INTERPERSONAL COMMUNICATION AND

RELATIONSHIP MANAGEMENT

B24

INTERNATIONAL UNIVERSITY OF SARAJEVO

2017.
Contents
Abstract .................................................................................................................................... 4
Introduction ............................................................................................................................. 5
Methodology........................................................................................................................ 6
Interpersonal Communication ................................................................................................. 7
Relationship Management ....................................................................................................... 9
Discussion and Conclusion ..................................................................................................... 11
Bibliography ........................................................................................................................... 13
List of Figures:

Table 1...............................................................................................................1

3
Abstract

What differentiates a successful manager from a bad one is often the

communicational abilities the first one has. It is up to managers to act as leaders, to
create visions, implement ideas and convince others that those ideas are beneficial.
Managers work on both external and internal scales, they convince the external world
to engage with their firm and buy their products or services, but they also have the
obligation to create a good atmosphere in the working environment of their firm,
they do that by motivating, respecting, listening and being a role model for their
employees. Trust is the most important thing to strive for in the internal working
environment. Both those scales have been studied by various managerial researches
and certain systematization was done. The external scale was named the relationship
management while the internal scale was named the interpersonal communication
field.

This research tends to make the connection between these two fields and the impact
of both of them on the working environment. The relationship between the managers,
supervisors and the employees were the key parts of this research, as it will be shown
in the upcoming sections.

Key words: Relationship management, Interpersonal Communication.

4
Introduction

Economics is what makes the world work today. As we are living in the capitalistic
era everything is bounded by the maximization of the final profit. Some theories tend
to redefine Capitalism as not being only about profit but also being socially
responsible and making some difference in the world by tending to create a better
environment for all people. Since by some definitions, Capitalism is all about making
profit, statements saying that modern economy is all about making money could
oftenly be heard nowadays. But, is such a statement true? According to the results
published by the Fortune, Walmart was named the most profitable organization in the
world. 1

What is that actually makes Walmart successful? They are a retailing company and
have huge competition in their field, yet they are at the top. The secret is the good
management and organization that the firm has. And this is the case with every firm
in the world, when you have a good leadership you obtain greater results. The
greatness of every manager is observed in the relationships he builds with his
employees and his costumers. Those are two different branches of management, the
first one is studied in a branch called interpersonal communication, while the second
one is the subject of relationship management.

As dr. Amit Kumar Singh defined it, „Interpersonal communication is the process of
transmitting information and common understanding from one person to another,
which is very essential for the success of any organization.“ (Singh, 2014)2

On the other hand, relationship management is „a strategy in which a continous level

of engagament is maintained between an organization and its audience.“,3 both of
these concepts are going to be discussed in detail later.

1
http://fortune.com/global500/ (last accessed on 3.12.17 at 19:54)
2
Singh, D. A. (2014). Role of Interpersonal Communication in Organizational Effectiveness.
3
Investopedia. (n.d.). Investopedia. Retrieved December 4, 2017, from Investopedia:
https://www.investopedia.com/terms/r/relationship-management.asp

5
The main purpose of this research is to gain an insight into some firms operating in
the region of Bosnia and Herzegovina. By gaining such insight one sort of a
differentiation could be made based on the success the firm is having and the
relationship that its management has with the employees in the firm.

The main question of this research is how does the relationship between the
management and the employees affect the working environment and the could there
be a relationship between the good interpersonal communications in a firm and the
results recognition by the management.

Methodology

The main and only methodology used throughout this research is the survey method.
The survey was consisted of a set of seven questions, mainly about the relationships
between the employees themselves and the employees and their managers and
supervisors.

The number of participants in the survey was 42. The survey was done online and
people answering it were from Bosnia and Herzegovina, working in various fields
and organizations. This differentiation was done on purpose, to have a better
overview of the working environment in different fields.

6
Interpersonal Communication

Communication is by far one of the most important characteristics of a human being.

