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 OJBM  Vol.9 No.2 , March 2021
The Effects of Effective Communication on Organizational Performance Based on the Systems Theory
Abstract: Communication is a very crucial and significant element in an organization, and it is necessary for creating collaboration within the work environment that has effects on organizational performance and decision making. This study on effects of effective communications on organizational performance using the systems theory is thus essential. The objectives of this study were to firstly identify the factors affecting effective communication based on the systems theory and secondly to devise a communication model that addresses these factors to improve organisational performance. A quantitative approach was used to describe and analyse data collected for the study from 88 respondents. A questionnaire was used to identify factors affecting effective communication based on systems theory. Descriptive analysis and Pearson’s correlation were used to analyse the results. The results for H1 showed a Pearson correlation coefficient of 0.642 which is statistically insignificant if the (sig. 2-tailed) < 0.05 indicating that there was no statistically significant relationship between management and channel of communication used. However, the results from H2 indicated that there was a relationship between channel of communication used and effective communication with a Pearson correlation coefficient of 0.041 at (sig. 2-tailed) < 0.05. Lastly the correlation results from H3 showed that effective communication has a positive effect on organizational performance at (sig. 2-tailed) < 0.05 indicating a Pearson’s correlation coefficient of 0.012.

1. Introduction

All organizations rely on communication for their basic functioning. Communication is used to transfer information to their audience about the organizations’ mission and vision, policies, and procedures, tasks and duties, and various activities within the company (Farmer, Slater, & Wright, 1998). As simple as communication may look, research has shown that communication can build or destroy an organization’s existence. Therefore, a good communication strategy is essential for a business to survive. Communication acts as a link between decision-makers and all employees. When poorly carried out, communication has been said to cause interpersonal conflict in organizations. What people hear or understand is largely based on experience and background. People have preconceptions about what people are going to say, and if these preconceptions do not fit into their framework of reference, adjustments are made until they do (Baskin et al., 1997).

The term communication is derived from the Latin word, (Communis), which means “to share” (Ezezue, 2008). Consequently, this means sharing would enable one to partake and co-operate hence it is a social activity. However, if there are no common understanding results from the transmission of symbols (verbal or non-verbal), there is no communication (Donnelly, Gibson, & Ivancerich, 1984). Effective communication is strategic for organizational goal achievement. However, ineffective communication in an organization may result in uncertainty, apprehension and dissatisfaction; these result in, poor productivity. It is therefore necessary that managers communicate with employees effectively. The extent to which a manager accomplishes corporate goals depends on his ability to communicate effectively (Herich, 2008). The fact remains that many executives still do not understand what communication is and its role in the success of an enterprise (Nnamseh, 2009).

Effective communication enhances organizational relationship and minimizes strikes and lockouts. Organizational purposes and goals are sometimes defeated when communication is not effective. Wastes and costly mistakes have been made due to gaps in communication. Lack of effective communication is one of the major reasons that can lead to confusion and poor planning in many organizations. This is because communication is the source of information used by managers in making decisions that affect the performance of the organization. A manager’s Communication Skills are vital in not only decision making but transmitting the results and intention of the decisions to other people. In most organizations, managers often concentrate on meeting targets and expect the role of effective communication to come from human resource department. This puts a strain on the free flow of information that assists staff to understand this information. The contribution of employees to jobs is the most important factor for development and excellence in the organization because the fulfillment of necessities in terms of satisfactory and correct information regarding the organization and their roles to be accomplished can enhance performance (Greenberg & Baron, 2008).

According to Booth (1986), the systems theory is more relatable to communication. It recognizes the role that communication plays in helping efficient functioning between the various components of the organizations. In systems theory, the whole determines the character and functions of parts (Waweru, 2002). This means that the main systems are designed into subsystems, making up the whole system, which operates within a larger environment. The systems theory operates from primary principles of inter-relatedness and interdependence, it can be said that the same basic principles form the basis from which communication audit occurs. Every organization has a hierarchical structure with the various sections functioning as a whole structure and all the staff working towards a common goal. The systems theory is therefore appropriate for this study. Given this, the researchers would determine the effects of effective communication on organizational productivity.

Perfect Communication would exist when a thought or idea is transmitted so that the mental picture perceived by the receiver was the same as that envisioned by the sender. Any idea no matter how great is useless until it is transmitted and understood by others. Puth (2002) in his studies argued that the most valuable resources within an entity are the employees and performance in these entities can be improved by way of sharing information regarding policymaking. Therefore, it is the responsibility of managers to encourage the flow of information to enhance the organization’s performance as well as employee productivity. This makes communication very essential for all participants as it integrates most managerial purposes.

