CH 7

BUSINESS STUDIES – 12TH S.
SHEKHAR
CH – 7 : DIRECTING
MEANING
Directing is the process in which a superior provides instructions, guidance and

counselling to its subordinate so as to motivate and lead them for the successful
achievement of objectives.
Characteristics of Directing
 Initiates action: Directing initiates action through instructions supervision and
motivation to achieve goals.
 All pervasive: Directing takes place in every organization, and at every level of
management.
 Continuous process: Directing is a continuous process and takes place
throughout the life of an organization.
 Flows downward: Directing flows downward from superior to subordinate.
Importance of Directing
 Initiates action: Directing helps to initiate action towards attainment of
desired objective.
 Integrates efforts: It integrates individual efforts as group effort to achieve
organizational objectives.
 Provide leadership and motivation; Directing motivates and provides
effective leadership to employees to realise their full potential.
 Brings changes: Directing introduces changes in the organization through
proper communication, motivation and leadership.
 Maintain stability: Balance and stability in the organization could be
maintained through effective directing.
Principles of Directing
1. Maximum individual contribution: Through effective directing a manager must
help the employee to realise his full potential, and contribute maximum towards
the achievement of organizational goals.
2. Harmony of objectives: Through effective directing, managers must provide
harmony between employee’s individual objectives and organizational
objectives.
3. Unity of command: Employees must get instructions and direction from one
superior for effective directing.
4. Appropriateness of direction technique: A manager must choose different
direction tools according to the situation for effective direction.
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BUSINESS STUDIES – 12TH S.SHEKHAR
5. Managerial communication: Communication should be in accordance with

subordinate need for effective direction.
6. Use of informal organization: For effective direction managers should use
informal organization for building cordial relationships with subordinates.
7. Leadership: A manager must possess good leadership qualities to influence
subordinates.
8. Follow through: Manager must review employee’s performance for effective
directing.
Elements of direction
These are grouped into four categories:
 Supervision
 Motivation
 Leadership
 Communication
SUPERVISION
 Supervision involves overseeing and guiding the efforts of human and other
resources with an objective to accomplish the desired objectives.
 It means overseeing what is being done by subordinates and giving instruction
to ensure optimum utilisation of resources and achievement of work targets.
Importance of Supervision
 Supervisor maintains friendly relationships with workers.
 Connects management plans and ideas to workers and represents workers
grievances and problems to management.
 Helps to maintain unity amongst workers.
 By giving instructions and motivating workers helps in achievement of targets.
 Provides training to the workers and builds them as an efficient and skilled team
of workers.
 Helps in bringing out untapped energies of employees and builds up high
morale.
 Suggests ways and means to develop new skills.
MOTIVATION
A stimulator used by managers to make people act in a desired way to achieve

organizational goals.
The Related terms in motivation are:
 Motive: It is the inner state of an individual which directs his behaviour towards
a goal.
 Motivation: It is the process of stimulating people into action.

 Motivators: These are The techniques used for motivating people.
Features of Motivation
1. Motivation is an internal feeling: It is the urge or desire to satisfy needs or
wants which influences human behavior.
2. Motivation produces goal-directed behaviour: All actions are directed to
achieve specific goals.
3. Motivation may be positive or negative: Positive motivators are like high
salaries that influence constructively while negative motivators are like
punishments that inculcates fear in the employees.
4. Motivation is a complex process: It involves dealing with people of different
types and expectations.
MOTIVATION PROCESS
Unsatisfied need
↓
Tension
↓
Drives
↓
Search behavior
↓
Satisfied need
↓
Reduction of tension
a. Unsatisfied Want: The motivation process begins with an individual's

