Communication Systems in Modern Business Management Structures - Needs, Requirements and Solutions

Diploma Thesis, 2006
61 Pages, Grade: 1,3


Table of contents:


1. Introduction

2. Modern approaches to communication systems in business management
2.1. Communication and communication models
2.1.1. Communication
2.1.2. Communication models
2.1.3. Classification of communication
2.1.4. Communication scenario
2.2. Communication systems
2.2.1. Development and evolution of business communication systems
2.2.2. Types of communication systems
2.2.3. Features of communication systems
2.3. Modern Business
2.3.1. Modern Business
2.3.1. Modern business and e-business
2.3.2 Fields of modern business

3.1. Communication in modern business
3.1.1. Communication flow in modern companies
3.1.2 Relation between company size and business communication
3.1.3. Integration of different media
3.1.4 Knowledge management General knowledge management Explicit and implicit knowledge Structural, organizational and technical needs
3.1.5. Communication policy Communication policy Communication charter Security Openness Rational communication
3.2. Hierarchy and management in modern business
3.2.1. Hierarchy and management in modern business
3.2.2. Hierarchy and communication flows Hierarchy and communication flows Virtual structures Logistics and supply-chain-management (SCM)
3.2.3. Management style and communication
3.2.4. Business process standards
3.2.5. Workflow and workgroup oriented communication
3.2.6. Value of communication and economical aspects of communication systems
3.3. General needs and requirements
3.4. Summarizing overview of needs and requirements

4. Communication systems in departmental business management and some proposals
4.1. Comparison of communication systems for modern business
4.1.1. Comparison of communication systems for modern business
4.1.2. HiPath 3000 HiPath 3000 and its applications Summary
4.1.3. Octopus F650 Octopus F650 and its applications Summary
4.1.4. SOPHO 2000 IPS SOPHO 2000 IPS and its applications Summary
4.1.5. Conclusion
4.2. Examination of the company XYZ and the HiPath 3000 communication server
4.2.1. Description of the company XYZ
4.2.2. Handling analysis of requirements and needs by the HiPath 3000 communication system in the company XYZ
4.2.3. A SWOT analysis for the company XYZ
4.3. Conclusion

5. Conclusion

6. References
6.1. Books
6.2. Scripts and other sources
6.3. Internet sources with data and time of accession

8. List of tables

7. List of figures

9. Table of abbreviations




This diploma work presents an overview of the needs and requirements which occur during the application of communication systems in modern business management, and of possible solutions.

The work may be divided into five parts. After an introduction into the diploma thesis, an overview of communication, communication systems and modern business is given. In the third part of this work communication needs and requirements which modern companies face in their activities are identified,. An overview of three modern communication systems is given in the fourth part. The different systems are shortly presented with their general features and criticized in the focus of the needs and requirements defined beforehand. In the last step the HiPath 3000 communication system is analyzed profoundly on the example of a fictive counselling company. This analysis shows that today’s communication systems can handle different needs and requirements of modern companies. However, there exists no general communication system. It has to be tailored depending on the respective company and its needs. In the last part of this diploma work a general conclusion is given.


Niniejsza praca dyploma jest przeglądem potrzeb i wymagań, istniejących podczas zastosowania systemów komunikacynych we współczesnym biznesie, oraz przedstawia możliwe rozwiązania.

Praca składa się z pięciu części. Po wstępie następuje zarys dotyczący komunikacji, systemów komunikacyjnych i współczesnego biznesu. W trzecim rozdziale zdefiniowane są potrzeby i wymagania komunikacyjne, które istnieją w współczesnych firmach. W części czwartej dokonany jest przegląd trzech współczesnych systemów komunikacyjnych. Trzy rożne systemy przedstawione są wraz ze swymi ogólnymi właściwościami i oceniane pod kątem wcześniej zdefinowanych potrzeb i wymagań. Ostatnim krokiem jest intensywna analiza systemu komunikacyjnego HiPath 3000 na przykładzie fikcyjnej firmy doradczej. Analiza ta wykazuje, że współczesne systemy komunikacyjne są w stanie sprostać rożnym potrzebom i wymaganiom we współczesnym biznesie. Nie istnieje jednak jeden ogólny system komunikacyjny, lecz musi on być „szyty na miarę” w zależności od danej firmy i jej potrzeb. Ostatnia część niniejszej pracy zawiera ogólne wnioski.