Managers have at their disposal various communication tools which when well-balanced and understandable can boost communication. Based on different projects within an organization, employees form teams and groups. Teams and groups use communication to resolve essential problems within those groups. Leaders must empower and support employees to solve problems and to control quality (Fletcher, 1999). They are significant for delegating work and avoiding unnecessary conflicts (Agrawal, 2012).

Concentrating on sound effective communication can be influential in improving the accuracy and speed with which employees perform their tasks, coupled with other developments such as structures that will facilitate the ease of access and flow of communication (Robert et al., 1957). Existing organizational work requires organizations to focus more on effective communication processes since tasks are becoming extra complex due to multicultural work environments. Communication is a central function in organizational performance. Getting the message across effectively and having it understood is a prerequisite to progress. There is no point in moving forward if the basic message is lost, or there are barriers in the process.

It is with this backdrop that a study on the effects of effective communication on organizational performance based on the systems theory is being undertaken. The structure of the research is therefore as follows: literature on effective communication, organizational performance and the systems theory, methodology, results and discussion, conclusion and lastly recommendations for future research.

2. Literature Review

Communication, the heart of business, is the most important of all entrepreneurial skills. An organisation’s ability to transmit information helps both clients and employees feel they can communicate with and ultimately trust the company. Communication is more important today than in previous years partly because the business and market conditions are more complex. The development of a strategic communication strategy and its implementation can provide a number of benefits to organizations, such as keeping employees motivated and engaged, and sharing clear, consistent messages with employees in a timely manner that in turn help with organisational productivity (Charles, 1998).

2.1. Effective Communication within an Organization

Heron (1942) identified certain elements necessary for effective communication. His work outlined goals, attitudes, and criteria for effective communication. Credit is attributed to him for outlining two-way communications between employees and management in the existing organizational communication literature. He suggested that “communication is a line function, a two-way sharing of information. This demands the freedom and opportunity to ask questions, get answers and exchange ideas”. However, Pigors (1949) pointed out that effective communication can only be possible if management and employees collaborate and work together. The findings of his study demonstrated that employees were significantly important to the success of internal communication and internal communication played a great positive role in shaping or moulding employee performance within the organization.

Effective communication can encourage employees to improve their work environment through positive contributions. Antony (2013) conducted a study which examined the impact of effective communication on labour productivity in civil engineering projects at Kampala Central division. A measure of the existing relationship between effective communication and labour productivity, and other explanatory variables included work duration spent in a company, educational qualifications, timely information on changes at work, cooperation at work and adequate training provided to employees. It was discovered that asking for clarity in communication and timely information about changes affecting work are meaningful to labour productivity. Also, to achieve the targeted productivity level, managers should confirm clarity or understanding of instructions, provide enough training to employees, make sure cooperation at work exists by providing incentives and finally, develop a good communication plan for timely information delivery on changes affecting work.

2.2. Organizational Performance

Organizations perform various activities to accomplish their organizational objectives. It is these repeatable activities that utilize processes for the organization to be successful that must be quantified to ascertain the level of performance and for management to make informed decisions on where, if needed, within the processes to initiate actions to improve performance. The research project by Kube (2014) main objective was to investigate the effects of communication strategies on organizational performance at Kenya Ports Authority. It also sought to find out how open-door policy of communication influences organizational performance, to assess how group effort enhances organizational performance, to analyse how organizational structure can improve organizational performance and to identify the roles of formal communication channels on organizational performance. The main conclusion drawn from the research was communication strategies play a central role in high-performance. The research concluded that for any organizational performance to be effective, the communication should be an open communication environment is one in which all members of the organization feel free to share feedback, ideas and even criticism at every level. Inclusive—is one in which explicit steps are taken to decisions that affect their day-to-day work. Organizations with a secretive communication environment shut people out, which can stifle involvement and result in lost ideas and opportunities. Companies whose managers successfully engage employees in conversations about their work, their ideas and their perspectives on issues related to products, services, customers, and the business environment develop a culture of inclusiveness that generates results. Result driven-Business communication should be measurable results. Organizations need to think about what employees need to know to do their jobs effectively, to interact with customers effectively and to serve as ambassadors outside of the organization.

Organizations should try to incorporate effective communication strategies that will help enhance the organizational performance. A case study conducted by Kuria (2008) on the National Hospital Insurance Fund in Nairobi to determine effective communication on organizational performance discovered that lack of proper communication is a challenge to organizational performance. This was mainly seen in the issue of effective customer service. If information was not transmitted by one person to the other exhaustively, the customer was likely to not get quality service which is the gauge that measures employee efficiency and overall organizational performance.

Performance, therefore, can be defined as the evaluation of the constituents that try to assess the capability and ability of a company in achieving the constituents’ aspiration levels using efficiency, effectiveness, or social referent criteria.

