ABSTRACT

The study investigated the effects of communication patterns on performance of MFIs in Bamenda. Specifically, communication patterns was taken in three dimensions such as downward, upward and horizontal communications. Three hypotheses were tested in this study.

Descriptive research design was used, the purpose of this analysis was that it helped the researcher to summarize data and find patterns to it. primary data was used and was gotten from the targeted population of the various staffs of the randomly selected MFIs in Bamenda. The study sampled managers, accountants, loan officers, tellers irrespective if the microfinance institutions is a branch or the main office.

Using purposive and convenient sampling, 52 questionnaires were returned from the field work. Descriptive statistics and OLS were used as estimation techniques for the interpretation of findings. The findings showed that downward and upward communication have both positives and significant effect on performance while horizontal has a negative and insignificant effect. The study conclude that  communication patterns have an effect on performance of MFIs in Bamenda. We recommends that communication among employees of MFIs in Bamenda should be unidirectional as it will permit for adequate information flow concerning key change issues in the institution.

Keywords: Communication Patterns, Performance, Downward, Upward, Horizontal

CHAPTER ONE

INTRODUCTION

Background to the Study

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 et al., 1998). As simple as communication may look, research has shown that communication can build or destroy an organization’s existence (McPee and Zaug, 2009). 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 et al, 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).

Today, communication styles are as diverse as the goals. Communication can be interpersonal: a two-way interaction with someone else, interpretive: (Estlein, 2021).  Understanding and interpreting a one-way aural or written text, or presentational: presenting information in either a written or oral format. In the throes of diverse living and working environments, communication skills anchor us to what matters. In a way, communication skills are the key to social integration in the 21st century. Today, communication styles are as diverse as the goals The incoming of globalisation in our societies today has created interaction among individuals and their related activities they carry out within an enterprise (Robertson, 2018). 

Moreover, communication is the means of transferring messages and intention. Hence, for employee to be effectual, efficient and be of value to any organization, it is necessary to be skillful in all appropriate forms of communication, because there are many means through which people communicate. Also, to establish effective communication, messages must flow from the sender to the receiver regardless of the method used in communicating and must be understood by the receiver who will give appropriate feedback. Thus, effective communication is associated with reading, listening, reasoning skills and speaking. However, it is a fact that when communication passes from the source to the receiver its original meaning could be changed or modified which leads us to the important aspect of communication process that as to do with effective listening, reasoning and feedback mechanism to ensure that the receiver properly understands the message that has been passed. On the other hand, “noise” which is associated with communication affects the message the receiver understands (decode), which explains happenings, the baggage, distractions etc. According to Shannon and Weaver’s model (1949), a message starts from the source of information and delivered through a transmitter that is sent along a signal that passes through a source of interference (noise) and reaches the receiver who then dispatches the message to its destination. Today, the success of an organization depends on the effectiveness of communication system in that company. Hence, communication is seen as a relevant mechanism in business environment Woods (2005).

Also, communication does not only focus on the transfer of information from one person to another but also ensures that parties involve in the process have an agreeable interpretation of the context. (Robbins et al., 2010). The association between employee satisfaction, commitment, job performance and improved productivity suggests that an important contributor to the employee’s engagement within the organization is the leader employee relationship. Foong (2001) suggests a leader’s attitude impact the behavior of employees. Lee & Chuang (2009), states that a great leader does not only influence his subordinates but offers them the opportunity to improve performance and meet the demand of improving productivity. Thus, a leader style of leadership is as relevant as his method of communication. The leader influence groups and team work in organizations. A leadership style that reproduces with followers will allow the leader to achieve greater employee performance and productivity. “Kumuyi (2007) states that leadership communication is, therefore, passing a message to an audience by any appropriate means such that the audience understands the message, accepts it and reacts to it according to the sender’s expectation”. However, to the management, a good employee relation ultimately shows a good “esprit de corps” (Team Work), improvement of employees’ performance and a good nature of expertise which leads to increase in performance, productivity and profitability; while to the workers, employee relation means satisfying compensation and benefits, proper work condition, and also a strong sense of loyalty is key to improve teamwork. Thus, employee relationship is accomplished through deliberate and planned method designed to achieve organizational goals. Moreover, the primary objective of any organization is to make profit which is achieved by informing employees about their duties and the rules and regulation guiding the organization (De Ridder, 2003).