1. Introduction

Since the beginning of mankind until today uncountable many inventions took place and prepared the base for an unbelievably fast development. Compared to the age of our planet the time period between the invention of the wheel 5000 BC50 and the first computers like the British “Colossus computer” or Konrad Zuse’s “Z machine” is not more than a tiny moment. This development would have been impossible without directed communication, as well as sharing and storing of knowledge.

The invention of the computer laid the foundation for the change from the industrial age to the today’s information age. As the term “information” already implies, the economical focus in this age has changed from industrial production to information and information processing. This means that today the value of information is significant for economics and business. However, information gets a value just when it is exchanged, which makes it necessary that communication takes place. Otherwise nobody would be interested in buying or selling information. In today’s business information can be exchanged in various ways. Communication can take place between people; it can be an interaction between a person and a computer or between computers only. For all these interactions communication systems are necessary. They have a wide range of structure and specification, depending on the media and contents which have to be communicated. These systems shall provide the infrastructure for an effective work which helps to save money and time and at the same time helps to remain compatible and to develop further.

In the here presented diploma work I will focus on “Communication Systems in Modern Business Management Structures - Needs, Requirements and Solutions”. This means that I will examine needs and requirements which are set by modern companies to communication systems and which solutions are offered to them. Therefore, I will focus in the next chapters on the following aims:

1. Definition of communication systems and modern business
2. Description and definition of needs and requirements which are set by business structures and communication processes in modern business management
3. Presentation of three communication systems and comparison of their possibilities with defined needs and requirements
4. Conclusion about the application of communication systems in modern business

In my diploma thesis I will not deal with the exact hardware and software details, but give a general overview about today’s communication needs and requirements in modern business.

2. Modern approaches to communication systems in business management

2.1. Communication and communication models

2.1.1. Communication

Communication is “something” which is done everyday and everywhere in the world and not only by human beings. It also takes place in the flora and fauna and even between somatic cells. The communication scientist Klaus Merten has counted around 160 different definitions for communication116, which leads of course to dissimilar ways of understanding when using this term. The basic definition for the term “communication”, as it will be used in this diploma work, is the following one:

Communication (Latin communicare „share, communicate, let participate, make together, unify) means at the human level the interactive exchange of thoughts by speech, gestures, facial expressions, writing or pictures.

In a more extended meaning communication is an interactive transmitting of data or signals which have defined a meaning, between animals and plants and technical objects or systems. [43, translated into English by myself]

In a general understanding one may say that communication is the exchange of information between a transmitter and a receiver. This means that without information no communication takes place and without communication no information can be exchanged. Norbert Szyperski, a German professor, states that communication and information have a Siamese twin character [7, p.7] and therefore information and communication have to be treated together. This detail explains also the fact that the term “information management” is much more common than “communication management”, as both terms implicate the idiom “information and communication management”. As the title of this diploma work contains the words “communication system”, the content of this thesis focuses mainly on the question how systems communicate and which features these systems need for a successful application in modern business. Obviously it is not possible not to refer to the term “information”, but it is limited to the in my understanding necessary minimum.

2.1.2. Communication models

Scientists have developed many different communication models and theories which are necessary for the understanding of the processes connected to the event “communication”. A very popular communication model was developed by Claude E. Shannon and Warren Weaver. Originally this model133 was created in 1948 for optimal communication in military, but was later used for scientific explanation of interpersonal communication. The model shown below in figure 2.1. presents the communication process by Shannon and Weaver with its single elements. These are:

illustration not visible in this excerpt

Figure 2.1.: Schematic diagram of a general communication system Source: [133, p.2]

The aim of Shannon and Weaver was a free of loss data transaction via electronic channels. This means that data signals are split from background noise and it is being tried to recognize errors which appear during the transmission and to correct them.

The following example of a telephone call shows how communication scientists understand this model. The message of the information source is encrypted into impulses and transmitted via the telephone cable to its destination. There it is decrypted into language when it leaves the telephone receiver and then the message reaches its destination. The noise, which can interfere or disturb the communication, can have various appearances like for example a bad telephone connection or different languages or cultural backgrounds between source and destination.

Both interpretations of Shannon’s and Weaver’s communication model have a big meaning for the use of communication systems in modern business management, as the later chapters will show more clearly.