unsatisfied need.
b. Tension: As the desire goes unsatisfied, frustration builds up in the individual's
mind.
c. Motives/Drives: Frustration motivates the individual to seek out alternatives to
meet his needs.
d. Search Behaviour: He selects one of several options and begins acting in
accordance with it.
e. Satisfied Needs: After a period of time, he evaluates whether or not his need
has been met.
f. Reduced Tension: Once the need is met, the individual's frustration and tension
are relieved.
Example: Assume a person wishes to advance in his or her career. This makes him
uneasy, and he begins to look for other ways to advance in his career. He may consider
working harder and bettering his performance. After consistently working hard, he may
receive recognition and a promotion, which will finally satisfy his desire and alleviate
his frustration.
Importance of Motivation
1. Improves Performance: It satisfies employee’s needs resulting in higher level
of performance contributing towards organizational goals.
2. Develops a positive attitude: Motivation techniques eliminate negativity and
create a desire to realize maximum potential.
3. Reduces employee turnover: A satisfied employee prefers to remain loyal to
the organization leading to a lesser number of people quitting the organization.
4. Reduces absenteeism: Motivation helps to make the workplace a source of
pleasure and provides the workers with a pleasant experience resulting in
increased level of commitment from employees towards work.
5. Brings change smoothly: A motivated staff accepts changes with much lesser
resistance.
Maslow's Need Hierarchy Theory of Motivation

This theory was given by Abraham Maslow in 1943, and is based on human needs.
Assumptions
 Satisfaction of needs influences people's behaviour.
 Needs are in hierarchical order.
 Once need is satisfied only, the next higher need can motivate individuals.
 Satisfaction of lower-level needs motivates to move to the next level of need.
Hierarchy of needs
According to Maslow need hierarchy theory, employees need and wants can be
categorised as a hierarchy of five needs:
1. Basic Physiological Needs: It includes basic needs like hunger, thirst, shelter,
sleep, etc.
2. Safety/ Security Needs: It includes needs of security and protection like job
security, etc.
3. Affiliation/ Social/ Belonging Needs: It includes needs like affection, sense of

belongingness, friendship, etc.
4. Esteem Needs: It includes needs like self respect autonomy, status, recognition,
etc.
5. Self Actualization Needs: It includes needs that drive to realize a dream.
Financial and Non Financial Incentives

 Incentives are the means to satisfy an employee's needs and motives. These can
be:
 Financial
 Non-Financial
Financial Incentives
Incentives offered to employees which are either in direct monetary form or can be
valued in monetary terms.
Types of Financial Incentives

1. Pay and allowances: These include salary, dearness allowance and other
allowances paid to employees.
2. Productivity linked wage incentives: Wages paid at different rates to increase
productivity.
3. Bonus: Incentive offered above the wages or salary.
4. Profit Sharing: Providing a fixed percentage of profit to employees.
5. Co-partnership/ Stock option: Shares offered to employees at a price which is
lower than the market price.
6. Retirement benefits: Benefits offered after retirement such as provident fund,
pension, etc.
7. Perquisites: Benefits over and above the salary offered such as car allowance,
housing, medical aid, etc.
Non-Financial Incentives
Incentives which are given to provide psychological and emotional satisfaction rather
than monetary satisfaction.
Types of Non-Financial Incentives

1. Status: It is the level of authority, responsibility and recognition an employee
commands in the organization.
2. Organizational climate: Characteristics influencing an individual's behaviour
such as individual autonomy, reward orientation, consideration to employees,
etc.
3. Career advancement opportunity: Opportunities of growth and development in
the organization to the higher level.
4. Job enrichment: It refers to a variety of work offered to challenge the

knowledge and skills of highly motivated employees.
5. Employee recognition programmes: It involves recognising and appreciating
the contribution of employees in public.
6. Job security: It refers to the certainty and stability offered in a job about future
income and work.
7. Employee participation: Involvement of employees in the decision making
process, seeking their advice or suggestions.
8. Employee empowerment: Opportunities provided to employees to take
decisions independently and perform jobs assigned to them.
LEADERSHIP
Leadership is the process of influencing the behaviour of people in such a way that
they voluntarily work towards the achievement of organizational objectives.
Features of Leadership
 It is the ability of an individual to influence others.
 It tries to transform the behaviour of the subordinates.
 It indicates interpersonal relationship between leader and followers.
 It is exercised to achieve organizational goals.
 It is a continuous process.
Importance of Leadership
 It influences people's behavior to have a positive attitude.
 It provides opportunities to subordinates to fulfill their needs and wants and
build confidence.
 It helps employees in understanding the need for changes and introduction of
changes smoothly.
 It clarifies and eliminates conflicts effectively through healthy discussions.
 It trains and develops employees to handle managerial work.
Qualities of a Good Leader

