BADALA CLASSES CLASS XII

CLASS XII
BUSINESS STUDIES
CHAPTER-7
DIRECTING
Introduction:-
In ordinary sense directing means giving instructions and guidance to people for the work. In the contest of
management of an organization, directing means ‘a process of instructing, guiding, counseling, motivating
and leading people for the efficient achievement of organizational objective’.

Features/characteristics of directing
1. Directing initiates action:- Directing function of management is considered with the implementations
of plan for making efficient use of available resources. It helps workers to achieve their targets efficiently.
2. Directing takes Place at every level of Management:-Every manager from top executive to supervisor
perform the directing function. It takes place wherever superior subordinate relationship exists.
3. Directing is a Continuous Process:- It is a continuous activity. It takes place throughout the life of the
organization irrespective of managerial positions.
4. If Flour from Top to Bottom:- Directing is first initiated at top level and flower to the bottom
through scalar chain.

Importance
1. Helps to initiates action:- (Same as above)
2. Directing integrates employees efforts:-It helps in integrating and coordinating the efforts of different
individuals and groups for the efficient achievement of organizational goal.
3. Provides effective leadership:-A good leader can motivate subordinates and extract full
contribution from them for the efficient achievement of organizational goals.
4. Facilities introduction of changes:-Effective directing through motivation communication and leadership
helps to achieve cooperation from workers and their union for introducing change in the organization.
5. Stability and balance in the organization:- directing provides effective supervision or motivation, correct
leadership and well understood communication which will bring balance and stability in organization.

Elements of Directing: There are four elements of directing

1. Supervision
2. Motivation
3. Leadership
4. Communication

Supervision
The supervision means instructing guiding, monitoring and observing the employees at work to ensure
optimum utilization of available resources. It is an operative function which is performed by supervisors at
lower and middle level to supervise the employees.

Motivation
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It can be defined as stimulating, inspiring and inducing the employees to perform in their best capacity. It is a
psychological process which means it cannot be forced on employees. It comes automatically from inside the
employees as it is the willingness to do the work.
1. Motive:- A motive is an inner state that energizes activities or moves and directs behavior towards goals.
Motive arises out of the needs of individuals.
Motivator: Motivator is the technique used to motivate the people in the organization. Manager uses
diverse motivators like Pay, Bonus, Promotion, Recognition etc. in the organization to influence people to
contribute their best.
Features of Motivation
1. Motivation is an inner feeling: It is an inner feeling that urge, drives, desires, aspiration or needs of human
living which are internal and influence the human behavior.
2. Motivation Produces Goal Directed Behavior: Only if the person is motivated, then only he will perform
the work efficiently which will help the organization in achieving the goals efficiently and effectively.
3. Motivation can be either Positive or Negative:-Positive motivation provides positive rewards like increase
in Pay, Promotions, Recognition etc. Negative motivation uses negative means like punishment, stopping
increment etc. This also may induce a person to act in the desired way.
4. Motivation is a complex Process:- since the individuals are heterogeneous in their expectations, Perception
and reaction. Any type of motivation may not have the same effect on all the members.

Process of motivation

Maslow’s need hierarchy theory:

Abrahim Maslow, a well known psychologist outlined the elements of an overall theory of motivation. His
theory was on human needs. He felt that between every behavior, there exists a hierarchy of 5 needs. These
are:
1. Basic Psychological needs:- These needs are most basic in the hierarchy. These are also called primary
needs of human being such as food, cloth, shelter etc. Basic salary helps to satisfy such needs

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2. Safety/Security needs:- These provides security and protection from physical and emotional harms such
as job security, stability of increase, retirement benefits etc.
3. Affiliation and Belongingness needs:- These needs refer to affection sense of belongingness, friendship
etc.
4. Esteem needs:- These are psychological needs and includes various factors such as standard of living, self
respect, status, recognisation and attention.
5. Self Actualization Needs: These are higher level needs. These refer to achievement of goals, growth, self
fulfillment etc.

Assumptions of Maslow’s need hierarchy theory:-

1. People behavior is based on their needs satisfaction of such needs influence their behavior.
2. People needs are hierarchal in order. They start from basic psychological needs and reach to higher level.
3. A satisfied need can longer motivate a person; only next higher level need can motivate a person.
4. A person moves to higher level need only when the lower level need is satisfied.