A great importance for communication and its understanding has not only the noise which can appear, but also the transmitted message itself, like the model of the communication cube in figure 2.2. shows. This model was developed by Friedemann Schulz von Thun, who expanded and combined the research results of Paul Watzlawick49 and Karl Bühler48. The communication cube is also called “4-side-model” and presents the four levels of a human message, which are always included during the communication of a message.

illustration not visible in this excerpt

Figure 2.2.: Communication Cube

Source:110, translated into English by myself

These levels are the content of the message, the self-revelation (I-message), the relation between the transmitter and the receiver (you-message and we-message) and the appeal (what the transmitter wants the receiver to do.)142. Often not all four levels are considered by both the transmitter and the receiver, which leads to misunderstandings and misinterpretations. Watzlawick states that it is not possible not to communicate49. The communication cube proves this statement, as during the social contact between two people “something” is exchanged, which can be verbal and/or nonverbal.

2.1.3. Classification of communication

Communication can be classified in various ways. Therefore the following list can just be considered as a collection of examples, which have in my own opinion high relevance for the topic of this work.

1. One method is the breakdown of communication into vertical (asymmetric) and horizontal (symmetric) one. This means that the communication takes places between elements which are either not on the same hierarchical level (asymmetric) or on the same hierarchical level.

2. Communication can also be classified as verbal or nonverbal. Thereby verbal includes the words, which we say, and nonverbal communication involves gestures, facial expressions, pitch, volume and intonation. Sometimes nonverbal communication is split up into paraverbal (how we say words) and nonverbal (body language) communication. Scientists estimate that between 80 to 93% of communication is realized by nonverbal communication [3, p.8]128. This amount has a significant meaning for the use of technical communication systems, as the possibilities to use nonverbal communication is quite limited depending on the single communication media.

3. The differentiation into small group and large communication has a great influence on the communication need of modern business since small groups interact and communicate in another way than global enterprises. Therefore requirements of communication systems in enterprises depend in a large scale also on the company’s size. This will be discussed in detail in the next chapter.

4. The time and position components of communication are features which have become very important factors. Communication may be divided into synchronous and asynchronous communication. Synchronous communication happens at the same place, for example a business talk in the office, or takes place over a long distance, for example a telephone call between Poland and Germany. The opposite one is the asynchronous communication, which is normally connected with a location difference, for example an email which is sent to someone and which is saved on a server until this person picks it up. Communication through a blackboard in a company is also asynchronous, as employees will read the information when they pass by and not necessarily immediately after the message has been written down on the board.

2.1.4. Communication scenario

As stated before, communication takes place in form of speech, text, data, graphics, audio and video. These forms can be grouped together into monolog- and dialog-oriented communication modes, as it is visible in figure 2.3. below. Each of these modes has different advantages and disadvantages. A short overview of them is presented in table 2.1..

illustration not visible in this excerpt

Figure 2.3.: Overview of communication modes

Source: [3, p. 8]

The knowledge about these advantages and disadvantages is essential as the different communication modes should be used in modern business depending on their designated impact. [3, p.2] This significant effect will be discussed in a more detailed way in chapters 3 and 4.

illustration not visible in this excerpt

Table 2.1.: form of communication responding to communication media with advantages and disadvantages

Source: [3, p. 11 et sqq.]

2.2. Communication systems

2.2.1. Development and evolution of business communication systems

Communication always takes place between at least two elements, whereby these can be either human beings or machines. The composition of these elements is called communication systems, as the definition of communication system clarifies.

A communication system is an artificial, concrete system, consisting of automatic and natural elements and serves communication. [1, p. 28]

This means that the communication model of Shannon and Weaver, which was presented in the last paragraph, can also be understood as a model for general communication systems. For the application of these systems in modern business the distinction into social and technical communication systems has a very important meaning, but in my work I focus almost only on the technical ones.

The last chapter already pointed out that communication is not an invention of the “new economy“, but has existed since ever. Therefore communication systems have not been developed just within the last years, but have been evolving since the invention of computers at an amazing speed. This development can be divided into several steps.

1. The so called “paperwork-management” was used since the invention of paper, as it was the only media which could be used in a planned and organized way for communication and memorization. With the industrialization in the 18th century planned production and therefore the need of communication increased in the European economy. Marchand and Horton begin their model of paperworkmanagement only with the beginning of the last century. They state that only then was there a real attempt to manage data processing depending on the business differences and law regulations. With the development of the first economically usable computers and other technical inventions in the 1950’s a new period began.

