NCERT Solutions for Class 12 Business Studies Chapter 7 Directing

NCERT
SOLUTIONS
CLASS - 12th

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Book : Business Studies Ncert Solutions | Chapter-7 Business Studies

Class : 12th

Subject : Business Studies

Chapter : 7

Chapter Name : Directing

Q1 Which one of the following is not an element of direction?

(a) Motivation

(b) Communication

(c) Delegation

(d) Supervision

Answer. (c) Delegation

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Q2 The motivation theory which classifies needs in hierarchical , order is developed by

(a) Fred Luthans

(b) Scott

(c) Abraham Maslow

(d) Peter F. Drucker

Answer. (c) Abraham Maslow

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Q3 Which of the following is a financial incentive?

(a) Promotion

(b) Stock Incentive

(c) Job Security

(d) Employee Participation

Answer. (b) Stock Incentive

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Q4 Which of the following is not an element of communication process?

(a) Decoding

(b) Communication

(c) Channel

(d) Receiver

Answer. (b) Communication

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Q5 Grapevine is

(a) Formal communication

(b) Barrier to communication

(c) Lateral communication

(d) Informal communication

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Answer. (d) Informal communication

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Q6 Status comes under the following type of barriers

(a) Semantic barrier

(b) Organisational barrier

(c) Non Semantic barrier

(d) Psychological barrier

Answer. (b) Organisational barrier

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Q7 The software company promoted by Narayana Murthy is

(a) Wipro

(b) Infosys

(c) Satyam

(d) HCL

Answer. (b) Infosys

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Q8 The highest level need in the need Hierarchy of Abraham Maslow:

(a) Safety need

(b) Belongingness need

(c) Self actualisation need

(d) Prestige need

Answer. ( c) Self actualisation need

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Q9 The process of converting the message into communication

symbols is known as-

(a) Media

(b) Encoding

(c) Feedback

(d) Decoding

Answer. (b) Encoding

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Q10 The communication network in which all subordinates under a supervisor communicate
through supervisor only is:

(a) Single chain

(b) Inverted V

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(c) Wheel

(d) Free flow

Answer. (c) Wheel

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Q1 Distinguish between leaders and managers.

Answer. A leader and a manager have certain things in common as both of them lead a team of
people. However the difference between the two is given below -

Basis Leaders Managers

Existence They exist in formal as well They exist only in formal
as informal organisation organisational structure.
structure.

Aim His aim is to achieve group His aim is to achieve
goals by motivating his team. organisational goals by
influencing his team's
behaviour.

Functions A leader only performs A manager performs all the
directing function. five fun namely planning,
organising, staffing, directing
and controlling.

Authority A leader doesn't have formal The manager has a formal
authority over his team and authority over his employees.
he cannot command them. He can command them to
He can only lead them by work as per the directions.
trust.

Page : 212 , Block Name : Short Type Answer Questions

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Q2 Define Motivation

Answer. Motivation is the process of inducing the employees to work towards achieving goals
and objectives of the organisation. It refers to encouraging people to use their full potential and
work to the best of their abilities to achieve organisational goals and objectives. It influences the
psychological behaviour of an individual to make him perform better. It can be in the form of
monetary benefits or in the form of non-monetary benefits. Monetary benefits include bonus,
perks, etc. while the non-monetary may include appraisal, recognition, etc. The kind of
motivation provided depends on the employee's expectations and desires.

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Q3 What is informal communication?

Answer. Informal communication which is also known as the grapevine communication is the
type of communication which doesn't have a specific path of transmitting the information. It flows
in all directions without following the formal path. It arises when the employees of the
organisation have the need to interact to meet their social needs. There is no formal hierarchical
chain of authority to be followed by the employees. In this type of communication, the
subordinate may communicate with his senior without following any specific line of authority.

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Q4 What are semantic barriers of communication?

Answer. Semantic barriers are those barriers which arise due to the non understanding of the
language. It may include wrong interpretation of the meaning of a word, misunderstanding the
word or wrong translation etc. The following are some causes of semantic barriers:

→ Poor vocabulary is the chief cause of semantic barriers which may result in wrong usage of
words. The person having a poor vocabulary may not express himself properly.

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→ Sometimes it may happen that a word has more than two meanings. In such a case, if the
meaning isn't specified then it may lead to confusion.