1. Physical features: Should be fit and presentable with positive energy.
2. Knowledge: Should have required knowledge and competence.
3. Integrity: Must possess a high level of integrity and honesty.
4. Initiative: Should grab opportunity and use it to the advantage of organization.
5. Communication skills: Must possess skill to communicate and convince people
effectively.
6. Motivation skills: Should motivate the individuals to improve their
performance.
7. Self confidence: Should have a high level of confidence to handle difficult

situations.
8. Decisiveness: Should be decisive and remain firm on decisions.
9. Social skills: Should be social and friendly with his colleagues and subordinates.
Leadership Styles
1. Autocratic leadership: in this style of leadership, a leader takes all the
decisions on his own and gives orders to his or her subordinate to implement
them.
2. Democratic leadership: In this style of leadership a leader takes decisions after
consulting with subordinates and encourages them to participate in decision
making.
3. Laissez faire leader: In this style of leadership a leader gives freedom to his
subordinate to take decisions and execute work assigned to them and the
leader acts as observer or guide.
COMMUNICATION
It is the process of exchange of information between two or more people with an aim
to create common understanding.
Elements of Communication Process
1. Sender: The person who conveys his thoughts or ideas.

2. Message: Content intended to be communicated.
3. Encoding: Process of converting message into communication.
4. Media: Path through which an encoded message is transmitted to the receiver.
5. Decoding: It is the process of converting the encoded message in a readable
format.
6. Receiver: The person who receives a communication message from the sender.
7. Feedback: It refers to the information or suggestions provided by the receiver to

the sender in context to the communication or message he received.
8. Noise: The hindrances and obstruction to communication.
Importance of Communication
1. Basis of coordination: Acts as a basis to coordinate their efforts of employees
by explaining organizational goals.
2. Smooth working of an enterprise: It makes interaction among all individuals
possible helping smooth and unrestricted working of an enterprise.
3. Basis of decision making: Communication acts as a medium for providing
information needed for decision making.
4. Increases managerial efficiency: Helps managers to convey important
information to subordinates to enable them to perform with efficiency.
5. Cooperation and industrial peace: The two way communication promotes
cooperation and mutual understanding between the management and workers.
6. Effective leadership: Effective communication enables a manager to lead and
influence his or her subordinate.
7. Boosts morale and provides motivation: Managers understand and satisfy
employees' needs and motives by effective communication.
Formal and Informal Communication

 The process of communication within an organization may be
 Formal or
 Informal.
Formal communication
 It flows through official channels designed in the organization chart to
communicate official information between employees.
 Formal communication is classified as:
 Vertical communication: It is the formal two-way communication
between superior and subordinate and the communication flows upward
or downward.
 Horizontal communication: It is the formal two-way communication
between employees working at the same level of authority.
Formal Communication Networks
 Single chain: Communication flows from superior to his immediate subordinate.

 Wheel: Superior acts as a hub of information and all subordinates communicate
commun
through the superior only.
 Circular: Employees communicate with his or her adjoining people.
 Free flow: All employees are free to communicate with each other without any
restrictions.
 Inverted V: An employee communicates with his or her immediate superior but
may also communicate with his/her superior’s superior.
Informal communication
 Communication between employees who are not officially related to each other
is called informal communication, tthishis type of communication may flow in any
direction thus it is also called 'grapevine'.
 The informal communication spreads information rapidly and sometimes
generates rumors.
Grapevine Network
Grapevine communication, also known as informal communication, is a communication
that develops as a result of social interaction among employees and spreads without
following the formal communication path. The types of grapevine communication
networks are as follows.
 Single Strand Network: An employee communicates with other employees in

