Class 12th Business Studies Chapter Explaination

Chpater- Directing

Meaning of Directing:

Directing means instructing, guiding, supervising, motivating, leading and coaching people in the organization to achieve its objectives.

Features of Directing:
  1. Directing Initiates Action: While other functions prepare a setting for action, directing initiates action in the organisation.
  2. It takes Place at Every Level of Management: directing takes place wherever superior – subordinate relations exist.
  3. It is a Continuous Process: It takes place throughout the life of the organisation irrespective of people occupying managerial positions.
  4. It Flows from top to bottom: it flows from top to bottom; every manager can direct his immediate subordinate.

Importance of Directing:
  1. Initiates Action: it initiates action, as a supervisor guides his subordinates and clarifies their doubts in performing a task.
  2. Integrates employee’s efforts: it integrates employeesefforts in the organisation in such a way that every individual effort contributes to the organisational performance.
  3. Means of Motivation: motivation and good leadership can always identify the potential of his employees and motivate them to extract work up to their full potential.
  4. Makes dynamic organisation: Effective directing through motivation, communication and leadership helps to reduce resistance towards changes.
  5. Balance in the Organisation: it fosters cooperation and commitment among the people and helps to achieve balance.

Elements of Directing:
  1. Supervision: overseeing what is being done by subordinates and giving instructions to ensure optimum utilisation of resources and achievement of work targets.
  2. Motivation: the process of making subordinates to act in a desired manner to achieve certain organisational goals.
  3. Leadership: the process of influencing the behaviour of people by making them strive voluntarily towards achievement of organisational goals.
  4. Communication: Communication can be defined as a process of exchange of ideas, facts, feeling etc. between two or more people to create mutual understanding.


Meaning of Motivation:

the process of making subordinates to act in a desired manner to achieve certain organisational goals.

Features of Motivation:
  1. Internal Feeling: it’s an internal feeling, urge, drives, etc. that encourage the employee.
  2. Goal Directed Behaviour: different means are used to motivate according to the objective.
  3. Motivation can be either Positive or Negative: motivation can be both encouraging like, pay, promotion, recognition, etc. or it can be discouraging like, punishment, stopping increment, etc.
  4. Complex Process: motivation is dependent on the needs of the people which is heterogeneous.

Maslow's Need Hierarchy Theory of Motivation:

This theory was developed by Abraham H. Maslow a psychologist in 1943.

Maslow categorised human needs into five types:
  1. Basic Physiological Needs: These are the most basic need of human being which are required must of it's survival. For example, Hunger, thirst, shelter, etc.
  2. Safety or Security Needs: These are the needs of human beings that makes their life easy. For example, Job security, stability of income, etc.
  3. Social/Belongingness Needs: These are the needs of human beings that makes their life more interesting and livable. For example, Sense of belongingness, cordial relations among employees.
  4. Esteem Needs: Self-respect, autonomy, status, etc.
  5. Self-Actualisation Needs: This is the highest form of human needs. For example, Growth, self-fulfilment, achievement of goals.

Assumptions for application of Maslow's Need Hierarchy Theory:
  1. People's behaviour is based on their needs.
  2. People's needs are in hierarchical order.
  3. A satisfied need can no longer motivate a person.
  4. A person moves to the next higher level need only when the lower need is satisfied.

Financial and non-financial insentives

Financial Insentives:

incentives which are in direct monetary form or measurable in monetary term and serve to motivate people for better performance.

  1. Pay and Allowances: includes basic pay, dearness allowance and other allowances.
  2. Productivity-Linked Wage Incentives: pay hike and increments linked to performance.
  3. Bonus: incentive offered over and above the wages/ salary to the employees.
  4. Profit Sharing: share to employees in the profits of the organisation.
  5. Co-partnership/Stock Option: employees are offered company shares at a set price which is lower than market price.
  6. Retirement Benefits: retirement benefits such as provident fund, pension, and gratuity provide financial security to employees.
  7. Perquisites: perquisites and fringe benefits are offered such as car allowance, housing, medical aid, and education to the children, etc., over and above the salary.

Non-Financial Incentives:
  1. Status: means ranking of positions in the organisation.
  2. Organisational Climate: These characteristics influence the behaviour of individuals in theorganisation and distinguish one organisation from the other.
  3. Career Advancement Opportunity: opportunity to employees to improve their skills and be promoted tothe higher-level jobs.
  4. Job Enrichment: designing jobs that include greater variety of work content, require higher levelof knowledge and skill; give workers more autonomy and responsibility.
  5. Employee Recognition: Most people have a need for evaluation of their work and due recognition,acknowledgment with a show of appreciation might satisfy.
  6. Job Security: certain stability about future income and work so that they do not feel worried onthese aspects and work with greater zeal.
  7. Employee Participation: involving employees in decision making of the issues related to them.
  8. Employee Empowerment: giving more autonomy and powers to subordinates.


Meaning of Leadership:

the process of influencing the behaviour of people by making them strive voluntarily towards achievement oforganisational goals.

Features of Leadership:
  1. It indicates ability of an individual to influence others.
  2. Leadership tries to bring change in the behaviour of people.
  3. It indicates interpersonal relations between leaders and followers.
  4. Leadership is exercised to achieve common goals of the organisation.
  5. Leadership is a continuous process.