→ It may also happen that the two employees are from diverse cultural backgrounds and they
don't have a common language to talk in. Thus it leads to language barriers. It may happen that
the manager communicates in English while the workers don't understand it.

→ Usage of technical jargon is another issue. The experts generally use technical language
while communicating but the subordinates may not be able to understand it.

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Q5 Who is a supervisor?

Answer. A supervisor is the person who is responsible for overseeing the activities of the
workers. He works at factory level in the organisation. The following functions are performed by
a supervisor:

→ He directly interacts with the employees on a daily routine basis and guides them to work
with harmony and unity.

→ He is a link between the workers and the middle level management. He communicates the
grievances of the workers to the management and also passes on the orders and instructions of
the management to the workers. In other words, the management and workers communicate
through the supervisor.

→ A supervisor is responsible for overseeing that the work is carried out effectively and
efficiently and that the set targets are met by the employees.

→ The knowledge or skill as required by workers for various activities is provided by the
supervisor.

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Q6 What are the elements of directing?

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Answer. Directing refers to the process of providing instructions, guidance, counselling and
motivation to employees towards achieving the goals and objectives of an organisation. It
involves the following elements:

→Supervising: Supervision is the process of guiding the employees of the organisation towards
achieving the predetermined goals and objectives. It involves overseeing the efforts of the
employees and guiding them to achieve goals and objectives. Through effective supervision, it
is ensured that work is carried out efficiently and effectively.

→Motivation: Motivation is the process of inducing the employees to work towards achieving
goals and objectives of the organisation. It refers to encouraging people to use their full potential
and work to the best of their abilities to achieve organisational goals and objectives. It influences
the psychological behaviour of an individual to make him perform better. It can be in the form of
monetary benefits or in the form of non-monetary benefits.

→Leadership: Leadership refers to the process of influencing the behaviour of the employees in
such a way that they show willingness to do the work. It is the process of influencing the
employees to achieve organisational goals effectively. Good leadership increases the
self-confidence of workers and induces them to work to the best of their capabilities.

→Communication: Communication refers to the process of exchanging ideas, feelings,
emotions, information and facts to create a common understanding. Good communication is
very important for the smooth and efficient functioning of an organisation.

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Q7 Explain the process of motivation?

Answer. Motivation refers to inducing workers to work and perform in a desired manner so as to
achieve the goals of the organisation. The process of motivation is as follows:

→ Unsatisfied Want: An unsatisfied want is the basis of the motivation process.

→Frustration: Because of the unsatisfied want, the individual develops frustration.

→Drives: The frustration prompts the individual to search alternatives to satisfy his need.

→ Behaviour: From among the numerous alternatives, he selects one and modifies his
behaviour according to it.

→ Satisfaction: After following a particular behavioural pattern, he evaluates whether his need is
satisfied.

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→Reduced Frustration: When the desired need is satisfied, the frustration which had built up
reduces.

For example, suppose a worker desires higher pay. This makes him uneasy and he starts
searching for alternatives through which he can earn a higher pay. For instance, he may think of
working harder and improving his performance. After consistently working harder for a
considerable amount of time, his work is recognised and his salary raised. Accordingly, his need
is satisfied and thereby his stress and frustration reduced.

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Q8 Explain different networks of grapevine communications?

Answer. Informal communication is the one where information flows in all directions without
following the formal path. Types of grapevine communication network:

→Single Strand Network: The spread of information is in a particular sequence. That is one
person communicates to another person who in turn communicates to some other person.

→Gossip Network: Information is shared by one person with many others at a time.

→Probability Network: Information is shared with other people at random. That is, the person
sharing the information is indifferent about whom he shares the information with.

→Cluster Network: In this network, the first two persons who trust each other share information.
One of them then passes the information to some third person who in turn shares it with the
fourth and so on.

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Q1 Explain the principles of Directing?

Answer. Principles of directing:

→ Maximum Individual Contribution: According to this principle, such technique of directing
should be used which encourage workers to work efficiently and to the best of their capabilities

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such that he contributes the maximum towards the common goals of the organisation. For
example, for encouraging workers, various financial and non-financial incentives can be given.

→Harmony of Objectives: Often it is seen that the personal goals of an employee are not in
sync with the overall organisational goals. In such situations, the focus of directing function
should be to bring about convergence between the two. For example, while an employee may
wish to increase earnings, the goal of the organisation may be to increase production. In such
cases, the directing techniques used should encourage workers to work harder such that
production increases and they are able to earn better.

