands which they sell. As such, communication is a “voice” of the brand and it is means by which it can establish dialogue and relationships with customers. Miller (2009) views an organization as containing five critical factors, namely existence of a social collectivity, individual and organizational goals, coordinating activity, organizational structure and the embedding of the organization within environment of other organizations. In all these factors, communication plays a central role in intersection and advancement of both organizational and individual goals so that the individual and the organization work together in fulfillment of these goals. It is also important in bringing people together in an organization and creating relationships that are beneficial at all levels in the organizational structure and most importantly, relationships between the organization and other organizations, publics and stakeholders within its environment. We can therefore critically say that communication is the coordinating activity which helps interconnect all other activities in an organization. Communication is not just about sending simple messages to one or more receivers whose feedback is expected, it is about the intricate networks through which computers link to each other. It is the creation of meaning systems in families. Communication is about understanding a market segment to enhance persuasion and increase sales (Miller, 2009).
For organizations to perform optimally and realize the set goals and objectives, all stakeholders must exploit existing relationships within and without the organization. This is made possible by the amount of information that is exchanged at various levels. Fill(2006) while introducing relational communication theory, states that in an organization, communication events occur within a context or particular set of circumstances which not only influence the form of communication but also the nature and the way the communication is received and acted upon.. He further identifies four main contextual levels which are interpersonal, group, organizational and mass communication which forms part of a hierarchy whereby higher levels incorporate lower levels but add something new of their own (Fill, 2006). For example, where a manager has employees and assigns them a task which they must complete within set timelines (higher level to lower level communication), employees discuss the task among themselves and come up with a new and efficient means of accomplishing the task (interpersonal/group communication) and then revert to the manager with new information and a completed task (lower level to higher level communication).
Quoting Taylor and Altman (1987), Fill (2006) states that social penetration is an important aspect of relational communicational theory. Through disclosure of increasing amounts of information, about themselves, partners in a relationship (personal or organizational) develop levels of intimacy that serve to build interpersonal (inter organizational) relationships. The relationship moves forward as partners (organizations) reveal successive layers of information about each other, and as greater or breadth of information is shared, confidence grows. Fill concludes that this aspect of relational communication theory lies at the foundation of the development of trust, commitment and relational exchanges between organizations (Fill, 2006).
Therefore communication is important in persuading, moving, and convincing priority audiences and constituents to help an organization achieve its mission. How an organization articulates its mission, vision, values and desired outcomes determines whom it attracts as customers, employees and also whether it can leverage resources to achieve organization’s mission. All these factors lead to higher organization performance.
Patterson and Radtke (2009) further highlights benefits of communication in an organization especially when put in a strategic framework. These benefits include setting priorities and clarifying future direction. As communication becomes integrated, staff members will approach their work in a new way routinely asking “whom are we trying to reach, what do we want them to do and how will we know if we have succeeded. The board members will have a framework for assessing the progress of the organization and determining how to integrate their efforts into organization’s work. Communication also improves performance and stimulates creative thinking. When everyone on the staff and board understands why certain audiences are important and what actions the organization wants from those audiences, it is easier to focus planning and creativity on common objectives.
Communication helps build team work and expertise. When an organization highlights the synergy of communication activity with all aspects of its work, the staffs begin to share information in new ways. They look for ways to set priorities, coordinate resource allocation and improve internal communication. It also helps organizations use limited resources effectively. By setting clear consistent messages and determining priority audiences and dissemination strategies in advance of launching projects, staff members can maximize opportunities to combine messages and use certain communication vehicles with multiple audiences. For example while considering the value of investment against desired impact may encourage an organization to issue a straightforward financial report instead of spending scarce communication resources on a glossy annual report (Patterson and Radtke, 2009).
A number of important changes and trends have created the need and urge to integrate organizational communication for it to have desired impact and contribution to the overall organization performance. This has also seen the emergence of new forms of communications and media such as social media among other platforms. Today, most organizations are keen on cost cutting measures while at the same time seeking to deliver quality products and services that satisfy their market segment’s needs and wants. Organizations have also seen the need for greater levels of accountability and therefore have to tailor their messages in way that is cost effective yet delivers the message and have a desired impact on intended audiences. It is also important to note that the targeted audience is more informed and have options presented to it by rich information sources widely available to them. Organizations have also developed into more complex decision making units that require strategic communications at every level. This multi- level communication affects how the organization relates with its leadership (board and management) employees, customers, government agencies, other organizations within its industry among other stakeholders (Pelsmacker, 2004).
Pelsmacker (2004) further implies that traditional forms of communication especially mass media are becoming increasingly less effective. This has resulted to communication clutter which leads to increased irritation, and advertising avoidance behavior and to a situation whereby communication especially advertising ) which in traditional, undifferentiated, and impersonalized media is less and less capable of attracting attention let alone convincing consumers. The same also happens when organization communicates internally using traditional communication forms such as pinned notices, memos and letters, which barely gets noticed by their intended audiences.
