HRM >
Communication and Employee Relations
COVERS ALL MAJOR EXAM BOARDS
Teaching Business
Communication Channels
A clear guide to communication channels, covering formal, informal, vertical, horizontal and digital communication.
9
Created by an experienced Head of Business and examiner
_edited.png){kind=small}
AQA | Edexcel | Cambridge | Eduqas | WJEC | OCR | GCSE
KEY POINTS
Communication channels are the routes used to pass information within a business.
Channels may be formal or informal, vertical or horizontal, written, verbal or digital.
Good communication can improve coordination, motivation and decision-making.
Poor channel choice can create delay, misunderstanding and resistance.
KEY DEFINITION
Communication channel
A communication channel is the route or method used to send information between people or groups in a business.
Main Explanation
Communication channels are the routes used to pass information between people, teams and levels of hierarchy. They include face-to-face meetings, briefings, email, reports, messaging platforms, phone calls and informal conversations. The key issue for A Level Business is not naming channels, but judging which channel is most appropriate for the message, audience and situation.
Different channels have different strengths. Face-to-face communication is useful when the message is complex, sensitive or likely to create questions, because it allows immediate feedback and helps managers judge reactions. Written communication is useful when a record is needed, when the audience is large or when detailed information must be checked later. Digital updates can be fast and efficient, especially across different locations, but may be less effective if the message needs discussion or reassurance.
The choice of channel affects understanding, motivation and coordination. Poor channel choice can create delays, rumours, misunderstanding or resistance to change. For example, announcing a major restructuring by a short email may feel impersonal and increase anxiety, while using a long meeting for a simple routine update may waste time. Communication is therefore linked to leadership, culture and employee relations as well as operational efficiency.
Effective communication also depends on direction and feedback. Downward communication passes instructions or information from managers to employees. Upward communication allows employees to raise issues or ideas. Horizontal communication supports coordination between departments. Two-way communication is often more effective for complex change because it allows clarification, involvement and problem-solving.
Strong evaluation considers barriers such as noise, jargon, information overload, poor timing, lack of trust and differences between formal and informal communication. The best channel depends on urgency, complexity, confidentiality, audience size, location and the need for feedback. A strong answer should explain why a channel fits the context, not simply claim that one method is always best.
✎ EXAMINER TIP
Avoid writing that one channel is always best. Judge the suitability of the channel for the message, audience and need for feedback.
KEY FORMULAS(s)
Profit and Profitability Formulas
These key formulas help you calculate different profit measures and profitability ratios used in business.
Gross Profit
Gross profit = Revenue − Cost of sales
The profit made after deducting direct costs.
!
Remember: profit shows how much money has been made, while profitability shows how efficiently revenue is being turned into profit.
DATA TABLE
Income Statement for North Coast Coffee Ltd
This statement shows how revenue is converted into gross profit, operating profit and net profit.
Revenue
£250,000
Output
Fixed Costs
Variable Costs
Total Costs
Revenue
Profit / Loss
0 candles £1,200 £0 £1,200 £0 -£1,200
Net profit is the final profit remaining after all costs and expenses have been deducted from revenue.
WORKED EXAMPLE
Worked Example: North Coast Coffee
How many coffees must be sold to break even?
Fixed Costs
£1,800
equity + long-term debt
Break-even output = Fixed costs ÷ Contribution per unit
Contribution per unit = Selling price − Variable cost
£3.50 − £1.10 = £2.40
1
Step 1: Calculate contribution
£3.50 − £1.10 = £2.40
Contribution per unit is the amount each coffee contributes towards fixed costs.
BREAK-EVEN OUTPUT:
750 coffees per month
EXAM TIP
Always explain what the number means for the business. Do not just calculate the break-even point.
Communication Channels: Choosing the Right Route
This diagram shows how managers choose communication channels based on urgency, complexity, audience and feedback needs.
APPLICATION
John Lewis Partnership
John Lewis Partnership is a useful context for communication channels because it has a large workforce across shops, head office, distribution and online operations. Different messages require different channels. A routine update about opening times or a policy reminder may be suitable for email, intranet or a digital briefing. However, a complex change affecting roles, stores or working practices may need face-to-face meetings, manager briefings or two-way discussion so employees can ask questions and raise concerns.
The employee-owned structure also makes communication especially important. Partners are more likely to expect explanation, involvement and transparency, rather than simply being told about decisions after they have been made. If senior managers choose a one-way channel for a sensitive issue, employees may feel ignored and rumours may spread. On the other hand, using meetings for every simple update would be slow and inefficient.
The judgement is that the best communication channel depends on urgency, complexity, audience size and the need for feedback. A strong answer should avoid saying that one channel is always best; it should explain why a specific channel fits the message and the people receiving it.
