THE NEW INDIAN SCHOOL W.L.

L
KINGDOM OF BAHRAIN
CLASS: XII BUSINESS STUDIES
CHAPTER 7 – DIRECTING
NOTES
Directing means giving instructions and guiding people in doing work.
CONTENT:
 Directing – meaning, importance , features
 Elements of directing
 Supervision – meaning
 Motivation – meaning, features, Maslow’s theory of motivation, incentives – financial & non-
financial
 Leadership – meaning, features, leadership styles
 Communication – meaning, types, communication barriers, measures to overcome barriers
Directing as a function of management, refers to the process of instructing, guiding, counselling, motivating
and leading people in the organisation to achieve its objectives. It is the force which gives the life to the
organisational structure. Directing comprises of:
a) Issuing orders by a superior to his subordinates.
b) Supervising the employees when they are performing job.
c) Motivating them to perform more effectively.
d) Leading them towards the achievement of overall goals of the concern.
Features
I. Directing initiates action: The other functions of management prepare a set-up base for action, but
directing initiates action in the organisation. Planning, organising and staffing, are passive functions.
II. Directing takes place at every level of Management (Pervasive): Every manager from top executive
to supervisor performs the function of directing.
III. Directing is a continuous process of supervision, communication, leadership and motivation. It
continues throughout the life of the organisation.
IV. Directing flows from top to bottom: It is initiated at the top level and flows to the bottom through
organisational hierarchy and flow of authority.
Elements of Direction
 i. Supervision: It means observing the subordinates at work to see that they are working in accordance
with plans and to help them in solving their problems. The important thing in supervision is that it
involves face to face contact between superiors and subordinates. Supervisor’s position is immediately
above the worker.
ii. Motivation: In the context of an organisation motivation means stimulating employees of all levels to
work with greater enthusiasm and more efficiency for the accomplishment of the objectives of the
enterprises. It involves arousing needs and desires in people so as to initiate and direct their behaviour
in a purposive manner.
iii. Leadership: Leadership is the activity of influencing people to strive willingly for organisational goals.
Leadership indicates the ability of an individual to maintain good interpersonal relations with
followers and motivate them to contribute for achieving organisational objectives. Managers at all
levels are expected to be the leaders of their subordinates.
iv. Communication: It is the process of exchange of information between two or more persons to reach
common understanding.
MOTIVATION
It is the process of stimulating people to act to their best ability to accomplish desired goals. Motivation means
inspiring the employees to work with greater enthusiasm and more efficiency for the accomplishment of the
objectives of the enterprise. It involves arousing needs and desires in people so as to initiate and direct their
behaviour in a purposive manner. Bridging the gap between ability to do a certain work and willingness to
do a certain work.
The term ‘motivation’ is derived from the word ‘motive’.
a. Motive – inner state that moves behaviour towards goal. Motives arise out of the needs of
individuals.
Eg. Need for food causes hunger on account of which a person searches for food.
b. Motivation – process of stimulating people to action to accomplish desired goals.
c. Motivator – the technique used to motivate people in an organisation.
Features
i. Motivation is an Internal feeling: Motivation is an internal feeling which means it cannot be forced
on employees. The internal feeling such as need, desire, aspiration etc. influence human behaviour to
behave in a particular manner.
 ii. Goal Directed Behaviour: It induces people to behave in such a manner so that they can achieve their
goals. A motivated person works towards the achievement of desired goals.
iii. Motivation can be either positive or Negative: Positive motivation means inspiring people to work
better and appreciating a work that is well done e.g., pay increase, promotion, recognition. Negative
motivation means forcing people to work by threatening or punishing them. e.g., issue of memo,
demotion, stopping increments etc.
iv. Complex Process: It is a complex and difficult process. Individuals differ in their needs and wants and
moreover human needs change from time to time.
v. Continuous Process: Human needs are unlimited and so they keep on changing continuously,
satisfaction of one need gives rise to another. As soon as one need is satisfied another need arises. So
managers have to continuously perform the function of motivation.
Maslow’s Need Hierarchy-Theory of Motivation:
Maslow’s Theory focuses on the needs as the basis for motivation. It classifies human needs into five
categories. It helps managers to realise that need level of employees should be identified to provide motivation
to them. It is based on the following assumptions:
i. People’s behaviour is based on their needs.
ii. People’s needs are in hierarchical order.
iii. A satisfied need can no longer motivate a person.
iv. A person moves to the next higher level of hierarchy only when the lower need is satisfied.