The need for integrated marketing strategies influencing behavior to drive the need for organizational products and services directly has further eroded the attractiveness of traditional mass media such as television, radio, magazines and newspapers. Using more and more channels and tools to reach the consumer effectively increases the need for integration of these tools (Pelsmacker, 2004).
This chapter presents the research methodology applied in carrying out the research study. It also describes the research design, population of the study, sample size, the sampling procedure, data collection instruments, validity and reliability, and data analysis techniques and ethical considerations.
According to Mugenda (2008) research design refers to overall conception of the study including description of all concepts, variables and categories, the relational propositions and the methods of data collection and analysis. It also refers to the process that the investigator will follow from inception to completion of the study. The researcher used descriptive correlation survey design which involves collecting information by interviewing or administering questionnaires hence suitable for extensive research. It is an excellent vehicle for the measurement of characteristics of a large population (Orodho, 2003).
According to Mugenda (2008) it is also concerned with assessing relationships among variables. It is based on the premise that if a statistically significant relationship exists between two variables, then it is possible to predict one variable using the information available on another variable. It is also useful in obtaining information concerning current status of phenomena and describes what exists with respect to variables or conditions in a situation (Koul, 1984). This design enabled the researcher to collect in depth information about the population being studied and also helped him analytically explain findings based on variables.
Nachmias and Nachmias (1976) describe population as an aggregate of all cases that conform to some set of specifications. Sapford (2007) further defines population as the entire set about which we wish to make generalizations. This study targeted 5,966 active members and 20 staff of Zenith Bank PLC.
DATA ANALYSIS, PRESENTATION AND INTERPRETATION
Subsequently, it was noted that majority of members (49.8%) had been members of Zenith Bank PLC for less than five years. This can be attributed to job insecurity in the non- governmental organizations sector as most members tend to withdraw from the Bank upon termination of their contracts. The sector has been vibrant in the last five years which led to numerous NGOs and aid agencies being formed to implement projects across the country and thus constantly employed staff who in turn joined the Bank. Table 4.4 shows membership duration distribution.
DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS
This chapter presents a summary of key findings, a comparative discussion and conclusions based on research objectives. The chapter concludes with recommendations of the study and suggestions for further research in areas of communication and organization performance.
Discussion of the findings
The study revealed that modes of communication used by Banking industry indeed influenced their organization performance. The study assessed the frequency, the modes of communication and communication material distributed by Zenith Bank PLC to its members. Although 42% of the respondents stated that the Bank communicated to them regularly, majority of the respondents felt otherwise which indicates that Zenith Bank needs to improve its frequency of communication to its members. This was reaffirmed by 36% who recommended that Zenith Bank ought to be updating members regularly on a later inquiry in the study.
On modes of communication 85% of the respondents alluded that they received most of their communication from the Zenith Bank through email. This was not surprising noting that the Bank had made significant investment on email platform as alluded earlier in the study to enhance this mode of communication. The findings agree with the Banks annual report which showed that upon significant investment on email and other modes of communication such as social media platforms there was reduced members’ discontent, increased product patronage and increase in revenues by 33% due to easy access of information (Zenith Bank annual report, 2010). However, respondents in a later inquiry recommended that Zenith Bank need to diversify to other modes of communication and reduce its reliance on emails. This is because the nature of jobs of the respondents meant that they are mostly in the field with limited access to emails and they wanted to be updated on the Bank’s affairs all the time. Earlier studies had shown that organizations that employ strategic diversified communication practices such as media, public relations, brand positioning, idea and visibility enabled them to appeal to various stakeholders and audiences hence improving overall organization performance (Kobia, 2011).
The study also revealed that that there is indeed a relationship of member training and increased organization performance. Findings indicate that 92% of respondents overall agreed that training forums were important to create all round member while 74% agreed that training sessions conducted by Zenith Bank PLC increased their product knowledge and uptake. This shows that training and increasing members’ knowledge increased product patronage and subsequently profitability to the Bank. These findings reaffirm earlier studies done by the then Ministry of Banks and Marketing Development (MOCDM) which stated the need for sustained member education to address challenges and help members understand products, policies and need for higher capitalization which directly affect funding and performance of Banks (MOCDM, 2010). In addition, an article published at Zenith Bank News, July-September,2012 had demonstrated that member training played a key role in marketing, resource mobilization and also enabled members to network, communicate, exchange ideas leading to overall growth of the Bank (Zenith Bank News, July-September,2012).
The study also investigated Zenith Bank PLC.’s use of technology in communication. The researcher probed members’ interaction with the Bank’s website and social media platforms. Findings revealed that Zenith Bank members interacted with the Bank’s website relatively well and frequently. About 37% of the respondents interacted with the website weekly while 47% did it on a monthly basis. This shows that Zenith Bank members are keen on obtaining regular and updated information from their Bank to help them make informed decisions on their investments.