2. The second phase began in the 1950’s and 1960’s when more and more routine management cycles where transferred to computers with the aim at more efficiency and cost reduction. The work processes should become faster and more secure, as now, instead of human beings, machines working without errors were to realize simple routine work. The general aim was a quantitative improvement. These implementations of computers or other kinds of office machines were often carried out by specialists in the respective departments. In this phase the general management of companies did not yet use the communication system for management functions. This development took place mainly on the execution level of companies.

3. In the mid 1970’s the next step in the evolution of communication systems was made. Bigger companies started to introduce new information and communication systems at the management level. This was a consequent development, as the system at this level was aimed at higher management efficiency and at improvement of decisions. [3, p. 29] For the realization of this aim information which could be delivered by the communication system at the execution level was necessary.

4. A logical result of the usage of information and communication systems at the management and execution level was in the mid 80’s the cognition that their utilization can be a competitive advantage. Managers recognized that the information flow in a company has an essential meaning for the company’s success and market position. Therefore companies started systematically to develop such systems. As companies do not have just interior communication, but they exchange at a high degree information with their environment, involving customers, partners, suppliers as well as the government, the information and communication system started as a final step having a strategic meaning.

5. Through the introduction of the Internet in the beginning of the 1990’s to the public, the exchange with other entities became easier. It increased within the last years very much and led to the so called “new economy“. At this moment communication and information systems have an essential strategic meaning for companies, as not only the information flow within the company became important, but also the information flow with others. Enterprises remain competitive only if they can manage the communication standards expected by their suppliers and customers. This development evolved in the standardization of special protocols, which can be valid on a global economic scale, for example the standard UN/EDIFACT (United Nations Electronic Data Interchange For Administration, Commerce and Transport)37 or just in a certain economic branch, for example Odette (Organization for Data Exchange by Tele Transmission in Europe)47, which is a standard for automobile manufacturers and the automobile suppliers industry. Through the standardization more and more processes became intercompany ones, which resulted for example in the so called supply chain management, which aims on an efficient logistic during the production process of goods.

illustration not visible in this excerpt

Figure 2.4.: Development of the information management by Marchand and Horton Source: [114, p. 297] translated into English by myself

The fifth step in the evolution of communication systems and information management has already been reached. Therefore Hansen and Neumann state in their overview on the development of business information systems [6, p. 529] that in the next step, which they define between 2010 and 2020, a complete linking-up of the whole economy will take place and an even more unitised, service-oriented architecture will be used. This architecture will integrate software from different producers, containing higher standardized services [6, p. 532]

2.2.2. Types of communication systems

Communication systems may be divided into four different types, as the definition and their evolution already implies. These are people-to-people, people-to-machine, machine-to- people and machine-to-machine communication systems. The differences between these systems are obvious, but still they are strongly connected together. A simple and clear example would be an email which is send to a business partner. The message of the email is communicated between two human beings. While writing the email a human-computer interaction takes place. When the computer submits the message to the address of the partner a computer-to-computer system is used. In the end the partner reads the message from the monitor, which presents a computer-machine interaction. This example makes clear the strong connections between these four types.

The main aim in business serves the co-operation between different entities, therefore the term “Computer Supported Cooperative Work” is used, which again can be divided into workflow-management-systems and workgroup-systems (groupware). The main difference between these two systems is that workflow-systems are used for the realization of structured business tasks and business processes, whereas “groupware enables the common usage of data and documents”40 in a mainly unstructured way. Figure 2.5. presents the relationship between communication, co-ordination and co-operation in the field of computer supported cooperative work. This thesis deals only with the application of those two systems in modern business.

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Figure 2.5.: Computer supported cooperative work pyramid Source:60

2.2.3. Features of communication systems

For the distinction of communication systems different features can be used. A short overview is presented in table 2.2. below.

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Table 2.2.: Overview about communication features Source: Own creation

In the beginning of the development of communication systems almost every system was a so called isolated or discrete system, which was not able to exchange data with other systems, as this was also not necessary. With the further evolution the need of information exchange increased. By the introduction of interfaces open communication systems developed and led to the convergence of networks. These systems can be integrated or built up in a modular way. They both enable the exchange of different media types and therefore support the human communication behaviour in a better way. Communication systems are strongly oriented at business processes, hence they may be workflow or workgroup oriented, as it was already mentioned in paragraph 2.2.2. .