According to Maslow human needs can be categorised in to five types.
1. Basic physiological needs: These are the most basic need such as food, shelter, sleep etc. In the
organisational context, basic salary helps to satisfy these needs.
2. Safety or security needs: rovide security from physical and emotional harm E.g. Job security,
stability etc.
3. Affiliation or belongingness needs: These needs refer to affection, sense of belongingness,
acceptance and Friendship for mental satisfaction
4. Esteem or status needs: These include factors such as self-respect, prestige, autonomy status,
recognition and attention.
5. Self-actualisation needs: It is the highest level of need in the hierarchy. It refers to the drive to
become what one is capable of becoming. ( details & diagram refer textbook )
Financial and Non-Financial Incentives:
 Incentive means all measures which are used to motivate people to improve performance.
Financial Incentives (which can be calculated in terms of money)
i. Pay and allowances: Salary is the basic monetary incentive. It includes basic pay, dearness allowance
and other allowances.
ii. Productivity linked wage incentives: Aims at linking payment of wages to increase in productivity.
iii. Bonus: An incentive offered over and above the wages/salary.
iv. Profit sharing: It means to provide a share to employees in the profits. It creates a feeling of ownership
to employees.
v. Co-partnership/Stock option: employees are offered company’s share at a price which is lower than
market price.
vi. Retirement benefits: Such as provident fund, pension and gratuity etc.
vii. Perquisites: Such as car allowance, medical help etc. these measures help to provide motivation to the
employees.
Non-Financial Incentives (which cannot be calculated in terms of money)
i. Status: Status means ranking of positions in the organisation. Psychological, social and esteem needs
of an individual are satisfied by the status given to their job.
ii. Organisational climate: Employees can be motivated with favourable atmosphere.
iii. Career advancement opportunity: Works as a tonic and encourages employees to exhibit improved
performance.
iv. Job enrichment: If jobs are enriched and made interesting, the job itself becomes a source of
motivation to the employees.
v. Employees recognition programmes: Most employees feel that what they should be recognised by the
higher authorities.
vi. Job security: Employees want their job to be secured and it is a strong motivator but on the other hand
it makes the employees lazy.
vii. Employee participation: It means involving employees in the decision making.
viii. Employee empowerment: Means giving more autonomy and powers to subordinates.
LEADERSHIP
Leadership is the activity of influencing people to strive willingly for mutual objectives. Managers at all levels
are expected to be the leaders of their subordinates. Leadership indicates the ability of an individual to
maintain good interpersonal relations with followers and motivate them to contribute for achieving
organisational objectives.
Features of leadership
a) Leadership indicates ability of an individual to influence others.
b) Leadership tries to bring change in the behaviour of others.
c) Leadership indicates interpersonal relations between leaders and followers.
d) Leadership is exercised to achieve common goals of the organistion.
e) Leadership is a continuous process.
Styles of Leadership
A leader may use all styles over a period of time but one style tends to predominate as his normal way of
using power.
Different types of leadership style are as follows:
Autocratic or Authoritarian Leader
An autocratic leader gives orders and insists that they are obeyed. He determines the policies for the group
without consulting them. Under this style, all decision making power is centralized in the leader. He does not
give the subordinates any freedom to influence his decisions. This leader is dogmatic, i.e., does not change or
wish to be contradicted. This leadership style is effective in getting productivity. . Quick decision-making is
also facilitated.

Democratic or Participative Leader

Democratic leader gives order only after consulting the group and works out the policies with the
acceptance of the group. He will encourage them to participate in decision-making. These leaders respect
other’s opinion and support subordinates to perform their duties and accomplish organisational objectives.
Laissez Faire or Free Rein Leader
Free rein leader gives complete freedom to the subordinates. Such a leader avoids use of power. He depends
largely upon the group to establish its own goals and work out its own problems. Group members work
themselves as per their own choice and competence. The leader exists as a contact man with the outsiders to
bring information and the resources which the group requires for accomplishing the job.This is also known
as laissez faire which means no interference in the affairs of others.

COMMUNICATION
It is the process of exchange of information between two or more persons to reach common understanding.