Quantitatively, performance and the dimension of scale are interrelated, i.e., it is generally quantifiable in different dimensions. As an example, the performance level can be expressed as a percentage or an absolute value in a way that makes it easy to understand for directors. According to Macleod et al. (1997), the quantitative expression of performance targets is the only way to render them meaningful. Furthermore, performance refers to the nature and quality of an action performed in a company to achieve the accomplishment of its primary functions and tasks to produce profit. Communication is an integral component of any performance improvement approach. Organizations eager to accomplish strategic goals establish well defined communication strategies. A well-defined strategy is one that engages employees and aligns with the organization’s business goals. According to Richard et al. (2009) organizational performance encompasses three specific areas of firm outcomes: financial performance (profits, return on assets, return on investment); product market performance (sales, market share) and shareholder return (total shareholder return, economic value added).

2.3. Systems Theory

Because of origins from multiple disciplines, systems theory is meant to be applicable to organisms and human behaviours in different disciplines (Kast & Rosenzweig, 1972). When applied to communication, the systems theory is meant to understand the interconnectedness of the human communication and not just focus on one aspect of it (Scott, 1974). According to systems theory, components of each system are structured in a hierarchical ordering, and components are interdependent with one another in the system to the extent that one component cannot function without the support of other components. At the organizational level, the organizations and other organizations in the environment are also interdependent on one another. The outcome of an organisation’s communication has consequences on its functioning and hence it can be seen in its overall performance. Various theories have attempted to explicate this contingency view of organization-environment relationships.

The two approaches commonly cited in studying the role of organizational environments are the population ecology model (Hannan & Freeman, 1977) and the resource dependence model (Pfeffer & Salancik, 1978). These two approaches converge on the importance of environments in organizational decisions and structures but diverge on the role of environmental selection. The former emphasizes the processes of how organizations are differentially selected and determined by their fitness, measured by structural forms to their environments, while the latter focuses on active, managerial processes of selection enacted by organizations in adapting themselves to the environment. In other words, selection and adaption are the two key mechanisms that can characterize these two approaches, respectively.

2.4. The Conceptual Framework (Figure 1)

The hypotheses were as follows:

Figure 1. Conceptual framework.

H1: There is a positive relationship between management and the channel of communication used.

H2: Channel of communication used can positively lead to effective communication.

H3: Effective communication has a positive effect on organizational performance.

3. Research Methodology

The research approach used was quantitative in nature. This design enabled an analysis of effective communication and organizational performance among consultancy companies in Lusaka. Quantitative data was collected in the form of a questionnaire. The use of questionnaires helped the study to generalize findings from data collected from the respondents.

The population targeted for this study consisted of all the staff at three human resource consultancy companies in Lusaka Zambia. The companies were randomly selected. To test the theoretical expectations of any relationship, a wide range of different groups is needed to include all the various categories of people as far as possible therefore, total sampling technique was used with each institution.

This study made use of data obtained from both primary and secondary sources. Primary sources of data collection constituted the administration of questionnaires. Secondary sources of data were collected from relevant material found in textbooks, articles, journals on communication, systems theory and performance.

Data Collection

The data collection instrument used in this study as a basis for collecting, recording and measuring data which is required to provide answers to our research questions was a questionnaire. Questionnaires are considered good if well designed and distributed (Cameron & Price, 2009). The conceptual framework above was used to come up with the questionnaire and derive the hypotheses. The questionnaire was designed in two parts: the first part being the identification of respondents. The second part had closed ended questions which included all types of pre-written responses or possible answers which addressed effective communication, management, channels of communication and organisational performance from which respondents were required to choose from. Each alternative was preceded by a box in which the respondent was expected to indicate his choice with either a tick or marking a cross. Other types of closed questions include multiple choice questions in which respondents are required to choose an answer from a list or number of alternative answers. The researcher also allotted five-point scoring scale questions ranging from “strongly disagree” to “strongly agree” in which respondents were required to make a choice by ticking or marking a cross on their selection.

Data Analysis

After the data collection, the researcher attempted to edit the data collected to ensure consistency of responses. In this regard, statistical tools were used to simplify and make data interpretable and understandable. Data was analysed using quantitative methods. SPSS integrated package on a personal computer was used to analyse quantitative data (IBM Corp, 2015). The technique for quantitative data analysis used by the researcher was descriptive statistics based on frequency distribution and percentages, which is used in determining the proportion or number of respondents choosing the various answers. Correlation was then used to test if there were any relationships between the variables and how strong these relationships were. Furthermore, the researcher utilized tables, charts, and graphs to represent data and to make understanding and interpretation of facts easy.

4. Results and Discussion

This section looked at the findings of the research. Data was analyzed using descriptive analysis, regression and Pearson correlation to determine the relationship between the variables.