Leadership Styles:
  1. Autocratic Leadership: Autocratic style of leadership is one in which a leader gives orders andexpects his/her subordinates to obey those orders.
  2. Democratic Leadership: Democratic style of leadership is one in which a leader develops actionplans and makes decisions in consultation with his subordinates.
  3. Laissez-Faire Leadership: A free-rein leader gives a high degree of freedom to the subordinates.The group members work on their own tasks, resolving issues themselves. Such a leader avoids the use ofpower. He serves only as a 'contact with the outside world to bring the required information and resourcesto complete the task assigned.


Meaning of Communication:

Communication can be defined as a process of exchange of ideas, facts, feeling etc. between two or more people tocreate mutual understanding.

Elements of Communication Process:
  1. Sender or Communicator: person who conveys his thoughts or idea.
  2. Message: the content of ideas, feelings, suggestions, order, etc., intended to be communicated.
  3. Encoding: converting message into communication symbols.
  4. Media or Communication Channel: path through which encoded message is transmitted to receiver.
  5. Receiver: The person who receives communication of the sender.
  6. Decoding: It is the process of converting encoded symbols of the sender.
  7. Feedback: actions of receiver indicating that he has received and understood message of sender.
  8. Noise: obstruction or hindrance to communication.

Type of Communication:
  1. Formal Communication: It refers to the communication which flows through official channels designedin the organisation chart (i.e., through scalar chain).
  2. Informal Communication: It refers to the communication which takes place without following formallines of communication (i.e., disregarding the levels of authority)

Barriers to Effective Communication
  1. Semantic Barriers:

    1. Badly Expressed Message: intended meaning may not be conveyed by a manager to hissubordinates.
    2. Words or Symbols with Different meanings: A word may have several meanings. Receiver has toperceive one such meaning for the word used by communicator.
    3. Faulty Translations: understandable to workers (e.g., Hindi). If the translator is notproficient with both the languages, mistakes may creep in causing different meanings to thecommunication.
    4. Unclarified Assumptions: Some communications may have certain assumptions which are subjectto different interpretations.
    5. Technical Jargon: specialists use technical jargon while explaining to persons who are notspecialists in the concerned field. Therefore, they may not understand the actual meaning.
    6. Body Language and Gesture Decoding: If there is no match between what is said and what isexpressed in body movements, communications may be wrongly perceived.

  2. Psychological Barriers:

    1. Premature Evaluation: Sometimes people evaluate the meaning of message before the sendercompletes his message.
    2. Lack of Attention/Poor Listening: The preoccupied mind of receiver and the resultantnon-listening of message acts as a major psychological barrier.
    3. Loss by Transmission and Poor Retention: When communication passes through various levels,successive transmissions of the message results in loss of, or transmission of inaccurateinformation.
    4. Distrust: Distrust between communicator and communicate acts as a barrier.

  3. Organisational Barriers:

    1. Organisational Policy: If the organisational policy, explicit or implicit, is notsupportive to free flow of communication.
    2. Rules and Regulations: rigid rules and cumbersome procedures may be a hurdle tocommunication.
    3. Status: Difference between status of superior and subordinate might create communicationbarrier.
    4. Complexity in Organisation Structure: organisation where there are number of manageriallevels, communication gets delayed and distorted.
    5. Organisational Facilities: If facilities for smooth, clear and timely communications arenot provided communications may be hampered.

  4. Personal Barriers:

    1. Fear of Challenge to Authority: If a superior perceives that a particular communication mayadversely affect his authority, he or she may withhold or suppress such communication.
    2. Lack of Confidence of Superior on his Subordinates: If superiors do not have confidence onthe competency of their subordinates, they may not seek their advice or opinions.
    3. Unwillingness to Communicate: Unwillingness to communicate: Sometimes, subordinates may not be prepared to communicate with their superiors.
    4. Lack of Proper Incentives: If there is no motivation or incentive for communication, subordinates may not take initiative to communicate.

Measure to improve communication:
  1. Clarify the ideas before communication: The problem to be communicated to subordinates should be clear in all its perspective to the executive himself. After properly studying in depth, analysing and stating.
  2. Communicate according to the needs of receiver: Manager should adjust his communication according to the education and understanding levels of subordinates.
  3. Consult others before communicating: Before actually communicating the message, it is better to involve others in developing a plan for communication. It might help to gain ready acceptance and willing cooperation of subordinates.
  4. Be aware of languages, tone and content of message: The language used should be understandable to the receiver and should not offend the sentiments of listeners. The message should be stimulating to evoke response from the listeners.
  5. Convey things of help and value to listeners: it is better to know the interests and needs of the people with whom you are communicating, because message relating to their interest helps to evoke response from communicatee.
  6. Ensure proper feedback: The communicator should ensure the success of communication by asking questions regarding the message conveyed & the receiver should also respond. Feedback improves communication process & makes it more responsive.
  7. Communicate for present as well as future: Generally, communication is needed to meet the existing commitments to maintain consistency, the communication should aim at future goals of the enterprise also.
  8. Follow up communications: There should be regular follow up and review on the instructions given to subordinates. It helps in removing hurdles if any in implementing the instructions.
  9. Be a good listener: Manager should be a good listener. Patient and attentive listening solves half of the problems. Managers should also give indications of their interest in listening to their subordinates.