Importance of Motivation
1. Improves Performance: Motivation helps to improve the performance level of employees. It fills the gap
between ability to work and willingness to work resulting in higher level of performance.
2. Builds Positive attitude: Motivation helps to change negative attitude of employees to positive attitude so
as to achieve organizational goals, buy using incentives such as bonus, Praise and promotions.
3. Reduce Employees Turnover:- Motivation helps to reduce employee turnover and thereby saves cost of
new recruitment and training. When employee’s needs are satisfied, they may not think of leaving the
organization. It also helps to retain the talented personnel in the organization.
4. Introduces changes:- Motivation helps the mangers to introduce changes and motivated employees show
less resistance in accepting the changes as they know it is necessary to adapt to the changes in order to
survive in the competitive world.
5. Reduce Absenteeism: Motivation helps to reduce absenteeism by providing proper working condition,
adequate forwards record and good relations with the superiors. This makes work a source of pleasure and
workers generally don’t remain absent.
Types of Motivation: There are two types of motivation:
1. Financial
2. Non Financial

Financial incentive: It refers to those incentives which are provided directly in terms of money or are
measurable in terms of money. There incentives satisfy the basic needs of human beings such as salary,
allowance, have all, medical all, all retirement benefits etc.
Following are the main type of financial incentives:-

1. Basic Pay: for every employee salary is the basic monetary incentive.
2. Productivity linked based incentives: According to this method, wages are linked with productivity of
employees. Therefore an employee is paid fixed rate of wage per unit.
3. Bonus: It is one time reward for high performance. Bonus may be paid in cash or kind over & above salary
eg. performance bonus, 100% attendance bonus etc.
4. Profit Sharing: Acc to this scheme a company offers a part of its profits i.e. fixed percentage of profits to
the employees as per agreement. This motives employee to improve their performance for maximizing
profits of the company.
5. Co-Partnership/Stock option scheme: According to this method, a company offers its shares to the
employees at a price lower than the market price. This develops a feeling of ownership among the

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employees as they are now shareholders of the company and are entitled to receive dividend from the
profits of the company.
6. Retirement benefits: These helps companies to maintain stable and competent workforce as company
provides adequate security to employees in their old age. This includes provident fund etc.
7. Perquisites (Perks): A company offers certain benefits to its managerial staff which is known as perquisites
(like rent free accommodation, education of children, medical facility etc.) these benefits provide
psychological satisfaction to the employees.

Non Financial Incentives: These are those incentives which are not in form of money but provides
psychological, social and emotional satisfaction.
Therefore it plays an important role to motivate the employees following are the important non financial
incentives.
1. Status: It means rank or position in the organization. It includes authorities, challenging responsibilities,
prestige of job, recognition etc. It provides satisfaction of esteem and self actualization needs.
2. Organizational Climate:- It refers to relationship between superiors and subordinate. It has various
characteristics such as autonomy, orientation to employees etc. It motivates employees to be with the
organization as well as provide job satisfaction.
3. Career Advancement Opportunity: Sound Promotion policy motivates employees to improve their
performances. It includes growth and career advancement opportunities for employees.
4. Job Enrichment: It refers to designing jobs with greater variety of work, which requires higher level of
skills and knowledge. By offering challenging jobs autonomy to perform jobs employees get satisfied and
they feel motivated.
5. Employees recognition Program: Recognition means acknowledgement of good work or performance of
the employees. With such appreciation employees feel motivated to do the work more efficiently. It can
be done in the following ways:
(i) Congratulating an employ for his/her good performance.
(ii) Display on notice board of the company about the achievement of employee.
(iii) Giving award/Certificate for best performance.
6. Job Security:- It ensures stability of income and work which motivates an individual to work with greater
efficiency. However it has one negative aspect i.e. it makes individual feel that they are not likely to lose
their job and hence they become careless.
7. Employee Participation:- Acc to this method employees should be encouraged by the management to
participate in the decided making on the matters which are concerned with them. This will help in the
improvement of management and employees relationship.
8. Employees empowerment: It refers to giving work autonomy and powers to the subordinate to make them
feel they are important for the enterprise. By this they contribute positively to make efficient use of talent
and skills of the employee.