More so, formal and informal communication is regarded as the major forms of communication that exist in an organization. “A formal channel is, used to discuss work-related issues, which is a communication process that follows an organization’s chain of command, while an informal channel, is described as a communication process that follows unofficial means of communication, sometimes called ‘the grapevine’, usually based on social relations, it can also be about work” (Bratton et al., 2007). Effective communication shows the mutual exchange that exists among every member of the organization which shapes, describes and build up relations that improves organisation success. Thus, the role of communication is to transmit information from management to staff, so that employees are able to achieve organizational goals and objectives. Also, Keyton, (2011) stated that “the elements in the communication process determine the quality of communication and a problem in any one of these elements can reduce communication effectiveness”. Therefore, it is justifiable to say that poor communication is recognized as a major factor that hinders employee performance and overall effectiveness of an organisation (Lutgen-Sandvik, 2010).

In essence, communication is a key aspect of daily survival of every human being. Thus, this has made organizations create communication principle appropriate to achieve its desired result within the organization while communication principles outside the organization have also been created for societal growth. Ewing, (2013), states that communication is a broad and dynamic mechanism which involves the process of passing information from a sender to a receiver. Also, effective employee performance depends on open communication that exists within the organisation. Many surveys have showed that individual within an organization, from superior to subordinates are devoted to improve communications which as direct relationship between commitment and job satisfaction (Kalla, 2005). Hence, Bloisi., (2007) define productivity “as a measure of how well an organization achieves its goals, and efficiency. Thus, organizations should design a new model or framework to communicate better to ensure high level of job satisfaction, employee commitment, improve performance and ultimately increase productivity in the organization.

Employees are without contradiction the most valuable, dynamic, and significant strength of every organization in this contemporary world and they are regarded as the most valuable investment in any works of life, employees are at the epicentre of any successful business or organization, thus priority should be accorded them, especially through communication channels. Most organisations focus on maintaining good relationship with their customers in the sense that they create awareness on the type of activities they carry out by informing potential customers about their existence. The only way in which these businesses attend to their customers is through good communication networks. When these organisations maintain a good relationship with their customers, in the long run it builds an emotional attachment on to the customers making them to make repeated purchases in the long run (Hutchinson et al., 2012).

In a nutshell, the role of communication in an organisation is vital. Good communication requires that the employees and other management authorities to maintain harmony. Creating a good climate within the company revolves over the attainment of economies of scale (Aiginger and Rodrik, 2020).  whereby the company or organisation will experience an improvement in sales revenue. Good communication helps the workers to adjust to the physical and social aspects of work. It also improves good human relations in the industry. An efficient communication system enables the management to motivate, influence, and satisfy the subordinates, which boosts their morale and keeps them motivated. There are a considerable number of ways that an organization can communicate effectively. Different forms of communication are applied by various organizations at a particular period. From a broader perspective, organizational communication takes three different forms such as work related communication, “symbolic interactions between organizations and their stakeholders, dealing with new products, services, and technologies”. Stable related communication (Robbins et al, 2010).

Employee communication is the sharing of information, ideas, and feelings between employees and managers of a company. Communication can happen verbally, or electronically, on various mediums such as email, mobile applications, intra-nets, and collaboration tools. Employee communication is vital for the health and strength of a company. Without communication, managers would not be able to properly lead the employees they manage. For companies to run efficiently and thrive, they need to implement clear communication strategies. In addition, having the right communication tools in place is also essential. In addition to establishing goals for a successful plan, a communication strategy typically involves the selection of tools to enable a strategic mix of verbal and non-verbal communication styles. Using communication strategies in the workplace increases company knowledge, eases cross-department communication and ultimately makes business processes more streamlined and efficient (Sabate et al., 2014).

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 fulfilment of necessities in terms of satisfactory and correct information regarding the organization and their roles to be accomplished can enhance performance (Greenberg & Baron, 2008).

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) 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 policy making. 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).

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).

Looking at the transition in the world’s political, economic and technological sectors that intend to in individuals and organisational growth, competition has been settled among companies throughout countries. Political stability builds a favourable environment for the creation of enterprises which in the long run brings about competition between small and large firms hence economic growth. The broad sense behind the notion of globalisation is all about economic development and technology advancement (Bobanović, 2021). Globalisation has exerted pressure on many economies most specifically the less developed countries and this has caused high competition among firms. It is well known that small firms cannot compete with large firms due to large economies of scale enjoyed by large firms. The existing managerial techniques which creates good communication skills among employer and employees in the organisation directed towards the achievement of the various tasks in the organisation. Thus, the present-day management technics targets increase work performance from employees through the usage of communication powers (Erogluer, 2011).

