by John Ball
03 Nov 1999
| "What do accountants do?" How many times have ACCA students been asked that question? The answer, of course, is that accountants, and accountancy, is about communication. But communication is not just sending messages or e-mails, or indeed producing management reports or final accounts. It is about understanding the nature of the communication process, especially for the management of people. If people do not communicate then the accountant’s work can never be complete. |
Central to the communication process are two fundamental elements of management — understanding the nature of the organisational structure, and the way in which communication flows within that structure. Take the idea of the organisational structure first of all. Everyone knows what an organisation chart is; every accounting practice, factory, shop and office proudly displays such a chart. But what message is it intended to convey?
The organisation chart describes in diagramatic form the structure of the organisation. It is the skeleton upon which every other activity depends, more importantly, it is the framework which explains the communication process. It illustrates to everyone who communicates with whom, how the control system works, who is in control, who has authority and above all, who is responsible. It explains how the organisation is co-ordinated and how individual departments relate. Formal structures are often based on specific tasks, and it is how these tasks are allocated and the authority which they carry which is explained by the organisational structure.
A business organisation may be structured in many different ways, depending upon the environment within which it operates. Traditionally, the structure — and therefore the communication process — is based upon individual departments, although more and more organisations now see the product and the market as more fundamental to structure than individual departments. There are, however, always problems with any communication system. Traditional organisations based on departments often tend to be bureaucratic and slow in distributing information, whilst organisations which are informal and often more aware of the external environment sometimes lack the formality and control of the traditional organisation.
In more formal organisations, especially accounting practices, the organisation chart defines the way that communication and work flows through the organisation. The typical organisation chart assumes a hierarchical structure, reflecting communication flowing downwards from top management to the departments further down the organisation. But of course communication also flows in reverse, instructions received from above have to be acted upon and reported. However, in many modern organisations where conventional communication structures either do not exist or are less formal, communication tends to be horizontal between individuals and departments, rather than the upward or downward flow assumed by so many to be the normal case. Whichever structure is adopted, problems of communication will always occur.
There are, of course, other forms of communication. Teams are very much a modern form, but the role of the committee is still important, again especially within the formal structures of accounting. This is, of course, why committees are still important; because of their formality. Unlike teams (which are often established to tackle individual problems or projects), committees are often permanent, have authority and provide a fixed opportunity to resolve conflict and promote cooperation between departments. They follow well established procedures and provide a well tried way of resolving difficult decisions because all individuals and departments are formally involved in the decision-making process.
Internal communication is not the only form of communication. All organisations interact with the environment, and in people management terms a particular and unique form of external communication arises when new employees are required. How are new employees found? Specialists, such as accountants, may be sought through advertising in specific professional journals, whilst unskilled production operators might be sought through the local employment system or government agency. Whatever new employees are required or whatever recruitment medium is used, the recruiting organisation must ensure that information about the vacancy is clear, concise and positive — and that the organisation itself knows what it requires of the new employee. Employees cost a great deal of money, and if the communication is incorrect or inappropriate the wrong employee can be expensive!