→Unity of Command: According to this principle, an employee should receive instructions or
orders from only one superior. In other words, he should be answerable to only one superior.
Violation of this principle leads to confusion and chaos in the minds of the subordinate.

→Appropriateness of Direction Technique: According to this principle, the manager must
appropriately select the direction technique such that it is according to the needs, desires and
attitude of workers. Different motivation techniques work for different employees. For instance,
while one employee might desire financial incentive, some other employee might get satisfied
with praise from a superior.

→Managerial Communication: Effective communication is highly important for effective
directing. There must be free flow of communication between the manager and the subordinate
without any hesitation or barrier with regard to authority or power. While the superiors must
clearly express their instructions to the subordinates, the subordinates also should communicate
freely with the superior.

→ Use of Informal Organisation: The manager must realise and identify the informal groups in
an organisation. Such informal organisation can be used strategically for the advantage of the
organisation. For example, informal communication can be used to bring forward the real
thinking of employees with regard to a policy change.

→ Leadership: A manager should have leadership qualities. He must be able to bring out the
best in employees. He must be able to motivate and encourage workers to work towards the
organisational goals. In addition, he must be able to work on the individual goals of employees.

→ Follow Through: According to this principle, the manager must not only provide orders or
commands to the subordinates but should also ensure that the instructions are followed and
implemented properly. For this, proper follow-up actions should be taken. Corrective actions, as
required, must also be taken.

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Q2 Explain the qualities of a good leader? Do the qualities alone sure leadership success?

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Answer. Some qualities which a successful leader must possess:

→Physical Attributes: It is a general perception that people with good physical features and
attractive personality make good leaders. One who is healthy and active himself can work
efficiently. The one who works to the best of his ability is looked up to and induces others to
improve performance.

→ Honesty: A good leader should maintain a high level of honesty and integrity such that he is
an idol for others in terms of these values. He must demonstrate an ethical behaviour.

→ Intelligence: A leader must have high knowledge and intelligence. He should have a strong
presence of mind. He must be able to use logic and facts for decision making. He must be able
to provide solutions to various problems encountered during working.

→Inspiration: A leader should be able to inspire and influence others. He must be a source of
inspiration and motivation to others. He must be looked up to in terms of work, performance,
values and ethics.

→Confidence: A leader must possess high confidence. This confidence must be maintained in
difficult and adverse situations as well. In this way, he must be able to boost the confidence of
his subordinates as well.

→Responsibility: A leader must not move away from his responsibility in any situation. In
situations where his subordinates make mistakes, he must hold the responsibility of being
answerable. However, he must share and involve the subordinates in the credit of success.

→Effective Communication Skills: One of the important qualities of a good leader is to possess
effective communications skills. He must be clearly able to express his thoughts and ideas.
Moreover, he must be a good listener and counsellor. He must be able to act as a link between
the higher management and the subordinates such that he can communicate the problems and
grievances of the subordinates to the superiors.

→ Ability to Take Decisions: A leader must have the ability to take appropriate rational
decisions which are based on logic and facts. Moreover, once a decision is taken he should be
confident enough to hold on to it.

→ Social Behaviour: He should be socially active and friendly. He must be supportive and
understanding towards the subordinates.

→Dynamic: A leader must be a dynamic personality in the sense that he must be able to bring
in new ideas in the organisation. He must be able to break the old paradigms for the overall
organisational benefit.

While the above-mentioned qualities are prerequisites for being a good leader, the mere
possession of these qualities does not ensure successful leadership. It is not possible for a
single individual to have all the above-mentioned qualities. However, managers must make a
conscious and sincere effort towards acquiring them.

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Q3 Discuss Maslow’s Need Hierarchy theory of motivation.

Answer. Maslow's Hierarchy of Needs helps in understanding the phenomenon of motivation.
According to Maslow, the needs of an individual can be classified into five categories which can
be arranged in a hierarchical order. With the knowledge of these needs, a manager can better
understand the behaviour of employees in the organisation and accordingly provide appropriate
motivation.

Assumptions

Maslow's theory is based on the following assumptions:

→People behave according to their needs and desires.

→ It is possible to arrange the needs of an individual in an order of hierarchy.

