CBSE Class 12 Business Studies Revision Notes Chapter 7 - Directing

Summary Directing: Concept and importance Elements of Directing  Motivation: Concept, Maslow’s hierarchy of needs, financial and non-financial incentives Leadership: Concept, styles of leadership  Communication: Concept, types, barriers to communication and how to remove communication barriers

  

Directing refers to the process of instructing, guiding, motivating and leading people in the organization to achieve its objectives.

Features of Directing 

1. Initiates action: Directing initiates action by people in the organisation towards achievement of desired goals.

2. Pervasive: Directing takes place at every level of management.

3. Continuous: Directing is required on a regular basis.

4. Flows from top to bottom: Every manager directs his immediate subordinate and takes instructions from his immediate boss.

Importance of Directing: 

1. Helps to initiate action: Directing helps to initiate action by people in the organisation towards achievement of organisational goals.

2. Integrates employees’ efforts: Directing ensures that every person in the organisation work towards achievement of organisational goals. It aims at integrating employees’ efforts in the organisation.

3. Guidance to Employees: Directing provides motivation and effective leadership to employees so that the employees can fully realise their potential and capabilities.

4. Introduction of changes: Directing helps in introducing changes which are necessary for the organisation. It reduces resistance from employees to accept changes.

5. Brings stability and balance: directing brings stability and balance in the organisation by promoting spirit of cooperation and commitment. 

Elements of Directing 

1. Supervision

2. Leadership

3. Motivation

4. Communication

Supervision refers to the act of overseeing the work of subordinates. 

Leadership 

Leadership refers to the process of influencing the behaviour of employees towards achievement of organisational objectives. 

Features of leadership:

1. It indicates the ability of an individual to influence others.

2. It tries to influence behaviour of employees.

3. It focuses on interpersonal relations in leaders and followers.

4. It is done to achieve an organisational goals. 

5. It is a continuous process.

Types of leadership styles

1. Autocratic / Authoritative: Under this style, the leader exercises complete control over the employees. All the decisions are taken by the leader and he does not delegate authority. The autocratic leader uses reward and penalties to get the work done from the subordinates.

2. Democratic / Participative: In the style of leadership, the leader takes decisions after consulting his employees. He takes into consideration the opinions and suggestions of employees. 

3. Free rein / Laissez Faire: In this style of leadership, subordinates themselves take decisions. The leader completely delegates the authority and does not interfere in the work of employees unless absolutely essential.

Motivation 

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

Features of Motivation

1. It is an internal feeling.

2. It produces goal directed behaviour.

3. It can be either positive or negative.

4. It is a complex process.

Maslow's Need Hierarchy Theory:

Abraham H Maslow gave need hierarchy theory in which he classified human needs into :

1. Basic physiological needs: These include basic human needs for survival like food, shelter and clothing. 

2. Safety/Security needs: These needs provide security and protection against emotional and physical harm. For example, job security, income stability. 

3. Affiliation/Belongingness needs: These needs include affection, friendship, belongingness and acceptance.

4. Esteem needs: These needs include self-respect, attention, appreciation, recognition, status etc.

5. Self-actualization needs: These needs include urge of becoming what one is capable of becoming. For example, self-fulfillment, growth etc.

Assumptions of Maslow's theory:

1. People's behavior is based on their needs.

2. People's needs are in hierarchical order. It starts from basic needs and move towards higher needs.

3. Once a need it satisfied it no longer motivates a person.

4. When one need is satisfied a person moves to next higher-level need.

Incentives refers to tools or measures which are used to motivate a person. 

Types of incentives:

1. Financial incentives

2. Non-financial incentives

Financial Incentives are those incentives which can be measured in money terms.

Various financial incentives are as follows:

1. Pay and allowances includes basic pay, dearness allowance and other allowances.

2. Bonus: over and above the salary / wage

3. Profit Sharing: sharing profits with employees 

4. Productivity linked wages: linking wages to output

5. Stock option plan/co partnership - offering shares to employees at a price lower than the market price.

6. Retirement benefits - it includes provident fund, pension and gratuity 

7. Perquisites - car, housing, medical aid, education to children etc. 

Non-financial incentives are those incentives which cannot be directly measured in money terms. 

Various non-financial incentives are as follows:

1. Status - rank or position in the organization

2. Career Advancement - increasing skills and knowledge of employees to improve their chances of promotion

3. Employee Recognition - appreciating employees for their good work. Examples include: 

• Congratulating employees 

• Giving award

• Displaying achievement of employees on notice board 

4. Employee Empowerment - giving more power and freedom to employees 

5. Employee Participation - involving employees in decision making process 

6. Job security - making employees feel that their job and income is secured

7. Job Enrichment - adding variety to the work, assigning challenging work which requires higher knowledge and skill

8. Organisational Climate - good working conditions

Communication

Communication refers to the process of exchange of ideas, facts, opinions and information for creating mutual understanding.

Types of communication

1. Formal communication

2. Informal communication

Formal communication refers to the communication which takes place through official channels. 

Types of formal communication

1. Vertical communication - refers to the communication which includes communication between superior and subordinate. 

Vertical communication includes: 

• Upward vertical communication - flow of information from subordinate to superior

• Download vertical communication - flow of information from superior to subordinate

2. Horizontal communication - refers to communication between departments or employees working at same level in the organization.

Barriers to communication refers to hurdles or obstacles in the process of communication.

1. Semantic barriers 

Semantic barriers include:

• Badly expressed message - due to the use of wrong words, omission of needed words etc. 

• Body language - if body language or gestures do not match the message 

• Words with different meaning – eg. right, cheap, value 

• Technical jargon - technical words used by specialists in a field 

• Unclarified assumptions - some messages have certain assumptions which are subject to different meanings

• Faulty translation - translation from one language to another is not properly done

2. Psychological barriers

Psychological barriers include: 

• Lack of attention - if receiver is not attentive and his mind is preoccupied

• Loss by transmission and poor retention - when there are several levels from which communication has to pass

• Distrust - if there is lack of trust between sender and receiver

• Premature evaluation - if receiver evaluates meaning of message before sender completes the message

3. Organisational barriers

Organisational barriers include:

• Status - status gap between people may act as a communication barrier

• Organisational policy - in centralised organisations, there is no free flow of communication

• Rules and regulations - rigid rules and procedures delay the communication 

• Organisational facilities - lack of organisational facilities such as suggestion box , regular meetings etc acts as a communication barrier

• Complexity in organisational structure - if number of levels are more, communication tends to get distorted and delayed

4. Personal barriers

Personal barriers include: 

• Fear of challenge to authority- superior may feel that a particular communication may affect his authority adversely 

• Lack of confidence in subordinates - if superior does not have faith in the abilities of his subordinates, he will not invite their suggestions 

• Unwillingness to communicate - subordinates may feel that a particular communication may affect their interest adversely 

• Lack of incentives - if there is no motivation given to subordinates for eg they are not rewarded for a good suggestion

Measures to overcome communication barriers: 

Some measures to improve the effectiveness of communication are:

• Be a good listener 

• Be aware of language, tone and content

• Ensure proper feedback

• Communicate as per the needs of the receiver

• Clarify ideas before communication

• Ensure follow-up communication