Humans have been communicating even in the oldest sources discovered, whether
that was by drawings, writings, letters, the important thing that communication was
always used. It was used to express feelings at the beginning, but nowadays
communication has a broader definition.

From a managerial point of view, every business starts with an idea, and as humans
are communicative beings they tend to exchange ideas, they do that by
communication. As a firm is being founded some mission and vision statements are
defined within it, and employees need to know those information so they can adapt to
it. Communication is a necessary thing in life, but it is extremely important in
managerial skills.

The importance of interpersonal communication occurs in many managerial aspects.

Donnell King from the Pellissippi State Community College defined in his work four
principles of interpersonal communication, he listed them as following: it is
inescapable, irreversible, complicated and at last, it is contextual.4

Communication is inescapable, the human being can not choose not to communicate,
it is in his nature. It is also irreversible, once a person says something he can not take
it back, it is like an arrow heading to its target. Communication is also defined as
complicated, according to King, once a communication takes place at least six
“persons” are taking part in it: 1. Who you think you are. 2. Who you think the other
person is. 3. Who you think the other person thinks you are. 4. Who the other person
thinks he/she is. 5. Who the other person thinks you are. 6. Who the other person
thinks you think he/she is.

4
King, D. (n.d.). Pellissippi State Community College. Retrieved 12 4, 2017, from Pellissippi State
Community College: http://www.pstcc.edu/facstaff/dking/interpr.htm
7
The last principle of interpersonal communication is that it is contextual, and based
on the work of King, communication can not take place in isolation, it has various
contexts, which are as following:

1. Psychological: refers to the personal desires, needs and wants that a person brings
into the communication.

2. Relational context: refers to the reactions towards the other participants in the
communication process.

3. Situational context: refers to the placement in which the communication occurs, as

well as the psycho-social environment.

4. Environmental context: deals with the physical environment in which the

communication is taking place, it can be various from furniture to the temperature.

5. Cultural context: all behaviors, norms and traditions that affect the communication
are obtained in this context.

Those were key factors which managers have to think about when developing a
successful interpersonal communication in their work environment. On the other
hand, these factors could be very helpful in many managerial fields, according to
Deepa Sethi, there are four key organizational fields in which interpersonal
communication is very helpful. They are: management, sales, training, conflict
resolution. 5

5
"The IUP Journal of Soft Skills"; The Interpersonal Communication: Lifeblood of an Organization;
Deepa Sethi, et al.; 2009
8
Relationship Management

Relationship management is the way a company builds communication with its

customers, partners and competition. If interpersonal communication is defined as an
internal process then relationship management can be defined as the external
communication of a firm, or an extropersonal communication.

There is much more communication between firms than pure transactions and money
transfering, one of the important managerial skills is the ability to attract customers
and that is done by responding to their needs and wants. Such a thing can not be done
without a constructive and effective communication between the firm and the
customers and that is what defines the spirit of a successful relationship management.

Besides having loyal customers by responding to their needs, relationship

management shows to be important when it could offer solving a problem in the
market even before it occurs, because of the various feedbacks the firm has.

Based on the main goal of the relationship management it could be divided into to
main branches: customer relationship management and business relationship
management. 6

As the name itself says, customer relationship management is about maintaining a

good relationship with the customers. This can be obtained by several market and
sale analysis’ as well as the personal communications with the costumers. A big part
in developing a good customer relationship management is played by the marketing
department, which is the main communicative figure between the management of a
certain firm and their customers. Managers are not those who respond to customers’
needs but they make decisions based on the feedback and data marketing managers
deliver them.

On the other hand business relationship management is a successful relationship

between the management of a certain firm and other businesses in the field.

6
Investopedia. (n.d.). Investopedia. Retrieved December 4, 2017, from Investopedia:
https://www.investopedia.com/terms/r/relationship-management.asp
9
Every business, whether it was a service firm or a merchandiser, has had to have
relationships with other firms such as vendors, suppliers, distributors and franchisers.

