CHAPTER 1

1.1 Introduction

Internal communication is considered a strategic tool for binding an organization,

enhancing employee morale, promoting transparency and reducing attrition. Ironically,

while everybody understands and talks about the significance of internal

communications, very few are able to manage it efficiently. Both long-term and short-

term fallout of ineffective internal communications can be damaging for an organization.

It can start from the spread of rumors to disillusionment among employees to a gradual

destruction of the company's brand image. Worse, it may also lead to the slow death of

the organization.

A lower rate of attrition, employee engagement and satisfaction levels

(determined through surveys) are all pointers to an organization’s successful internal

communications initiative. Effective use of internal communications can enhance direct

sales force productivity. E-mails, voice mails, etc can quickly disseminate educational,

tactical and motivational information. It helps in staying abreast of regulatory changes

and scientific developments for drugs in and out of the market

A strong internal communications strategy ensures that employees are aware of

how the values and ethos of the company is linked to the business goal. "This provides

the people of an organization the glimpse into the bigger picture which propels the

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growth of an organization and frees them from the blinkers of simply focusing on the

growth of their division, or facility or market," (Glenmark, 2001).

1.2 Statement of Problem

Effective internal communication in an organization is perceived as one of the

important factor which contributes to a superior financial results and a greater

organizational stability (Watson Wyatt 2003, 2005). Thus, organizations without a proper

internal communication practice are more likely to be exposed to poor employer-

employee relationship. Miscommunication at the company level not only impacts internal

customers (managers, supervisors, departments and employees), it also impacts external

customers. Lack of effectiveness communication between executives, managers and

supervisors with employees will definitely lead to poor performance of business. What

was once considered a “soft” skill is now seen to have “hard” business impacts. The costs

to business of poor employee communication include:

• increased employee turnover

• increased absenteeism

• dissatisfied customers from poor customer service

• higher product defect rates

• lack of focus on business objectives

• stifled innovation

(Based on results of research by Watson Wyatt, Gallup Consulting and Towers Perrin.)

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1.3 Research Objectives

The core objective of this research study is to identify the importance of effective

internal communication in an organization in four fundamental levels of communication

in an organization:

a) Organization wide communication – involving all employees

b) Departmental communication – specific to one department or unit

c) Team communication – within one cohesive team or group

d) Individual communication – specific to one employee at any one time

Some of other research objectives identified which is related to the research objectives

are the importance of effective internal communication in building and nourishing

employee relations, establishing trust and in providing timely and reliable information.

1.4 Significance of the Study

The findings of this study will lead organization to the awareness and to a better

understanding of the importance of effective internal communication in the four

fundamental levels of communication. Subsequently, it will encourage the organization to

reorganize its internal communication strategy in accordance to the levels of

communication (between and within organization). Thus, organization would be able to

improve their business performance indirectly.

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1.5 Summary

This chapter explains on the definition and importance of effective

communication in an organization. Furthermore it gives an overall view on the

significance of the existing problems occurred due to lack of effective communications at

workplace. Purpose of the research study is also mentioned here followed by the

probable outcome or contribution of this research towards the organization, society and

academicians.

Chapter two mainly discusses on the summary of the literature review on the

studied topic. Some important facts and figures are quoted for reference and knowledge

purposes. A framework is associated in order to support hypothesis of the research study.

Some background or information of the company studied for the research is also included

in this chapter.

The last chapter for this research proposal focuses on the methods use for the

research study. It specifies on the research criteria’s such as on the populations, sampling

size and methods, instrumentations to be use for data collection and data analysis

methods.

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 CHAPTER 2

2.0 Literature Review

2.1 Definition and Importance of Internal Communication

Internal communications may be defined as transactions between individuals and

groups at various levels and in different areas of specialization (Frank and

Brownell,1989) and these transactions are intended to design (and redesign)

organizations and coordinate day-to-day activities. Communication dynamics in

organizations are necessarily multifaceted and intricate (Buckley et al., 1998), reflecting

the complex norms, values, climate and goals of the organization, perhaps because

communication is a multidimensional construct (Smidts et al., 2001). Wright (1995)

suggested that management should devote as much attention to employees as it does to

stockholders and customers. Therefore, internal and external communications need to be

harmonized (Van Riel, 1997).

As in any relationship, communication is the key to a strong business

relationship. This can be the relationship between business and customer, or, equally as

important, the internal relationships among different employees within the company.

Communication can be improved in virtually every workplace, no matter the industry or

size. After all, it is the only way for information to effectively spread throughout the

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business so that everybody can be informed to the degree that they required to properly

achieve their goals.