sequence. That is, one person communicates with another, who then
communicates with yet another. Hence, information is passed through a line of
persons.
 Gossip Network: In a gossip network, one person spreads information to a
large number of people. An employee communicates with all on a selective
7.
basis. Such as gossip about the new employee who recently joined the
organization etc.
 Probability Network: In a probability network, an individual shares information
with other people at random. That is, the individual is unconcerned about who
he shares the information with.
 Cluster Network: Information in this network is first shared between two people
who trust each other. One of them then passes the information on to another,
who then passes it on to another, and so the information spreads.
Barriers to Communication
A. Semantic Barriers:
Problems and obstructions in the encoding and decoding of messages into words or
impressions.
Reasons of semantic barriers are:
 Badly expressed message: It involves the message with inadequate vocabulary,
use of wrong words, omission of important words, or framing the message
improperly, etc., that may distort the understanding and readability of the
message.
 Symbols with different meanings: Words with multiple meanings may change
the intended meaning of the message, such as idol and idle, the word value
having two meanings(price and importance), deer and dear.
 Faulty translations: Incorrect translations may change the meaning of the
message. For example, the meaning of certain words may change in a
translation of an instruction from English to Hindi.
 Unclarified assumptions: Sender and receiver may follow different assumptions
while understanding the message resulting in different understanding of the
message.
 Technical jargon: Meaning of a message may not be clear if technical words are
used in the communication with the workers who may not be familiar. For
example the word drawings have separate meanings for a commerce person and
a person from non-commerce background.
 Body language and gesture decoding: Mismatch between body movement or
gestures may convey wrong meaning. As in your face expression reveals anger,
while your hand movements reveal otherwise.
B. Psychological Barriers:
Sender or receiver's state of mind may influence the meaning of the message.
Reasons of psychological barriers are:
 Premature evaluation: Judgemental or biased nature of the receiver may result
in premature evaluation. For example the listener/receiver may assume in
advance that his boss is going to shout at him, this may lead to biasness in
listening.
 Lack of attention: Sender's or receiver’s pre-occupation of mind with other

thoughts may result in ineffective communication.
 Loss by transmission and poor retention: Passing of messages through
various levels of communication and poor retention may result in transmission
of inaccurate information.
 Distrust: Distrust between sender or receiver may distort information.
C. Organizational Barriers:
Organizational authority relationships, rules and regulations, may result in
communication barriers.
Reasons of organizational barriers are:
 Organizational policy: Policies may not support free flow of communication.
 Rules and regulations: Strict rules and regulations may result in delay of
information, such as following a certain path for communication etc.
 Status: A status conscious manager, hampering the effectiveness of
communication between him and his subordinates.
 Complexity in organizational structure: organization with too many levels may
result in delay or distort of communication due to several filter points.
 Organizational facilities: Improper facilities may affect free flow of
communication and may create problems. A free and effective flow of
communication requires the presence of certain organizational facilities such as
social gatherings, complaint boxes, and transparency in operations, etc. The
absence of such facilities hinders the flow of information
D. Personal Barriers:
These barriers arise due to the personal factors on the part of both, the sender and the
receiver which may affect effective communication.
Reasons of personal barriers are:
 Fear of challenge to authority: Superior may not share any information with
the subordinates that may affect his authority.
 Lack of confidence of superior on his subordinates: Sometimes superiors
aren’t confident enough about their subordinates, and hence he may not
welcome any take suggestions or opinions given by the subordinates.
 Unwillingness to communicate: Subordinates unwillingness to communicate
with their superiors may lead to ineffective communication.
 Lack of proper incentives: Lack of incentives may discourage employees from
taking initiative or sharing information.
Measures to Improve Communication Effectiveness

 Clarify the ideas before communication: Superiors must have a clear and
detailed understanding of the message before it is communicated to the
subordinates.
 Communicate according to the needs of the receiver: Sender must consider

receiver's education, knowledge and understanding level while communicating
message.
 Consult others before communicating: Superiors must involve subordinates
while taking decisions and making plans for effective communication.
 Be aware of languages, tone and content of message: Sender must use
proper language and tone while transmitting message to the receiver.
 Convey things of help and value to listeners: Sender must consider the
interests and needs of the receiver while transmitting messages.
 Ensure proper feedback: Feedback from receiver ensures that the message is
received or understood with the same intended meaning.
 Communicate for present as well as future: Superiors must communicate with
the subordinates about the present and future goals of the organization.
 Follow ups: Regular follow ups and reviews make communication effective.
 Be a good listener: Communicator must be a patient and attentive listening to
understand the receiver’s problem related to understanding and implementing
message
MULTIPLE CHOICE QUESTIONS

1. Directing is the function of
a) Top level management
b) Middle level management
c) Lower level management
d) All of the above
2. Which of the following is not an element of directing?
a) Communication
b) Leadership
c) Controlling
d) Motivation
3. Directing involve flow of order in the
a) Upward direction
b) Downward direction
c) Horizontal direction
d) Circular direction
4. Which of the following is not a feature of directing?
a) Motivating employees
b) Instructing employees
c) Guiding employees
d) Controlling employees
5. Supervisor acts as a link between
a) Workers and top management

b) Workers and middle management
c) Workers and middle management
d) Middle and top management
6. Directing means issuing
a) Orders
b) Instructions
c) Commands
d) All of these
7. Supervisor act as a link person between
a) Workers and top management
b) Workers and middle management
c) Workers and lower management
d) Middle and top management
8. Who is the father of need hierarchy theory of motivation?
a) A. H. Maslow
b) F. Herzberg
c) W. G. Scott
d) Peter F Drucker
9. Which of the following is not a type of semantic barriers?
(a) Badly expressed message
(b) Unclarified assumptions
(c) Technical jargon
(d) Premature evaluation
10. Which of the following is not an element of directing?