Communication plays key role in the success of a manager. Directing abilities of manager mainly depend
upon his communication skills. That is why organization always emphasizes on improving communication
skills of managers as well as employees. Communication is important for the directing function because all
other elements of directing become possible only when there is adequate communication.
Elements of Communication Process
i. Sender: Who conveys his thoughts or ideas.
ii. Message: Ideas, feelings, suggestions, order etc.
iii. Encoding: Converting the message into communication symbols such as words/pictures etc.
iv. Media: Path/Channel through which encoded message is transmitted to receiver e.g., face to face,
phone call, internet etc.
v. Decoding: Converting encoded symbols of the sender.
vi. Receiver: Who receives communication of the sender.
vii. Feedback: All those actions of receiver indicating that he has received and understood the message of
the sender.
viii. Noise: Some obstruction or hindrance to communication like poor telephone connection, inattentive
receiver.
Types of communication
Formal Communication: refers to official communication which takes place following the chain of
command. Classification of formal communication-
1. Vertical Communication: Flows vertically i.e., upwards or downwards through formal channels.
(i) Downward Communication: Higher to lower level like plans, policies, rules etc.
(ii) Upward Communication: Subordinate too superior like suggestions, grievances, reports etc.
2. Horizontal/lateral Communication: between persons holding positions at the same level of the organisation
e.g., production manager may contact marketing manager about product design, quality etc.
Formal communication network:
Communication network refers to the pattern through which members of a work group communicate. The
following are the formal communication network.
1. Single chain - in this communication exists between a supervisor and his subordinates.
2. Circular network - In wheel network, all subordinates under one superior communicate through him
only as he acts as a hub of the wheel.
3. Wheel network - The communication moves in a circle.
4. Free flow network - Free flow of communication with each and every one in an organisation.
5. Inverted V - A subordinate is allowed to communicate with his immediate superior as well as his
superiors superior.
Informal Communication: Communication that takes place without following the formal lines of
communication is said to be informal communication. There is no fixed direction or path for the flow of
information. It is based on informal relations and arises out of personal and social needs of the employees.
It is also known as ‘grapevine’. There is no defined set pattern of information travelling. This network may
be helpful as they carry information rapidly and to know the reactions of subordinates. Grapevine
communication follow different types of network.
1. Single strand network - each person communicates to the other in a sequence.
2. Gossip network - each person communicates with others on a nonselective basis.
3. Probability network - the individual communicates randomly with others.
4. Cluster network - A person communicates with only those people whom he trusts
Barriers to Effective Communication
Semantic Barriers:
Concerned with problems and obstructions in the process of encoding or decoding of message into words or
impressions. Semantic barriers are as follows:
i. Badly expressed message: Sometimes intended meaning may not be conveyed.
ii. Words with different meanings confuses the receiver.
iii. Faulty translations may transfer wrong messages.
iv. Unclarified assumption: Different interpretations may result in confusion.
v. Technical Jargon: Technical words may not be understood by the workers
(details refer textbook)
Psychological/Emotional barriers
i. Premature evaluation-judgement before listening leads to misunderstanding.
ii. Lack of attention/poor listening may disappoint the employees.
iii. Loss by transmission and poor retention: When oral communication passes through various levels it
destroys the structure of the message or leads to transmission of inaccurate message.
iv. Distrust: If the parties do not believe each other. They cannot understand each other’s message in its
original sense.
Organisational Barriers
Factors related to organisation structure:
i. If organizational policy does not support free flow of information it creates problem.
ii. Rules and regulations: Rigid rules and regulations may lead to red tapism and delay of action.
iii. Status conscious managers may not allow subordinates to express their feelings freely.
iv. Complexity in organization structure results in delay and distort.
Personal Barriers: of superiors and subordinates.
i. Fear of challenge to authority may withhold or suppress a particular communication.
ii. Lack of confidence of superior in his subordinates.
iii. Unwillingness to communicate. e.g., fear of punishment/demotion.
iv. Lack of proper incentives stops the subordinates to offer useful suggestions.
Improving Communication Effectiveness
i. Clarify the ideas before communication.
ii. Communicate according to the needs of receiver.
iii. Consult others before communicating.
iv. Be aware of language, tone and content of message.
v. Ensure proper feedback. Feedback provides opportunity for suggestions and criticism.
vi. Follow up communication helps to remove hurdles, misunderstanding of information given by
managers to subordination.
vii. Be a good listener (details refer textbook)