→An individual would move to a higher level need in the hierarchy only when the need at the
lower level is appropriately satisfied.

→When a need at a particular level is satisfied, further motivation can be provided only through
the next level need.

Hierarchy of needs as given by Maslow:

→Physiological Needs: These needs are the most basic needs in the need hierarchy. It
comprises needs which are essential for survival and sustenance. For example, need for food,
clothing and shelter. In terms of an organisation, the requirement of a basic salary is a
physiological need.

→Security Needs: An individual requires physical and economic security. For example, an
employee wishes for job security and stability in income.

→Belongingness Needs: It refers to the social needs of an individual in terms of affection and
acceptance. In other words, it refers to a feeling of belongingness to society.

→ Esteem Needs: It comprises elements such as respect, dignity and recognition in the peer
group.

→ Self-Actualisation Needs: Every individual wishes to achieve what he aims or aspires. For an
employee, it includes factors such as recognition of work, autonomy and growth.

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It must however be noted that it may happen that the needs of an individual are not in the exact
order of the hierarchy. Nevertheless, a good understanding of the needs helps managers in
using effective motivation.

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Q4 What are the common barriers to effective communication? Suggest measures to overcome
them.

Answer. Barriers in Communication

→Sometimes a barrier to effective communication may arise in the sense that there is a
misunderstanding or misinterpretation of the information on the part of the receiver.

Barriers to communication:

→Semantic Barriers: Semantic barriers refer to barriers wherein there is problem in decoding
the message because of factors such as difficulty in interpretation, wrong translations or use of
wrong words. For example, sometimes a single word may have many different meanings. The
receiver of the message must correctly interpret the meaning of the word as intended to be used
by the sender. Similarly, the use of technical vocabulary by specialists might be difficult to
understand others.

→Psychological Barriers: Various psychological factors such anger and frustration might also
act as a barrier in effective communication. For example, if an individual is frustrated over a
matter, his mind would be preoccupied and he would not be able to clearly understand a piece
of information given to him.

→Personal Barriers: Personal barriers arise out of the personal factors affecting the sender and
the receiver. For example, sometimes the subordinates do not communicate freely with
managers because of the fear of authority. On the other hand, the manager may not also
communicate certain information with the subordinates if he feels that it would affect his
authoritative power. Similarly, if the manager does not have confidence in the skill and
competence of the subordinates, he would not seek their advice or opinion.

→Organisational Barriers: Organisational barriers refer to barriers in effective communication
which arise in formal organisations because of factors such as authority and hierarchical
relationships. For example, if there are long vertical chains of communication in an organisation,
it would create a barrier to effective communication. Similarly, a highly centralised organisational
structure restricts the free flow of communication.

Measures to overcome Barriers in Communication

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Some measures which can be adopted to overcome various barriers of communication:

→The understanding level of the receiver must be kept in mind while providing information.

→The language, tone and content of the information should be such that it does not harm the
sentiments of the receiver.

→While communicating, the receiver must be regularly prompted to respond so as to ensure
that information is being understood.

→The sender must ensure that the information provided is complete in all respects.

→Both sender and receiver must be clear with regard to the basic idea of the communication.

→The sender must also be a patient listener and invite response and communication from the
receiver as well.

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Q5 Explain different financial and non financial incentives used to motivate employees of a
company?

Answer. Financial Incentives

Financial incentives refer to the direct monetary benefits given to employees by an organisation
with the objective of providing motivation to improve performance. The following are some types
of financial incentives:

→Salary and Allowances: It is the most basic form of financial incentive. A regular increment in
salaries and other allowances acts as a good motivation factor for employees.

→Performance-based Incentives: Sometimes, monetary incentives can be given based on the
performance of employees. In other words, they can be suitably rewarded for good
performance. This motivates workers to improve work efficiency.

→Bonus: Bonus refers to the monetary reward which is over and above the basic salary. It can
be in the form of cash and gifts.

→Stock Option: Employees are offered the shares of the company at a discounted price. This
helps in developing a feeling of belongingness among the employees.

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→Sharing of Profit: Employees are offered a share in the profits of the organisation. This
motivates workers to improve performance so as to contribute positively towards the growth of
the organisation.

→ Retirement Benefits: Employees may be offered retirement benefits by the organisation.
These benefits can be in the form of pensions, gratuity and provident fund. This instils a feeling
of security and stability among employees.

