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9609 · 7.2.3

Channels of communication — practice questions

Practice and worked examples for 9609 Channels of communication. Short previews only — attempt the full question in MarkScheme against the official scheme.

Worked example 1

Marketing launches promotion without telling operations; factory cannot meet demand. Which channel failed and how to prevent recurrence?

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Failure: Horizontal between marketing and operations — classic functional silo (7.1.2).

Downward OK within each dept but no cross-channel.

Grapevine: Warehouse staff knew promotion before ops manager — official horizontal slower than rumour.

Prevention: S&OP meetings (sales & operations planning), shared forecast system, promotion sign-off requiring ops capacity check.

Worked example 2

A firm with 500 employees has a 20% annual staff turnover rate. The average cost to replace an employee is $5,000. An employee survey identifies poor upward communication as a key cause. The firm invests in a new communication system: a digital suggestion platform costing $15,000 annually and a $25,000 budget for employee rewards. This initiative is projected to reduce turnover by 5 percentage points. Calculate the net financial benefit in the first year.

Show solution outline

This problem requires calculating the financial impact of improving the upward communication channel.

Step 1: Calculate the initial annual cost of staff turnover.

  • Number of employees leaving per year = 500 employees × 20% = 100 employees
  • Initial annual turnover cost = 100 employees × $5,000/employee = $500,000

Step 2: Calculate the total cost of the new upward communication system.

  • Platform cost = 15,00015,000
  • Rewards budget = 25,00025,000
  • Total system cost = 15,000+15,000 + 25,000 = 40,00040,000

Step 3: Calculate the new annual cost of staff turnover.

  • New turnover rate = 20% - 5% = 15%
  • New number of employees leaving per year = 500 employees × 15% = 75 employees
  • New annual turnover cost = 75 employees × $5,000/employee = $375,000

Step 4: Calculate the financial saving from reduced turnover.

  • Saving = Initial turnover cost - New turnover cost
  • Saving = 500,000−500,000 - 375,000 = 125,000125,000

Step 5: Calculate the net financial benefit.

  • Net benefit = Financial saving - Total system cost
  • Net benefit = 125,000−125,000 - 40,000 = 85,00085,000

Conclusion: By investing $40,000 in improving upward communication, the firm achieves a net financial benefit of $85,000 in the first year. This provides a strong quantitative justification for the project.

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