(a) Supervision
(b) Communication
(c) Leadership
(d) Inspection
11. It is defined as the process of guiding the efforts of employees and other
resources to accomplish the desired objectives.
(a) Supervision
(b) Communication
(c) Leadership
(d) Inspection
12. These needs are most basic in the hierarchy of motivation theory and
correspond to primary needs.
(a) Self Actualisation Needs
(b) Basic Physiological Needs
(c) Security Needs

(d) Belonging Needs
SHORT ANSWER TYPE QUESTIONS
Q1 What is meant by directing?

Ans. Directing is the process of instructing, guiding and inspiring people in the
organisation to achieve its objectives.
Q2 Give any two elements of directing.

Ans. (i) Supervision
(ii) leadership.
Q3 State any one characteristic of directing.

Ans. Directing helps to initiate action by the people in the organisation towards
attainment of desired objectives.
Q4 Define supervision.
Ans. Supervision means instructing, guiding and monitoring the subordinates to
ensure that they perform their jobs in accordance with the plans and
instructions.
Q5 How does a supervisor act as a linking pin between management and

the operatives?
Ans. A supervisor acts as a link between management and operatives as he
conveys management ideas to the workers, on one hand and workers’ problems
to the management, on the other.
Q6 Give any two examples of employee recognition as a non-financial

incentive.
Ans. Two examples of employee recognition are:
(i) Installing awards or certificate for best performance.
(ii) Displaying on the notice board or in company news letter about the
achievement of employee.
Q7 Give any two characteristics of organisational climate that influence the

behaviour of individuals and act as a non-financial incentive.
Ans. Characteristics of organisational climate are:
(i) Reward orientation
(ii) Individual autonomy
Q8 Why is motivation called a complex process?
Ans. Motivation is a complex process as individuals are heterogeneous in their

expectations, perceptions and reactions. Different people have to be motivated
differently as any one type of motivation cannot have a uniform effect on all the
members.
Q9 What is meant by motivation?

Ans. Motivation is the process of stimulating people to act voluntarily to
accomplish desired goals.
Q10 What is meant by ‘democratic style’ of leadership?

Ans. A democratic leader provides freedom of thinking. He listens to the
suggestions, grievances and opinions of the subordinates.
Q11 What is meant by decoding as an element of communication?

Ans. Decoding is the process of converting encoded symbols of the sender.
Q12 What is meant by feedback in the concept of communication?

Ans. The action of the receiver, which reciprocates to the sender of the
message, that he has understood the message in its true sense is called
feedback.
Q13 What is meant by encoding as an element of communication?

Ans. The sender translates the message into words, symbols, gestures or other
symbols, which he feels, he will make the receiver understand the message. This
is known as encoding of message.
Q14 Define formal communication.

Ans. Formal communication refers to the official communication which takes
place through the chain of command
Q15 What is meant by informal communication?

Ans. Informal communication is the communication that takes place without
following the formal lines of communication.
LONG ANSWER TYPE QUESTIONS
Q16 What is directing? State the importance of directing.

Ans: Directing is the process in which a superior provides instructions, guidance
and counselling to its subordinate so as to motivate and lead them for the
successful achievement of objectives.
Importance of Directing
 Initiates action: Directing helps to initiate action towards attainment of
desired objective.
 Integrates efforts: It integrates individual efforts as group effort to achieve
organizational objectives.
 Provide leadership and motivation; Directing motivates and provides
effective leadership to employees to realise their full potential.
 Brings changes: Directing introduces changes in the organization through
proper communication, motivation and leadership.
 Maintain stability: Balance and stability in the organization could be
maintained through effective directing.
Q17 Discuss the hierarchy of needs as suggested by A. Mashlow.