Leadership:-
It is the process of influencing the behavior of people at work towards the achievement of specified goals.
It indicates the ability of an individual to maintain good interpersonal relation with the followers to motivate
them and to contribute their best for the achievement of organizational goals.
Features:
1. It is the ability of an individual to influence people.
2. It tries to bring change in the behavior of others.
3. It is exercised to achieve common goals of the organization.
4. It explains the interpersonal relationship between the leaders and followers.
5. It is a continuous process.

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Importance:
1. Influence the behavior of people:- A good leader can influence the behavior of people and contributes their
energies for the benefit of organization.
2. Provide Confidence:- A leader maintains personal relations and help his followers in fulfilling their needs.
He provides confidence, support and encouragement to his followers.
3. Introduction to Change:- Leader plays a key role in introducing required changes in the organization. They
help in solving the problem of resistance to change by inspiring employees to adopt the changes.
4. Handle Conflicts:- A good leader helps in solving the conflicts, allowing their followers to present the
reason for disagreement and persuades them by giving suitable clarification.
5. Provides training: Leader provides training to their subordinates in order to make them efficient and to
facilitate a smooth flow of organization.
Qualities of a good leader:-
1. Physical qualities:- A good leader must possess a good height, weight, health appearance. Health and
endurance help a leader to work hard and inspire others also.
2. Knowledge:- A good leader should have required knowledge and competence so that be he can influence
either’s.
3. Integrity:- A leader should possess high level of integrity or loyalty so that he can be a role model for
others.
4. Initiative:- A Leader should have courage and initiative to do the things on his own, rather than waiting
for others to do it first.
5. Communication skills: A leader should be a good communicator. He should be able to clearly explain his
views to other. He should not only be a good speaker, but a good listener, teacher and counselor.
6. Motivation Skills:- A leader should understand the needs of his employees and motivate them by satisfying
their needs.
7. Self confidence:- A leader should have a higher degree of confidence. He should not lose confidence even
in most difficult times.
8. Decisiveness:- A leader must be decisive in the sense that once he has taken a decision, he should be firm
on it.
9. Social skills:- A leader should be friendly with the colleges and followers so that he can understand there
needs.
Leadership Styles:
1. Autocratic/Authoritarian leadership:- An automatic leader has control over the subordinates. He
centralizes power in himself and takes all the decisions without consulting the subordinates. He does not
delegate authority. It is suitable for organizations where the subordinates are unskilled. It leads to fast
decision making but also leads to frustration among subordinates.
2. Democratic/Participative Leadership:- Under this style of leadership, leaders take decision in consultation
and participation with employees. He delegates and decentralizes the authority. Leader follows the opinion
of majority.
Advantages of democratic:-
a. Improves decision making ability of subordinates.
b. Develops job satisfaction.
c. Better decision making.
In this style of leadership, the decisions are delayed. It is suitable for those companies which have the
objective of increasing job satisfaction and freedom of employees.
3. Free-rain/Laissez Faire leadership:- In this style leader avoid power, he serves only as a contact to bring
uniformity and resources needed by the subordinates. In this style leader gives complete freedom to
subordinates.

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It is suitable when subordinate are well trained, highly knowledgeable, self motivated and are
ready to assume responsibility.
Advantages:
1. Positive effect on job satisfaction and morale of employees.
2. Scope of development of subordinates.
Disadvantages:
1. Subordinates do not get guidance and support of the leader.
2. Subordinates may work in different directions which may result in problem.