→ Fringe Benefits: It refers to the additional benefits provided to employees over the salaries.
For example, housing allowance and medical allowance.

Non-Financial Incentives

Non-financial incentives are incentives which cater to the non-monetary needs of employees
such as social and psychological needs. The following are some non-financial incentives:

→Position: The employees often require a rise in the status in terms of power and authority. It
provides them psychological satisfaction.

→Organisational Characteristics: Various organisational characteristics such as employee
freedom and recognition of performance play an important role in motivating employees. For
example, if an employee's work is recognised and praised, it would encourage him to further
improve performance.

→Work Enrichment: Challenging work endowed with greater responsibility and requiring higher
knowledge and skill enhances the interest of the employee. It provides the employee prospects
for personal growth. Thus, it proves to be a good source of motivation for him.

→Career Opportunities: Employees must be given ample opportunities to develop their skills
and knowledge such that they are able to improve their career prospects. This can be done
through training and development programmes.

→Job Security: Employees need a certain degree of security of job in the sense that they must
be certain about the income in the future. This is would enable them to work with greater
passion.

→Involvement: Employees must be involved in decision making, especially in issues pertaining
to them. This provides workers a feeling of belongingness towards the organisation.

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Q1 The workers always try to show their inability when any new work is given to them. They are
always unwilling to take up any kind of work. Due to sudden rise in demand a firm wants to meet
excess orders. The supervisor is finding it difficult to cope up with the situation. Suggest ways
for the supervisor to handle the problem.

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Answer. In the given situation, employees require proper motivation. The supervisor must work
towards encouraging employees to improve work efficiency and performance. In this regard, the
needs and requirements of workers must be appropriately identified. In other words, an attempt
should be made to identify the real cause for the unwillingness to work. Accordingly, suitable
actions should be taken.

The supervisor can use various financial incentives (such as bonus and profit sharing) or
non-financial incentives such as work enrichment.

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Q2 Workers of a factory often come to the Production Manager with grievances. The production
manager finds himself overburdened with so many tasks. Advise a way to relieve the production
manager.

Answer. To reduce the work burden of the production manager, a supervisor can be appointed.
The supervisor would serve as the middleman and communication link between the manager
and workers. He would directly deal with workers, thereby reducing the burden of the manager.

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Q3 In an organisation employees always feel they are under stress. They take least initiative
and fear to express their problems before the manager. What do you think is wrong with the
manager ?

Answer. The given situation depicts absence of free communication. To resolve the situation,
the manager must take steps to involve the subordinates in the decision-making process. The
subordinates must be encouraged to provide feedback and new ideas.

Page : 213 , Block Name : Application Type Answer Questions

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Q4 In an organisation all the employees take things easy and are free to approach anyone for
minor queries and problems. This has resulted in everyone taking to each other and thus
resulting in inefficiency in the office. It has also resulted in loss of secrecy and confidential
information being leaked out. What system do you think the manager should adopt to improve
communication?

Answer. The organisation in the given situation follows an informal system of communication. To
improve the communication in the organisation, steps must be taken to move towards a formal
system of communication. In other words, steps must be taken such that information flows
following the formal hierarchy. In such a system, the flow of information would be systematic
and in the proper order. In this way, it would be easy to identify the original source of
communication and thereby the proof of communication can be maintained.

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Q1 Y limited is a bank functioning in India. It is planning to diversify into insurance business.
Lately, the government of India has allowed the private sector to gain entry in the insurance
business. Previously, it was the prerogative of LIC and GIC to do insurance business. But now
with liberalisation of the economy and to make the field competitive other companies have been
given licenses to start insurance business under the regulation of ‘Insurance Regulatory and
Development Authority’. Y limited plans to recruit high quality employees and agents and
exercise effective direction to capture a substantial part of life and non life insurance business.

Questions

1. Identify how the company can supervise its employees and agents effectively. What benefits
will the company derive from effective supervision?

2. What financial and non-financial incentives can the company use for employees and agents
separately to motivate them. What benefits will the company get from them?

3. How can the company ensure that higher order needs i.e., esteem and self-actualisation as
specified by Abraham Maslow are met?

4. Identify the qualities of leadership in this line of business that the company managers must
possess to motivate employees and agents.