At the subject company, the employee communication function took a different

approach. The company defined a body of knowledge (a set of topics) that the

organization’s management deemed most important for its employees to know and set

about to inculcate the studied topics into its employee communication strategy. (Julie

O’Neil, 2008).

Internal communications within a firm is becoming an increasingly important

component of business and must assume a central, aggressive role (Grates 1993).

According to Sonnenberg (1992), internal communication is a philosophy, not an activity.

If a firm’s employees do not accept the firm’s mission, goals, and objectives, the firm has

little hope for success in the competitive environment of the 21st century. ‘‘If employees

don’t understand how they contribute to the (business) plan, it’s doomed to failure’’ (as

quoted in Hauss 1993).

2.2 Company background

Shin-Etsu Malaysia was established in the year 1989. It is a multi-national

company (MSC) which has its plants in many locations. Shin-Etsu’s corporate policy is

“Together we build our company by giving our customers continuously high quality

products at competitive price and on schedule without forgetting our obligations to

society”. Almost every activities or processes in this organization require communication

internally and also externally. Thus, both internal and external communication plays a

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vital role in determining its secret of obtaining a MNC status. However, this research

study will be based on the internal communication among four fundamental levels as

mentioned in Chapter 1. A simple framework has been designed in order to study the

importance of internal communication in this organization.

Organization – among all

Departmental – within
department Internal
communication
Team – within team/group

Individual – one to one

Figure 1

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 CHAPTER 3

3.0 Proposed Methodology

This study is a qualitative study using the survey approach.

3.1 Population of the Study

The population of the study is to be selected from a manufacturing

company, Shin-Etsu (Malaysia) Sdn.Bhd. The total population of the company is

approximately 2000 employees. Shin-Etsu is a company that manufacture voice

coil motor (VCM) – a component for Hard Disk drive (HDD). Basically the

population will be categorized by gender and designation.

3.2 Sample Size

Out of the 2000 employees, 200 respondents will be selected for sampling

purpose. There are plenty of departments in this company. However respondents

will be selected equally from main departments which are production, quality

assurance and general administration.

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3.3 Sampling Procedure

Systematic sampling procedure will be adopted to identify the

respondents. The aim is to obtain a representative sample and the findings can be

generalized to the population at large.

3.4 Pilot Studies

Pilot study will be carried out to test the questionnaire designed prior to

the exact research. Its main purpose is to ensure that the questionnaire which has

been designed is viable and reliable. In other words, it is to check whether our

respondent understood the questionnaire as our understanding without

misinterpreting it. Pilot study will be done among at least 50 staffs of this

company.

3.5 Research instrument

The research instrument for this study will be the questionnaires to be

adapted and re-designed from Julie O’Neil, (2008), public relation journal, vol.2.

Basically the questions will be divided into two main sections to cover the

main four fundamental objectives to test the importance of internal

communications among : 1) Organization, 2) Department, 3) Team and 4)

Individual.

 The first section will contains demographic information such as

gender, marital status, years of experience, department .

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  Second section will consists of opinion type of questions whereby

the questions will be distinguished between organization, departments, team

and individual. For example; ( 5 questions will lead to importance of internal

communication among organization – all employee, another 5 questions will

lead to importance of internal communication between departmental and so on

for team and individual )

The types of questions which will be included in the questionnaire is as below

stated.

 Closed ended questions – questions such as gender, designation, age,

income level, years of experience(s) will be included in here.

 Attitude questions – questions will be emphasizing on the opinion of the

respondents. The questions will be categorized based on the objectives of

the importance of effective internal communication in building and

nourishing employee relations, establishing trust and in providing timely

and reliable information. The answers will be given in Likert scale.

3.6 Reliability

Reliability of the designed questionnaires and associated framework will

be evaluated by confirmatory factor analysis (CFA) and Cronbach-alpha using

Statistical Package for Social Sciences (SPSS) Version 12.

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3.7 Data Analysis

The data which have been collected will be coded using SPSS. The results

will then be analyzed using statistical analysis tools as in SPSS.

Data or results obtained from the research study will be analyzed with

respect to the objectives of the study. It will be analyzed in accordance with the

 Internal communication status within and between organization

 Gender : results distinguishing between gender

 Designation: characteristic of results based on different level of

designation. From operator to the management level.

3.8 Limitation of the study

The research study is limited only on one organization. Further research could be done on

overall manufacturing organization

3.9 Research plan – as attached behind

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