For a business to succeed it has to have successful business relationships with other
firms, and for such relationships to succeed they have to be based on mutual
agreement and on the benefit for both sides. Also, it is very important to not break
the deals made and to keep the trust between the firms.

In a case of a business relationship between two firms it could be viewed as an

ordinary customer relationship but on a bigger scale, as one of the firms will always
play the role of the customer, because in such relationships one firm often obtains
services or merchandise from the another one. When this is happening the first firm
is treated as the customer while the other firm is treated as the seller or service
provider. No matter how this relationship is viewed it will have the same rules as the
customer relationship management, because the main goal is the mutual benefit and
satisfaction of needs.

10
Discussion and Conclusion

As it is already described in the introductory part of this paper the main goal of this
paper was to analyze the real world working environment in the matters of
interpersonal relationships and its affection on the relationship management of the
firm.

This section is devoted to the analysis of the results that were obtained from the
survey during the research.

The survey was designed according to Likert scales, with five possible answers
ranging from totally disagree up to totally agree. The questions were not formulated
in their usual form but in the form of several statements.

As already mentioned, the survey consisted of seven questions, which were as

following:

1. In my working environment employees treat each other with respect.

2. Senior management and employees trust each other.

3. My coworkers and I have a good working relationship.

4. My supervisor and I have a good working relationship.

5. My hard and quality work is recognized from my management.

6. I am able to make decisions affecting my work.

7. In my working environment, employees trust their supervisors.

A total of 42 people took the survey, and the results were as shown in the upcoming
table:

11
 Question Totally Disagree Neutral Agree Totally
no. disagree Agree
1 2.4% 2.4% 26.2% 31% 38.1%
2 4.8% 4.8% 33.3% 35.7% 21.4%
3 2.4% 0% 21.4% 42.9% 33.3%
4 2.4% 7.1% 7.1% 47.6% 35.7%
5 4.8% 14.3% 26.2% 28.6% 26.2%
6 4.8% 16.7% 14.3% 35.7% 28.6%
7 7.1% 4.8% 28.6% 35.7% 23.8%
Table 1

As it can be seen from the results, the biggest percentage was gained on question
number 4, where almost half of the questioned people answered that they agree that
they have a good working relationship with their supervisors. The fact that confirms
this statement is that 35.7% agree that their supervisors are trustable in their working
environment, while 23.8% state that they totally agree to the earlier statement. This
gives an insight into a very healthy working environment where the relationship
between the managers and the employees is very successful and trustworthy. A
respectful working environment could also be deduced based on the survey results,
where 38.1% stat that they are working in an environment where employees treat
each other with respect. There is a slight problem that occurs when analyzing the
survey, according to the results, 16.7% of the questioned feel that they are not having
the freedom of making decisions that affect their work, based on that it could be
deduced that either certain managers are old schooled and propose only a certain
way of doing things with a lack of creativity, or that the nature of the working
environment is such that there is no decision making in the process of the
employment. Nevertheless, the results show a healthy interpersonal relationship
within the firms and good sense of relationship management from the managerial
bodies, which concludes this research as a small study that showed that on a small
scale results could be satisfying, and if such a research had a greater impact some
serious managerial problems would probably occur.
12
Bibliography
(2016). The Global 500. Fortune.

Investopedia. (n.d.). Investopedia. Retrieved December 4, 2017, from Investopedia:

https://www.investopedia.com/terms/r/relationship-management.asp

King, D. (n.d.). Pellissippi State Community College. Retrieved 12 4, 2017, from Pellissippi
State Community College: http://www.pstcc.edu/facstaff/dking/interpr.htm

Sethi, D. (2009). The Interpersonal Communication: Lifeblood of an Organization. The IUP

Journal of Soft Skills.

Singh, A. K. (2014). Role of Interpersonal Communication in Organizational Effectiveness.

International Journal of Research in Management & Business Studies, 36.

13