5. Give a model of formal communication system that the company can follow. Identify the
barriers in this model. How can they be removed?

6. How can informal communication help to supplement formal communication model given by
you in answer to question 5?

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Answer. For effective supervision, a supervisor should be employed who would be in direct
contact with workers. The supervisor would act as a link between managers and workers.
Benefits which the company would derive by employing a supervisor:

→A supervisor would guide workers and provide support to them. He would ensure that workers
work with harmony and unity.

→He would ensure that the work is carried out efficiently and smoothly and that the set targets
are met.

→He would provide employees with knowledge and skills as required by workers.

→A supervisor with good leadership would help in boosting employee morale.

→He would provide regular feedback and suggestions so as to improve efficiency and
performance.

The following financial and non-financial incentives can be given by the company to employees
and agents.

Financial benefits for employees and agents:

→Performance-based incentives: The employees can be given monetary rewards based on
their performance.

→Stock option: Employees can be offered shares of the company at a discounted price.

Non-financial benefits for employees and agents:

→Work enrichment: Employees and agents can be endowed with greater responsibility and
more challenging work.

→Job security: Employees can be given job security in the sense that they must be certain
about income in the future.

→Financial and non-financial benefits would be beneficial to the company in the following
manner:

→Improves performance: Financial and non-financial incentives fulfil the various needs of
employees. They encourage them to work efficiently and improve performance.

→Develops a positive attitude: They help in developing a positive attitude among workers such
that they are motivated to work efficiently.

→Reduces employee turnover: By fulfilling the needs of employees, the various financial and
non-financial help in reducing employee turnover.

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→Creates a healthy work environment: The incentives help in creating a healthy work
environment wherein employees enjoy work.

For satisfying the higher order needs, measures such as work enrichment and career
opportunities can be taken. The employees can be provided greater challenge and
responsibilities in work. In addition, greater growth opportunities must be offered to employees.

In the given line of business, the following leadership qualities must be possessed by the
manager:

→Effective communication skills: He must be clearly able to express his thoughts and ideas.
Moreover, he must be a good listener and counsellor. He must be able to act as a link between
the higher management and the subordinates such that he can communicate the problems and
grievances of the subordinates to the superiors.

→Dynamic: He must be able to bring in new ideas in the organisation. He must be able to break
the old paradigms for the overall benefit of the organisation.

→Social behaviour: He should be socially active and friendly. He must be supportive and
understanding towards the subordinates.

→Confidence: A leader must possess high confidence. This confidence must be maintained in
difficult and adverse situations as well. In this way, he must be able to boost the confidence of
his subordinates as well.

→Responsibility: A leader must not move away from his responsibility in any situation. In
situations where his subordinates make mistakes, he must hold the responsibility of being
answerable. However, he must share and involve the subordinates in the credit of success.

→The model of communication followed in the organisation should be such that it promotes free
flow communication. In such a system, there must not be any barriers to communication.

The following barriers are encountered in communication:

→Semantic Barriers: Semantic barriers refer to barriers wherein there is a problem in decoding
the message because of factors such as difficulty in interpretation, wrong translations or use of
wrong words.

→Psychological Barriers: Various psychological factors such as anger and frustration might also
act as a barrier in effective communication.

→Personal Barriers: Personal barriers arise out of personal factors affecting the sender and the
receiver.

→Organisational Barriers: Organisational barriers refer to barriers in effective communication
which arise in formal organisations because of factors such as authority and hierarchical
relationships.

Measures to Overcome Barriers in Communication

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Some measures which can be adopted to overcome various barriers of communication:

→The understanding level of the receiver must be kept in mind while providing information.

→The language, tone and content of the information should be such that it does not harm the
sentiments of the receiver.

→ While communicating, the receiver must be regularly prompted to respond so as to ensure
that he/she understands the information.

→The sender must ensure that the information provided is complete in all respects.

→Both sender and receiver must be clear with regard to the basic idea of communication.

The sender must also be a patient listener and invite response and communication from the
receiver as well. Informal communication supports formal communication in the following
manner:

→In an informal organisation, the spread of information is faster than that in a formal
organisation.

→In an informal organisation, employees develop interpersonal social relations, which in turn
instil a felling of belongingness among them towards the organisation.

→Through informal communication, managers can get to know the true thinking or mindset of
employees which can prove helpful in decision making.

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