2.3. Modern Business

2.3.1. Modern Business

Within the last ten, twenty years economy has changed enormously. One can even say that a kind of revolution took place. This revolution may be compared to the industrial revolution in the 19th century and is now called digital revolution. The base for this revolution was the development of the microchip, the growing automation of production and the installation of world wide communication nets, like for example the World Wide Web. This fast development has also led to a completely new kind of economy, called “new economy”, which was and is very much influenced by and dependent on the globalization. Especially the Internet had an enormous meaning for the globalization and therefore also for the rapid development of this new form of economy. The main features of this “new economy“ are the dominance of information and “human capital”. These characteristics became the most important resources, instead of the former dominating raw materials. Now they have an essential meaning for the company’s success and development. The “new economy” has changed the business functionality, processes and management. Thanks to the digital revolution the way of communication has changed as well. This had a big effect on everybody’s life, but even an incredible importance for the “new economy” and the way companies act today. Therefore one can say that enterprises which act in this new economical environment can be called “modern businesses”. The following attributes23 are features which are distinctive for modern businesses:

- Elasticity and a slim company enable them to react fast on ascertained or expected changes in their business environment
- Focus is set on co-operation instead of concurrence
- Intelligence, means a broad utilization of the developed intellectual resources, investment in employees as well as research and development and the creation and usage of economical investigation

These features, which are significant not only for young companies, which have been set up during the so called dot com boom71 or later on, but also for “old” companies which have adjusted themselves to the new conditions request a modern communication and information system. Due to the change in economy the focus in companies has changed as well. Today modern business has to be process-oriented and integrated, which is expressed by the above mentioned factors. This means that a company has to orientate itself on the clients’ demands if it wants to be competitive. As a company normally consists of several different organizational departments or units, necessary is a communication and information system which enables the different departments to communicate, to co-operate and to co-ordinate multipersonal work processes. These three activities [5, p.112 et sqq.]:

- Communication
- Co-operation
- Co-ordination

are necessary for the successful realization of modern businesses. Without them data processing or the process of data processing, which stands for the combination of these three activities, would not be possible in the very effective way, as it can be realized through the usage of information and communication systems. Researches have shown that almost two third of management activities are used in the modern economy for the exchange and transfer of information [5, p. 114]. This amount of time for the process of data processing is necessary, because economical and technical processes became more and more difficult, which requests a higher division of labour as employees are more specialised today. Due to the globalisation companies now act no longer on a national level, but on the international one. For big companies this means that they have subsidiary companies or branches around the globe. However, even small companies can act globally as they reach via the Internet customers beyond national borders. These possibilities for modern business require communication systems which fulfil different needs and requirements for different company types, as the next chapter will clarify.

2.3.1. Modern business and e-business

The term “e-business” can be understood in various ways, as the word business has several meanings in the English language. One possibility is the interpretation as electronic trade through the Internet. A second understanding, which was mainly introduced by IBM, states that it “is any business process that is empowered by an information system”68. With the evolution of the information age the term “e-commerce” was being more and more introduced for electronic trade. Today the “construct” e-business can be seen as the prototype for modern business, which is also shown in figure 2.6. below. It means that different parts like e-commerce, e-procurement or supply chain management, which belong to the main term e-business, can be found in an ideal modern business. The importance of the communication and information system in this ideal company becomes through the model of the e-business once again much more understandable, as the different parts result in a successful company only if communication and information exchange between them is ensured.

illustration not visible in this excerpt

Figure 2.6.: Overview of e-business

Source:122 - translated into English by myself

2.3.2 Fields of modern business

Modern businesses are not solely connected to companies which are active in the field of information technology. Today all companies which use modern communication and information systems are counted as modern businesses. These include businesses in all three economic sectors (first, second, third), which are active for example in the following fields:

- Transportation and logistics
- Medicine
- Counselling
- Agriculture
- Banking
- Insurances
- Automotive engineering

Some examples for these modern companies are DaimlerChrysler, Lufthansa, UPS, Monsanto, Pharmacia, McKinsey, Ernst & Young, Deutsche Bank or Allegro. These companies are not modern business, because they use an information- and communication system within their company structure, but their whole company structure is modern and contains certain features, typical for modern businesses. These features are described in the next chapter.


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Communication Systems in Modern Business Management Structures - Needs, Requirements and Solutions
Wroclaw University of Technology
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Michael Kuhn (Author), 2006, Communication Systems in Modern Business Management Structures - Needs, Requirements and Solutions, Munich, GRIN Verlag,


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