This independent educational case study is not affiliated with, endorsed by or sponsored by Greggs plc. Any financial figures used alongside this example should be treated as simplified or hypothetical estimates created for teaching purposes.
_edited.png)
ANALYSIS
EXAM FOCUS
Analysis questions require you to examine a business concept or issue in detail, breaking it down into its component parts. You should explain how and why something happens and consider its impact on the business.
How to Approach Analysis Questions
1
Identify the key issue or concept
2
Break it down
3
Explain how and why
4
Reach a reasoned conclusion
Read the question carefully and highlight the focus of the analysis.
Consider the different factors, causes or impacts related to the issue.
Provide clear explanations using business terms and links points to context.
Evaluate the overall implications for the business.
Example Analysis Question
North Coast Coffee is considering using break-even analysis before opening a second café.
Advantages
• Sales forecasts may be inaccurate.
• Assumes costs and revenue remain constant.
• External factors may reduce reliability.
• Ignores qualitative business factors.
Disadvantages
• Sales forecasts may be inaccurate.
• Assumes costs and revenue remain constant.
• External factors may reduce reliability.
• Ignores qualitative business factors.
Key Exam Tip
If you find it difficult to expand your answer and show the type of depth that an examiner is looking for in a top response, consider using the 'so what' approach.
Tesco carry out market research - so what? - this allows them to better understand customer needs - so what? as a result Tesco can provide goods more likely to sell - so what? - this will increase Tesco profit and ensure higher levels of customer satisfaction - so what? this means that customers are likely to become more loyal to Tesco.
Avoid These Exam Traps
Students often lose marks on calculation and analysis questions by making these mistakes. Watch out for them in your exam!
1
Helvetica Light is an easy-to-read font, with tall and narrow letters, that works well on almost every site.
Helvetica Light is an easy-to-read font, with tall and narrow letters, that works well on almost every site.
Tip:
Helvetica Light is an easy-to-read font, with tall and narrow letters, that works well on almost every site.
2
Helvetica Light is an easy-to-read font, with tall and narrow letters, that works well on almost every site.
Helvetica Light is an easy-to-read font, with tall and narrow letters, that works well on almost every site.
Tip:
Helvetica Light is an easy-to-read font, with tall and narrow letters, that works well on almost every site.
3
Helvetica Light is an easy-to-read font, with tall and narrow letters, that works well on almost every site.
Helvetica Light is an easy-to-read font, with tall and narrow letters, that works well on almost every site.
Tip:
Helvetica Light is an easy-to-read font, with tall and narrow letters, that works well on almost every site.
Be precise. Read the question carefully. Show your working.
Small mistakes can cost big marks.
EXAM PRACTICE
Practice Question
Apply your knowledge of profit and profitability to answer this exam-style question.
1
MINI CASE STUDY
North Coast Coffee Ltd is a premium coffee business which sells freshly roasted coffee beans through its online store and a small chain of independent cafés. The business has experienced strong sales growth due to increasing demand for high-quality speciality coffee products.
The business generates annual revenue of £250,000. Its cost of sales, including coffee beans, packaging and direct production costs, totals £100,000. North Coast Coffee Ltd also faces operating expenses of £80,000, including marketing, employee wages, rent and administration costs. In addition, the business pays £20,000 in interest and taxation each year.
The owner, Mia Thompson, is reviewing the company’s profitability because rising wage costs and increased competition in the premium coffee market have started to place pressure on operating profit margins. She is considering increasing prices slightly in order to protect profitability while still maintaining customer demand.
.jpg)
2
EXAM QUESTION
Analyse the possible reasons for BrightBite’s falling profit margins and evaluate strategies it could use to improve profitability.
3
HOW TO ANSWER
P
Point
E
Explain
A
Apply
C
Consequence
H
However...
4
MODEL ANSWER
P
Point
Increasing prices could improve the profitability of North Coast Coffee Ltd because each sale would generate a larger amount of revenue and potentially increase profit margins.
5
EXAMINER TIP
For full marks, make sure you analyse causes rather than just listing them, and evaluate realistic strategies with clear judgement. THINK: Which strategy would have the biggest impact and why?
CALCULATOR
THIS TOPIC · POWERPOINT RESOURCE
Communication Channels
CHOOSE YOUR EXAM BOARD:
Product Title
Instant download — school site licence included
-
Fully editable PowerPoint lesson
-
Relevant activities and practice questions
-
School site licence — share with your department
Helvetica Light is an easy-to-read font, with tall and narrow letters, that works well on almost every site.
£3.00
RELATED TOPICS
Continue Learning
Build your understanding by exploring other topics that connect closely with this one.
Profit and Profitability
Learn how to calculate profit and analyse profitability to measure the financial performance of a business.