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CLASS: XII
SECTION: CF
SUBJECT: BUSINESS STUDIES
SESSION: 2023-24
CHAPTER 7: DIRECTING
NOTES
CONCEPT OF DIRECTING
Directing refers to the process of instructing, guiding, counselling, motivating and leading people in the
organisation to achieve its objectives.
• Initiates action: Managers get the work done in the organisation by giving directions.
• Takes place at every level of management: A pervasive function as it is performed from the top executive to the
supervisor.
• Continuous process: After giving instructions, it is also important for managers to motivate employees to give
their best performance for the organisation.
• Initiates at the top level and flows to the bottom level: Directing is initiated at the top level and flows to the
bottom through organisational hierarchy.

Enables employees to initiate action in the organisation

towards the attainment of different objectives

ELEMENTS OF DIRECTING
Effective managerial communication across all the levels in the organisation makes direction effective.

A. SUPERVISION
• Refers to the process where the activities of workers are guided towards the pre-determined objectives.
• Involves directly overseeing the work of workers.
• Ensures that work is carried out efficiently and towards the desired objectives through effective supervision.
• Good supervision helps in maintaining harmony and unity among workers.

B. MOTIVATION
• Refers to inducing workers to work and perform in a desired manner so as to achieve the goals of the
organisation.
• Influences the psychology of workers such that they are induced to work and perform better.
• Can be provided in the form of promotion, appraisal and recognition.
• Kind of motivation provided depends on the employee’s expectations and desires. For example, for one
employee, appraisal may be a motivating factor, while for another, praise from a senior or superior may
motivate him to improve performance.

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MASLOW'S NEED HIERARCHY THEORY OF MOTIVATION

• 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.
Hierarchy of needs as given by Maslow
1) Basic 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, the need for food, clothing and shelter. In
terms of an organisation, the requirement of a basic salary is a basic physiological need.
2) Security Needs: An individual requires physical as well as emotional security. For example, an employee
wishes for job security and stability in income.
3) Belonging Needs: It refers to the social needs of an individual in terms of affection, friendship and
acceptance. In other words, it refers to a feeling of belongingness to society.
4) Esteem Needs: It comprises elements such as respect, dignity and recognition in the peer group.
5) 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.
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 needs helps managers in using effective motivation.

INCENTIVES
Incentives are monetary or non-monetary tools to improve the performance of employees.

Financial/Monetary Incentives and Non-financial/Non-monetary Incentives

• Financial incentives refer to the direct monetary benefits given to employees by an organisation with the
objective of providing motivation to improve performance.
• Non-financial incentives are incentives which cater to the non-monetary needs of employees such as social
and psychological needs.

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Incentives
Financial Incentives Non-Financial Incentives
• Salary and allowances: It is the most basic form of • Position: Employees often require a rise in the
financial incentive. Regular incrementin salaries and status in terms of power and authority. It
other allowances act as good motivation for provides them psychological satisfaction.
employees.

• Performance-based incentives: Sometimes monetary • Organisational characteristics: Various

incentives can be given based on the performance of organisational characteristics such as employee
employees. In other words, they can be suitably freedom and recognition ofperformance play an
rewarded for good performance. This motivates important role in motivating employees. For
workers toimprove work efficiency. example, if an employee’s work is recognised
and praised, it would encourage him to further
improve performance.

• Bonus: Bonus refers to the monetary reward which is • Work enrichment: Challenging work endowed
over and above the basic salary. Itcan be in the form with greater responsibility andrequiring higher
of cash and gifts. It is given to employees in order to knowledge and skill enhances the interest of
recognise their exemplary performance in the employees. Itprovides employees prospects for
organisation. personal growth. Thus, it proves to be a good
source of motivation.

• Stock option: Employees are offered sharesof the • Career opportunities: Employees must be given
company at a discounted price. Thishelps in developing ample opportunities to develop theirskills and
a feeling of belongingness among employees. knowledge such that they are able to improve
their career prospects. This can be done through
training and development programmes.

• Sharing of profit: Employees are offered ashare in the • Job security: Employees need a certain degree
profits of the organisation. This motivates workers to of job security in the sense that they must be
improve performance so as to contribute positively certain about their income in the future. This is
towards the growthof the organisation. would enable them to work with greater
passion.

• Retirement benefits: Employees may be offered • Involvement: Employees must be involved in

retirement benefits by the organisation. These benefits decision making, especially in issues pertaining
can be in the form of pensions, gratuity and provident to them. This provides workers a feeling of
fund. This instils a feeling of security and stability belongingness towards the organisation.
among
employees.

• Fringe benefits: It refers to the additional benefits • Employee recognition programmes: Almost all
provided to employees over their salaries. For employees have an urge or want recognition for
example, housing allowance and the work done by them.
medical allowance. Recognition or appreciation of work

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C. LEADERSHIP
• Refers to influencing the behaviour of employees such that there is an improvement in their
willingness to work and achieve organisational objectives.

• Good leadership boosts the self-confidence of workers and induces workers to work to the best oftheir
capabilities.

Features of Leadership
• Ability of an individual to influence others
• Bring change in behaviour of others
• Interpersonal leadership between leaders and followers
• Continuous process
• Work to achieve a common goal

Leadership Style
Leader’s behavioural pattern
1) Autocratic Leadership • Exercises complete control over subordinates
• Centralises power in himself and takes all the decisions without
consulting subordinates
• There is only one-way communication
• Does not delegate authority and gives orders to subordinates

2) Democratic Leadership • Takes decision in consultation with subordinates

• Delegates and decentralises authority
• Leader follows the opinion based on the majority
• Given freedom on thinking expression
• Listens to grievances and suggestions of subordinates
• Exercise more control by using forces within the group

3) Laissez Faire / Free-rein • Involves complete delegation of authority so that subordinates

Leadership themselves take decisions
• Leader avoids using power until necessary
• Serves only as a contact to bring information and resourcesneeded by
subordinates
• Subordinates are made responsible for their work
• Maximum scope for development

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