 The term communication depends on the context in which the term is to be applied and that is why even in companies there are different form of communication that do exist (Rodder, 2020). Also, the word communication refers to different phenomenon that refers to different things and can also be known as a set of uncertainties (Flatter et al., 1997). Wilson (1997), explains communication as the absence of uncertainty that is a key goal of communication about uncertainty during the problem-formulation phase is to develop a common understanding of the decision problem, of the limits or constraints on the decision options, and of the potential uncertainties that exist in the evidence base for the decision.

However, not all communications can run effectively, sometimes some errors are called missing communication. Mistakes that usually occur in communication include feelings of selfishness, a sense of non-openness between someone, and there are misunderstandings. Without communication in the office, office goals will not work or there will be no progress. Office work is related to one another. So if there is one error in receiving information, it will be able to hinder everything. In communicating in the office, of course, good cooperation is needed, so as not to cause misunderstandings between members and cause differences in perceptions. If misunderstandings often occur in a company, it will cause disharmony. This disharmony will lead to reduced employee performance, so that organizational goals cannot be achieved optimally (Agustriyana, 2021).

Communication is the medium to conduct meeting, discuss with each other regarding issues based on the functions and activities. Communication strategies play significant roles in effective management of fundamental policy govern by central bank. The central bank has announced four issues related to the communication in the central bank. The first communication issue is economic conditions, which collect information related to the current conditions of the economy (Amato, 2002; Berenstein & Campbell, 2002). The second communication issue is policy decision made by central bank to target current operating. The third communication issue is the description of the strategy guided by the central bank to carry out the communication policy to the general. The fourth type of communication debate is outlook of the future policy, which generally increases transparency, and effective stabilization of the communication policy (Amato et al. 2002; Amato et al., 2015). To achieve sustainable development goals is important (Bells et al, 2019). Bank is one of the important sectors to achieve development goals. There is still a gap in banking communication practice in workplace. The workers would like to adopt traditional method of record keeping information and data rather than adoption of modern technology. Moreover, there is difference in culture, language, caste, norms and ethnic group create communication gap between employees (Cujoe et al., 2015; Deshmukh, 2004).

Ishaq et al. (2011), explained banking communication focus on the customer satisfaction mainly depends on the employee’s behavior towards customer. Moreover, employees performance depend on training, technical support, empowerment, rewards, recruitment, performance reviews motivation and selection of employees. Additionally, the employee’s perception changes the service quality in international level. There are five internal service orientation dimensions which promote effective banking communication namely employees’ training, employees service performance, service, concept, development and positioning, organizational knowledge and customer service orientation (Bennett & Kottasz, 2012).

Banking communication is a relationship between communication management and banking system (Rai et al., 2019). Proper banking management communications create customer satisfaction and bank loyalty. Financial institutions like banks are encouraged to promote banking communication management because it fosters economic development as it manages risks, monitors managers, evaluates project, mobilizes saving and facilitates transaction (Keyton et al., 2013). Banking communication is the process of interchanging information, ideas, and knowledge within or outside banks. The organization consists of different types of employees come from different sections of the society. Moreover, they have different cultural backgrounds guided by norms, religion, language, and ethnicity. The effective communication enhances productivity and efficiency of the employees (Turner et al., 2010).

In Nigeria communication covers all activities that an individual does when he or she wants to make a change in someone else’s mind. Communication is a meaning connection between an individual or individuals and organization. Communication is a process that contains expressing, listening and understanding (Banerji & Dayal, 2005). In business context, individuals use communication as a channel to interact with each other in day to day life (Okyere, 2011). Good communication is a necessary tool in achieving high quality of performance and maintaining strong working relationships within the organization.

The findings from some of the previous studies conducted on corporate communication and performance include Atieno and Kyongo, (2017) who found out that strategic change affects the Kenya Wildlife Service performance. Nyandaro, (2015) found out that communication to stakeholders committed leadership and strategic planning influence performance of commercial banks. Ndahiro et al.,  (2015established that the majority of employees in the institution have accepted the changes and this has led to enhanced organizational performance. Irawanto, (2015, established that the more employees participate in the discussions on emerging issues, the more they are informed on the decision-making. However, these researchers focused mostly on measuring the financial performance of financial institutions and have overlooked the non-financial performance measurement.