Ans: According to Maslow need hierarchy theory, employees need and wants can be
categorised as a hierarchy of five needs:
1. Basic Physiological Needs: It includes basic needs like hunger, thirst, shelter,
sleep, etc.
2. Safety/ Security Needs: It includes needs of security and protection like job
security, etc.
3. Affiliation/ Social/ Belonging Needs: It includes needs like affection, sense of
belongingness, friendship, etc.
4. Esteem Needs: It includes needs like self respect autonomy, status, recognition,
etc.
5. Self Actualization Needs: It includes needs that drive to realize a dream
Q18 Exxplain the meaning and any three characteristics of directing.

Ans. Directing refers to the process of instructing, guiding, counselling,
motivating and leading people in the organisation through effective
communication, so that their efforts result in achievement of organisational
objectives.
Characteristics of directing are as follows:
(i) Initiating process It involves giving orders and instructions to the employees
and thereby decisions are converted into actions.

(ii) Pervasive function The directing function is performed by all managers at
all levels to achieve the organisational goals.
(iii) A continuous process It is an activity that takes place throughout the life of
an organisation, irrespective of people occupying managerial position.
Q19 Directing is the heart of the management process. Give any four reasons in
support of your answer.
Ans. Directing may be regarded as the heart of the management process; Its
importance may be explained under the following points
(i) Initiates action Directing helps to initiate action by people in the organisation towards
attainment of desired objectives, e.g. if a supervisor guides his subordinates and clarifies
their doubts in performing a task, it will help workers to achieve work targets given to
them.
(ii) Integrates employees’ efforts Directing integrates employees’ efforts in the
organisation in such a way that every individual effort contributes to the attainment of
organisational objectives. Thus, it ensures that the individuals work for organisational
goals.
(iii)Improves efficiency Directing guides employees to fully realise their potential and
capabilities by motivating and providing effective leadership. A good leader can always
identify the potential of his employees and motivate them to extract work up to their
potential.
(iv)Brings balance and stability in the organisation Effective directing helps to bring
stability and balance in the organisation since, it fosters cooperation and commitment
among the people and helps to achieve balance among various group activities and the
departments.
Q20 Describe the importance of supervision in directing function of

management.
Ans. Importance of supervision are as follows:
(i) Ensures performance of work The supervisor makes sure that all the
instructions are communicated to each and every employee.
(ii) Optimum utilisation of resources Under supervision, all the activities are
closely monitored. In this situation, better utilisation of resources is achieved.
(iii) Acts as a link between workers and management Supervisor conveys the
management’s ideas to the workers on one hand and workers problems to the
management on the other, thus acting as a linkpin.
(iv) Plays a leadership role While guiding the employees, the supervisor
encourages and motivates the subordinates to perform at the best of their
ability, by good leadership.
(v) Provides feedback to the workers During supervision, a supervisor is
always in direct contact with his subordinates. As a result, ideas, suggestions,
complaints, etc of employees with regard to managerial decisions are
continuously received by the supervisor. He also gives feedback to workers on
how to improve there work.
Q21 Define motivation. How does it improve efficiency and facilitate the
accomplishment of organisational goals?
Ans. It is the process of stimulating people to act voluntarily to accomplish desired
goals.
In other words, motivation refers to the way a person is enthused at work to intensify his
willingness to use his potentiality for the achievement of organisational objectives. It is
through motivation that managers attempt to inspire the employees to work for the
organisation.
According to William G Scott, ‘Motivation means a process of stimulating people to
action to accomplish desired goals’.
Motivation improves the efficiency The level of performance of employees depends
not only on individual abilities but also his willingness to achieve a high level of
performance. Motivation induces employees to work better and to use their full potential.
Thus, motivation helps in increasing productivity and overall efficiency.
Motivation facilitates the accomplishment of organisational goals Management can
achieve the goals effectively by motivating the subordinates. The motivated employees
contribute to the fulfillment of the assigned tasks with their best efforts. In the existence
of an effective system of motivation, the worker cooperate voluntarily with the
management towards the accomplishment of organisational goals
Q22 Explain any four non-financial incentives.