4.1. Basic Statistical Analysis

Out of the 138 questionnaires distributed, 88 were returned. 3 consultancy companies took part in the survey. The majority respondents were male compared to female. The work force is made up of majority employees between the ages of 21 and 30 while the least workforce has employees from the range of 41 to 50. The middle range of employees ranges from 31 - 50 years of age. From the age groups it can be noted that is it was a young workforce. With regards to level of service, top management comprised of 9.1% while middle management comprised of 4.5%, the Supervisors took up 11.4% and the staff in general composed of 75% as shown in Table 1

As regards to communication barriers, Table 2 shows that most participants 34.8% indicated that the main cause of communication barrier was due to different communication styles of management. 29.3% alluded this to conflict in the workplace while 15.2% thought that it was because of lack of transparency and trust in the organization. 7.6% of the respondents believe that it due to the inability of employees to listen to each other while 4.3% believe that cultural differences and various perspectives each.

4.2. Testing Hypotheses Correlations

This research tried to address 3 hypotheses that were derived from the framework above. A Pearson correlation was utilized to determine whether the variables were significantly linearly related. Norusis (2009) explains that the absolute value of the Pearson’s correlation signifies the strength of the relationship value which ranges from −1 to +1.

The level of significance was used for the correlation analyses, the P-value was 0.05 and the Degrees of Freedom (df) = N – 1 (where N is the number of participants/respondents). If the P-value (P) calculated from the Pearson Correlation, r, was less than or equal to the level of significance, P = 0.05. The relationship is significant. However, if the P-value (P) calculated from the Pearson Correlation, r, was more than the level of significance, P = 0.05. The relationship is not significant. Thus, a correlation analysis provided information on the strength and direction of the relationship between the variables.

Table 1. Sample profile.

Table 2. Communication barriers.

Table 3 shows the results of whether there is a relationship between management and channel of communication used. A Pearson correlation coefficient of 0.642 was found which is statistically insignificant if the (sig. 2-tailed) < 0.05. Therefore, we fail to reject the null hypothesis as there was no statistically significant relationship between the two variables.

Table 4 shows the results of whether there is a relationship between channel of communication used and effective communication and results showed a significance of 0.041 at 5% level between communication channel variable; channel normally used and effective communication variable; receives information from preferred sources. Therefore we reject the null hypothesis.

Table 5 shows the results of whether there is a relationship between Effective communication and organizational performance. The results showed that effective communication has a positive effect on organizational performance. At 5% Reliable information from other departments has a positive effect of 0.012 on organizational performance. Therefore, we reject the null hypothesis.

Table 6 basically gives the results of the hypothesis.

Table 3. Management/channel of communication.

Table 4. Channel of communication/effective communication.

*. Correlation is significant at the 0.05 level (2-tailed).

Table 5. Effective communication/organizational performance.

*. Correlation is significant at the 0.05 level (2-tailed).

Table 6. Summary of hypothesis results.

5. Limitations

The biggest limitation of the study was that the study only used quantitative methods in collecting data. Therefore the researcher could not ask in-depth questions in a qualitative manner to capture attitudes and behaviors of employees regarding communication in their workplaces. The other limitation was that the study only targeted three consultancy companies in Lusaka province and did not look at other areas in Zambia.

6. Conclusion

The study randomly selected 3 consultancy companies in Lusaka as the target population. The total number of employees from all three companies was 138 and total sampling technique was used for each company so as to have a wide variety of all classes of employees represented as respondents to the study. This was sufficient to help generalise the findings. The study sorted to identify the major factors affecting effective communication based on the systems theory and it was noted that the different management styles and conflict in the workplace were key issues. The study revealed that there is a positive relationship between the channel of communication used and effective communication. Also the study did confirm that effective communication has a positive effect on organisational performance. However, there was no relationship between management and channel of communication used. The data from the questionnaire also revealed that different communication styles from management are the biggest barrier to effective communication.

7. Recommendations

Effective communication is the make and break of any organization. Without effective communication, organizational performance tends to suffer. From the results, it was noted that management styles and conflict in the work place are the biggest barriers to communication. It was also established that effective communication has an effect on organizational performance. Therefore, the researcher put forth these recommendations:

· Communication and conflict management training must be given to all employees to address common problems.

· Timely delivery of information from management must be practiced which reduces pressure on employees.

· A study can be carried out in future to determine if management styles and employees attitudes affect effective communication in organizations.

· Feedback must be encouraged to ensure that there is understanding from both management and employees regarding tasks, goals, objectives.

· A similar research can be carried out in government institutions to compare if they face the same challenges.

Acknowledgements

The researcher would like to thank all the employees from the companies that took part in the survey and the company’s management for allowing the author to collect data.

Cite this paper: Musheke, M. and Phiri, J. (2021) The Effects of Effective Communication on Organizational Performance Based on the Systems Theory. Open Journal of Business and Management, 9, 659-671. doi: 10.4236/ojbm.2021.92034.
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