Technological development changed the strategies of bank strategies of banking services. They focus on both commercial and individual customers through qualitative service. Bank expands their service quality implementing marketing strategies to enhance revenues; customer retention and cross sell ratios. Likewise, quality service delivery increases customers’ loyalty to bank. Now, banking communication becomes competitive advantage in banking industries (Scornavacca & Hoehle, 2007). From the evidence mentioned above banking communication shows relationship between communication management and banking system. Proper banking communication creates customer satisfaction and promotes economic development. Moreover, banking communication interchange information, ideas and knowledge inside and outside banks. Effective communication successfully collaborate the interpersonal relationship with employees and enhance their working efficiency (Thomas et al., 2009). Thus, the importance of banking communication is increase day by day in banking system.

The role of communication in an organisation can be seen in different perspective and these roles permit the organisation to achieve its objectives (Ada et al., 2008). Though the organisation might be able in achieving all objectives it has not exempted them from experiencing cons of communication. Looking at the work of (Holtzhausen, 2002) who explained that good communication skills will improve employee performance within an organisation. His study has greatly contributed to literature as it mostly focused on the effectiveness of communication and the various ways in which it improves employee performance. It is in the course of studying the challenges that most employees pass through in the organisation in order to realise their tasks that the researcher got to view that one of this problem was communication. Thus, this study is out to evaluate the role of communication on the financial performance of MFIs in Bamenda North West Region of Cameroon.

• Statement of the Problem

Communication has been largely centred on organizational structure with respect to the line of authority and neglecting the strategic importance resulting to ineffective use of communication major channels. This has resulted into ineffective forward communication where top employees refuse to listen to the observation, suggestion and opinion of lower employees because of cumbersome reporting lines hence poor communication, which makes it more difficult for the employee to abide it (Mlhud, 2017). In some cases, the communication gap that exist between supervisors and employees makes them to generally sense a foul play or not trustworthy, respected or valued to be responsible in their field of work (Gou, 2012). Based on this, some superior do not believe in the competence of their subordinate and making any suggestions from subordinate irrelevant.

To stay profitable in the highly challenging and competitive global market economy, all factors of production, that is men, machine, method, market, money and materials, should be wisely managed. Among the factors of production, the human resource constitutes the biggest challenge because unlike other inputs, employee management demands skilful handling of thoughts, feelings and emotions to secure highest productivity. Organisational communication plays an important role in this challenge. Inability of a heads or Managers of any organization to coordinate a perfect and smooth flow of communication interaction among employee and outside business environment may likely create and facilitate low productivity with high degree of workers boring and disarray.

However, people understand and interpret messages differently. In communication, there are many unwanted interference that can distort a message and remain always a potential threat to effective communication, because it can interfere with the accuracy of a message being communicated (Koontz 2001).  Similarly, MFIs in Bamenda have been faced with an array of problems that seem to be an impediment to the growth of any organization such as, mismanagement of funds and resources, poor leadership skills, low level of real income, and poor infrastructural facilities to mention but a few. Downward communication, Upwards, downwards and horizontal communication are formal organizational communication flow dimensions that are mostly overlooked in organizations. Effective information flow helps build sense of corporate identity, teamwork, productivity, participation, improve retention and job performance (Neves and Eisenberger, 2012). Various studies have been done on the flow of communication, Stremlau (2013) research suggests an alternative approach in communication in post war societies. This research sough to ,determine information sharing has greater impact to employee motivation. However, there is no study that has been done specifically on the effect of communication patterns (downwards, peer to peer and upwards) on performance of MFIs  Bamenda, Cameroon.  The researcher therefore intends to find out the tricks used by different organizations in communication and how to deal with misinformation because some organizations give wrong information intentionally. It is with this problem of poor performance that the researcher derived the interest to research this topic.

Research Questions

Main Research Question

What is the effect of communication patterns on the performance of selected MFIs in Bamenda Municipality?

• Specific Research Questions

1. To what extent does downward communication affect the performance of MFIs in Bamenda Municipality?
2. How does upward communication affect the performance of MFIs in Bamenda Municipality?

• How does horizontal communication affect the performance of MFIs in Bamenda Municipality?

Research Objectives

Main Research Objectives

To examine the effect of communication on the performance of selected MFIs in Bamenda Municipality.

Specific Research Objectives

1. To investigate the effect of downward communication on the performance of MFIs in Bamenda Municipality.
2. To evaluate the effect of upward communication on the performance of MFIs in Bamenda Municipality.

• To assess the effect of horizontal communication on the performance of MFIs in Bamenda Municipality.