Ans. To satisfy the social and psychological needs, non-monetary incentives are
needed.
Various types of non-financial incentives are as follows:
(i) Job security Generally, workers prefer security of job. It is an assurance by the
employer that the worker will continue in the employment. It eliminates uncertainty about
the earnings and job and have a positive impact on the efficiency.
(ii) Participation in management’s decisions The active participation of workers and
their representatives in decision-making helps in securing cooperation and commitment
of workers towards organisational goals.
(iii) Employee recognition It is one of the most important motivator. It helps in
improving the attitudes of employees and at the same time, motivates them to put their
best efforts. Efficiency and innovations of the workers should be recognised and praised.
Recognition can be given by appreciating the work, installing awards and certificates,
display of achievements on the notice board, etc.
(iv) Job enrichment Assignment of challenging Jobs is a significant non-financial
incentive.Assignment of challenging work to subordinates provide opportunities for
maximum development ‘ and helps them to reach upto the point of self-realisation.
(v) Status In the organisation context, status means ranking of positions in the
organisation. The status of a person is reflected in his authority, responsibility, pre-
requisites and recognition. Psychological, social and esteem needs of an individual are
satisfied by status.
Q23 .Leadership is an essential element of directing. State any four reasons, why it
is essential?
Ans. Leadership is considered as the most important element of directing function
because of the following reasons:
(i) Effective direction An organisation comes into existence with certain objectives. To
attain the objectives, the activities of the Organisation must be directed. Direction of the
activities is effected through leadership. In short, effective leadership directs the
activities of an organisation towards the attainment of the specified organisational goals.
(ii) Source of motivation Effective leadership motivates the subordinates to contribute
their energies for the benefit of the organisation.
(iii) Provide confidence Leadership creates confidence in the subordinates by giving
them proper guidance and advice.
(iv) High morale Good leadership increases the morale of the employees which in turn,
contributes to higher productivity.
(v) Development of team spirit Effective leadership promotes team spirit and team
work which is quite essential for the success of an organisation.
Q24 What is meant by leadership? Describes any four qualities of a good leader.
Ans. Leadership is an attempt aimed at influencing people directly towards the
attainment of given goals. Leadership may also be defined as an art or process
of influencing people so that they will strive willingly and enthusiastically
towards the achievement of group goals.
In the words of Louis A Allen, ‘A leader is one who guides and directs other
people. A leader gives the efforts of his followers a direction and purpose by
influencing their behaviour’.
Qualities of a good leader
Qualities of a good leader are as follows:
(i) Knowledge A good leader should have required knowledge and competence.
Only such person can instruct subordinates correctly and influence them.
(ii) Initiative A leader should have courage and ability to take initiative. He
should not wait for opportunities to come to his way, rather he should grab the
opportunities and use it to the advantage of organisation. .
(iii) Integrity A leader should possess high level of integrity and honesty. He
should be a role model to others regarding the ethics and values.
(iv) Sound physique A good leader must have good health and physical fitness.
He requires tremendous stamina and urge for hard work.
Q25 Explain any three personal barriers to effective communication.

Personal barriers to effective communication are-
(i) Lack of confidence of superior in his subordinates If superiors have no
confidence and trust in their subordinates, then they pay no attention to their
advice, opinion or suggestions.
(ii) Lack of incentives If there is no incentive for communication, then
subordinates may not take initiatives to give suggestions, e.g. if there is no
reward given for giving some good suggestion, then employees will take no
initiative to give good suggestions.
(iii) Fear of authority Some superiors may modify feedback going from lower-
level employees. This may be done especially if the feedback is a complaint
directed against the superior. The dishonest superior may block complains
reaching to senior management in order to prevent challenge from authority. In

other words, sometimes superiors conceal and hide information if they have fear
of losing their authority over the subordinates.
Q26 Explain any three organisational barriers to effective communication.

Ans. Organisational barriers to effective communication are:
(i) Organisational policy If organisational policy does not support free flovv of
information, it may result in barriers, e.g. in centralised organisation, most of
the information remains at top level only. People at lower level may not be able
to communicate freely in centralised organisation.
(ii) Status Sometimes the people working at higher level do not believe in the
information supplied by lower level employees as they feel how would he know
about my job and who is he giving suggestions. .
(iii) Rules and regulations Rigid rules and regulations may also create barriers
as following rules may lead to red tapism, delay of action and delay in
movement of information.
Q27 Describe the role of communication in the directing function of