Subsequently, findings revealed that overall majority of Zenith Bank members (75% agreement) rated the Bank’s website as good in terms of relevant information, friendly features, appeal and aesthetics and marketing function. This indicated that members were able to easily navigate through the website pages and obtain information they were seeking. This is positive as it enhances product knowledge and uptake hence increased profits for the Bank. The findings assert Kobia, (2011) who states that Banks that have been quick to embrace technology have exploited numerous business opportunities, by providing and showcasing innovative products. They have also enhanced transparency and proper reporting by enabling members to access information more easily (Kobia, 2011).
However the study revealed that majority of respondents (79%) were unaware of Zenith Bank PLC.’s presence in the social media platforms of Twitter and Facebook and did not use them to communicate to its members. Earlier in the study, Pelsmacker (2004) had indicated that traditional forms of communication especially mass media were becoming less effective and there was need for organizations to use more integrated channels and tools including social media to reach the consumer more effectively. This point out that Zenith Bank could be missing on marketing opportunities presented by social media especially when millions of Nigerians access social media through their mobile phones on daily basis.
On internal communication practices, the study revealed that Zenith Bank staff strongly agreed that internal communication contribute to the Bank’s performance and profitability as evidenced by a strong mean of 1.6 and a standard deviation of 0.503 with no skewness. This finding supported observations made by Appleby (1994), where he stated that employee/employer communication is a critical component of management and has a direct impact on overall organizational performance. However the study found out that there were inadequacies in communication flow and openness between staff and their supervisors as evidenced by a mean of 2.5 and a high standard deviation of 1.051.
Staff largely stated that, they received information from colleagues on management actions, accomplishments and failures before hearing them from their supervisors. In addition, there seemed to some extent of disagreement that internal communication practices resulted into higher employee engagement as evidenced by a mean of 2.25 and a standard deviation of 0.851. The lack of openness and trust between staff and their supervisors could be detrimental to staff productivity and contribute to low organization performance.
The study further revealed that majority of staff (100%) stated that their supervisors communicated to them via telephone and not face to face .This can explain why employees said that there is lack of openness, as low level of staff engagement and low quality and amount of information that staff receive to help them contribute towards the strategy and goals of the organization. Rabinowitz (2013) states that, good internal communication will flourish if you create an organizational climate of openness that is conducive to the free flow of communication and information in all directions within the organization.
Conclusions of the study
From the data analysis, it is evident that communication practices employed by Banking industry indeed influence their organizational performance. The mode and frequency of communication by Zenith Bank PLC to its members, helped members keep up with the Bank affairs and make key investment decisions such as increase their deposit contributions and loans uptake leading to profitability of the Bank.
Member’s training contributes to organizational performance of Banking industry. It is through training that the Zenith Bank communicates about its products, services and policies to members. Indeed members were able to increase their investments after training and therefore leading to growth of the Bank. Additionally, modern communication technologies play an important role in not only to the Zenith Bank’s role of disseminating information to members, but also creating awareness about its products and services to the wider audience. Therefore Zenith Bank needs to fully exploit all opportunities available in communication technology and digital space.
Lastly, there exist a relationship between internal communication and organization performance. Better communication synergies between employees and their supervisors lead to better employee engagement and quality flow of information. Employees also feel appreciated by their supervisors and are free to contribute ideas that lead to growth of the Bank. This also boosts their morale enabling them serve customers even better. Therefore open communication should be encouraged to foster better working relationships in the work place, where all staff are involved for better team work and organization growth.
This study recommends the following.
- Zenith Bank PLC and indeed all Banking industry should diversify their modes of communication and stop over reliance of usual methods of communication such as emails, notices and others. Members’ needs will keep evolving due easily accessible information, availability of other investment alternatives and increased competition to other players in the finance Therefore, Zenith Bank PLC will need to improve communication dissemination methods and exploit opportunities presented by social media platforms such as Facebook, Twitter, and LinkedIn among others. The Bank will need to be more vibrant in these platforms to market its products and services especially to the youth who dominate the social media.
- To foster better employee communication across the organization, Zenith Bank PLC should adopt an open door policy where junior staff can easily access and engage their supervisors. This will ensure better employee engagement, enable clear information dissemination and build trust between the junior staff and management. Supervisors also need to learn team management and communication skills, encourage their juniors to share thoughts with them without fear of reprisal even where there are divergent opinions.
- To create visibility and market products to its members and the general public, Zenith Bank and indeed all Banking industry will need to utilize mainstream advertising platforms such as radio, television and newspapers. Despite emergence of new media such as digital media, mainstream media still remains relevant in reaching out to mass Well- structured and executed marketing and advertising campaigns in these media will go a long way in market education, creating visibility and drive Zenith Bank’s product uptake.
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