Communication:-
It is a process of exchanging or sharing common ideas, views, facts and feelings between people for creating
common understanding. According to managerial experts, directing abilities of a manager mainly depends on
his/her communication skills.
Elements of Communication:-
(i) Sender:- The person who conveys the message is known as sender or communicator. He initiates the
process of communication.
(ii) Message:- It is subject matter of communication. It may consist of facts, information, ideas etc.
(iii) Encoding:- The sender translates the message into gestures or other symbols, which we feels will make
the receiver understand the message more properly.
(iv) Channel or Media:- The encoded message is transmitted through some medium, which is known as
communication channel. Eg. Speaking, writing, Internet etc.
(v) Decoding:- It means process of conversion of symbols into the message by the receiver.
(vi) Receiver:- The person who receives the message is called the receiver. The receiver may be a listener,
reader or viewer.
(vii) Feedback:- The receiver sends his response to the sender of the as feedback when the feedback is
received.
(viii) Noise:- It means any obstruction or hindrance in the communication process. Some examples of noise
are Ambiguous symbols, poor telephone connection, an incentive listener, etc.
Importance of Communication:-
1. Acts as a basis of Coordination:- Communication is the basis of coordination it helps in coordinating the
activities of various departments and person in an organization.
2. Helps in Smooth Working of an Enterprise:- Communication ensures smooth functioning of an enterprises.
Existence of an organization depends fully of communication i.e. transmitting information.
3. Acts as a Basis of decision Making: Communication provides needed information for decision making. In
Its absence it may not be possible for the managers to take decision thus it serves as a basis of decision
making.
4. Increases Managerial Efficiency:- Various functions of managers like providing information, instruction,
resources etc would not be possible in the absence of communication. Thus communication it essential for
effective performance of managerial functions.
5. Promotes co-operation and Industrial Peace:- effective operation is only possible when there is industrial
peace in the factory and mutual co-operation between the employee. Two way communication promotes
cooperation and mutual understands between them.
6. Establishes effective leadership:- Communication is the basis of leadership. A good leader must possess
efficient communication skills for influencing the behavior of subordinate.
7. Boost Morale and provides motivation: Good and effective communication enable managers to motivate,
influence and satisfy the needs of employees. It helps employees to adjust in the physical and social aspect
of work.
Types of Communication:

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1. Formal Communication:- It refers to official communication taking place in the organization. This
communication takes place between superior and subordinates through official channels or scalar chain
is known as formal communication.
It is related to official matters such as assignment of tasks, fixing of responsibilities, granting authorities
etc. It generally takes place in written form by issue of notice, letters, documents formal communication
may be of 2 types.
(i) Vertical Communication:- Communication taking place between 2 levels in the organization is
called vertical communication. It may take place in 2 forms-
(i) Upward Communication: In this subordinate communicates with his superior.
(ii) Downward Communication: In this superiors communicates with his subordinates.
(ii) Horizontal/Lateral Communication:- Communication to that takes place between individual
working at the same level, is called horizontal communication.

➢ Network of Formal Communication:

(i) Single Chain:

In this network communication flows from every superior to his subordinate in a single chain.
(ii) Wheel Network:
sub

sub sup sub

sub

In this network, all subordinates working under superior communicates through him only. The superior is
at the hub of the wheel communicating with all at the same time.

(iii) Circular Network:

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In this network communication moves in a circle from one person to another each person can communicate
with 2 adjoining colleagues.
(iv) Free Flow:-

In this network each person can communicate with other freely and therefore communication is fast in this
network. I
(v) Inverted ‘V’ S

II
S

Su
Su
b
b

In this network a subordinate is allowed to communicated with his superior and superior’s superior.

Informal communication:- It takes place in an organization without following the formal lines or scalar
chain such type of communication usually takes place among the workers to exchange their view and to
satisfy their social needs. The network of communication followed in the informal communication is
referred to as ‘grape vine’ it spreads throughout the organization with its branches going out in all
directions, irrespective of the level of authority. Informal communication spreads rapidly in the
organization. The source of informal communication cannot be easily detected.

Networks of informal communication:

1. Single strand Network:- In this network each person communicate with the other in a sequence.
2. Gossip Network:- In this network one person communicates with all at the same times.

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3. Probability Network:- In this network any person can communicate with anyone else
randomly.
4. Cluster Network:- In this network, an individual communicates with only those people
whom he trust.

Basis Leaders Managers

Formal rights A leader has no formal right A manager has certain formal
rights
Followers A leader has followers A managers has subordinates
subordinates
Functions A leader is to guide and motivate his A managers is to plan,
followers organize, staff, direct,
motivate and control
Necessity Leadership is not a necessity for an Manager ship is a necessity
organization for an organization
Scope Leadership is a part of managerial function Manager ship is a winder term
thus its scope is limited. and includes leadership
Mutual Relation all leaders are not managers All managers are leaders.

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