management.
Ans. Yes, communication plays a key role in the directing function of
management.
The communication is an important element of directing because of the
following points:
(i) Acts as a basis of coordination and cooperation Communication acts as a
basis of coordination, it provides coordination among departments, activities
and persons in the organisation. Such coordination is provided for explaining
about organisational goals, the mode to their achievement and inter-
relationships between different individuals, etc,
(ii) increases managerial efficiency The employees must know clearly about
their responsibilities and authority, who will report to whom, what part of total
job, they are expected to perform and what are their decision-making powers
and this leads to smooth flow of communication.
(iii) Helps in smooth working of an enterprise All interactions in an
organisation and smooth working of an enterprise is possible only when there is
no communication gap. Right from establishing of enterprise til! its survival,
communication is essential.
(iv) Promotes cooperation and industrial peace Efficient operation is the aim
of all prudent management. It may be possible only when there is industrial
peace in the factory and mutual cooperation between management and workers.
The two way communication promotes cooperation and mutual understanding
between the management and workers.
Q28 Discuss the various formal communication and informal communication

networks,
Ans. Communication network indicates the pattern through which communication flows
within the organisation.
(i) Major formal communication networks are as follows:

Single chain network Communication flows from each superior to his subordinate
through a single chain.
Wheel network All subordinates under one superior communicates through him/her
only.
Circular network Communication moves in a circle. Each person can communicate with
his/her adjoining two persons.
Free flow network Each person can communicate with others freely.
Inverted V network A subordinate can communicate with his/her immediate superior as

well as superior’s superior.

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BUSINESS STUDIES – 12TH S.

Directing is the process in which a superior provides instructions, guidance and

5. Managerial communication: Communication should be in accordance with

A stimulator used by managers to make people act in a desired way to achieve

 Motivation: It is the process of stimulating people into action.

a. Unsatisfied Want: The motivation process begins with an individual's

Maslow's Need Hierarchy Theory of Motivation

3. Affiliation/ Social/ Belonging Needs: It includes needs like affection, sense of

Financial and Non Financial Incentives

Types of Financial Incentives

Types of Non-Financial Incentives

4. Job enrichment: It refers to a variety of work offered to challenge the

Qualities of a Good Leader

7. Self confidence: Should have a high level of confidence to handle difficult

Elements of Communication Process

1. Sender: The person who conveys his thoughts or ideas.

7. Feedback: It refers to the information or suggestions provided by the receiver to

Formal and Informal Communication

Formal Communication Networks

 Single chain: Communication flows from superior to his immediate subordinate.

 Single Strand Network: An employee communicates with other employees in

 Lack of attention: Sender's or receiver’s pre-occupation of mind with other

Measures to Improve Communication Effectiveness

 Communicate according to the needs of the receiver: Sender must consider

MULTIPLE CHOICE QUESTIONS

a) Workers and top management

10. Which of the following is not an element of directing?

(c) Security Needs

SHORT ANSWER TYPE QUESTIONS

Q1 What is meant by directing?

Q2 Give any two elements of directing.

Q3 State any one characteristic of directing.

Q5 How does a supervisor act as a linking pin between management and

Q6 Give any two examples of employee recognition as a non-financial

Q7 Give any two characteristics of organisational climate that influence the

Q8 Why is motivation called a complex process?

Ans. Motivation is a complex process as individuals are heterogeneous in their

Q9 What is meant by motivation?

Q10 What is meant by ‘democratic style’ of leadership?

Q11 What is meant by decoding as an element of communication?

Q12 What is meant by feedback in the concept of communication?

Q13 What is meant by encoding as an element of communication?

Q14 Define formal communication.

Q15 What is meant by informal communication?

LONG ANSWER TYPE QUESTIONS

Q16 What is directing? State the importance of directing.

Q17 Discuss the hierarchy of needs as suggested by A. Mashlow.

Q18 Exxplain the meaning and any three characteristics of directing.

and thereby decisions are converted into actions.

Q20 Describe the importance of supervision in directing function of

Q22 Explain any four non-financial incentives.

Q25 Explain any three personal barriers to effective communication.

reaching to senior management in order to prevent challenge from authority. In

Q26 Explain any three organisational barriers to effective communication.

Q27 Describe the role of communication in the directing function of

Q28 Discuss the various formal communication and informal communication

(i) Major formal communication networks are as follows:

Inverted V network A subordinate can communicate with his/her immediate superior as

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