Notes Directing Class 12 Business Studies

Class 12 Notes

Please refer to the Directing Revision Notes given below. These revision notes have been designed as per the latest NCERT, CBSE and KVS books issued for the current academic year. Students will be able to understand the entire chapter in your class 12th Business Studies book. We have provided chapter wise Notes for Class 12 Business Studies as per the latest examination pattern.

Revision Notes Chapter 7 Directing

Students of Class 12 Business Studies will be able to revise the entire chapter and also learn all important concepts based on the topic wise notes given below. Our best teachers for Grade 12 have prepared these to help you get better marks in upcoming examinations. These revision notes cover all important topics given in this chapter.

Meaning:- Directing refers to the process of instructing, guiding, counselling, motivating and leading people in the organisation to achieve its objectives.

1. Directing Initiates Action: It helps in initiating action by the people in the organization towards attainment of desired objectives.
2. Directing Integrates Employee’s Efforts: Coordination of all the activities of an organization is very necessary.
It ensures that the individuals work for organizational goals
3. Motivation and Leadership: It motivates the subordinates by showing leadership qualities to work efficiently and to contribute their maximum efforts towards the achievement of organizational goals.
4. Directing Facilitates Change: Employees often resist changes due to fear of adverse effects ontheiremploymentandpromotion.Effectivedirectingthroughmotivation communication and leadership help employees to cope with changes in the environment.
5. Directing helps in Stability and Balance in the organization: Effective directing fosters cooperation and commitment among employees and helps I striking a balance between various
activities and departments.

Elements of Directing :
(i) Supervision: Implies overseeing the work of subordinates by their superiors. It is an act of watching & directing worker’s activities.
(ii) Motivation: It means the process of making subordinates to act in a desired manner to achieve certain organizational goals.
(iii) Leadership: Leadership is the process of influencing the behavior of people by making them strive voluntarily towards achievement of organizational goals.
(iv) Communications: is the process of passing information, experience, opinion etc. from one person to another.


  • Motivation means incitement or inducement to act or move.
  • Motivation is the process of stimulating people to action to accomplish desired goals.
    Three key terms = motive, motivation, motivators
    Motive: Inner state that energizes, activates and directs behavior towards goals. Arises out of unsatisfied needs and causes restlessness.
    Motivation: Process of stimulating people to action to accomplish desired goals.
    Motivators: Technique used to motivate people. E.g. = bonus, promotion, recognition etc.

Maslow’s Need Hierarchy Theory of Motivation
This theory was given by Abraham Maslow in 1943, and is based on human needs.


  • Satisfaction of needs influences people’s behaviour.
  • Needs are in hierarchical order.
  • Once need is satisfied only, the next higher need can motivate individuals.
  • Satisfaction of lower-level needs motivates to move to the next level of need.

1. Basic Physiological Needs: These are the most basic need such as food, shelter, sleep etc. In the organizational context, basic salary helps to satisfy these needs.
2. Safety/ Security Need: Provide security from physical and emotional harm E.g. Job security, stability Etc.
3. Affiliation/Belonging Need: These needs refer to affection, sense of belongingness, acceptance and friendship for mental satisfaction.
4. Esteem Needs: These include factors such as self-respect, prestige, autonomy status, recognition and attention.
5. Self-Actualization Needs: It is the highest level of need in the hierarchy. It refers to the drive to become what one is capable of becoming.

Notes Directing Class 12 Business Studies

Financial and Non-Financial Incentives

  • Incentives are the means to satisfy an employee’s needs and motives. These can be:
  • Financial
  • Non-Financial

Financial Incentives
Incentives offered to employees which are either in direct monetary form or can be valued in monetary terms.

Types of Financial Incentives
1. Pay and allowances: These include salary, dearness allowance and other allowances paid to employees.
2. Productivity linked wage incentives: Wages paid at different rates to increase productivity.
3. Bonus: Incentive offered above the wages or salary.
4. Profit Sharing: Providing a fixed percentage of profit to employees.
5. Co-partnership/ Stock option: Shares offered to employees at a price which is lower than the market price.
6. Retirement benefits: Benefits offered after retirement such as provident fund, pension, etc.
7. Perquisites: Benefits over and above the salary offered such as car allowance, housing, medical aid,

Non-Financial Incentives
Incentives which are given to provide psychological and emotional satisfaction rather than monetary satisfaction.

Types of Non-Financial Incentives
1. Status: It is the level of authority, responsibility and recognition an employee commands in the organization.
2. Organizational climate: Characteristics influencing an individual’s behaviour such as individual autonomy, reward orientation, consideration to employees, etc.
3. Career advancement opportunity: Opportunities of growth and development in the organization to the higher level.
4. Job enrichment: It refers to a variety of work offered to challenge the knowledge and skills of highly motivated employees.
5. Employee recognition programmes: It involves recognising and appreciating the contribution of employees in public.
6. Job security: It refers to the certainty and stability offered in a job about future income and work.
7. Employee participation: Involvement of employees in the decision making process, seeking their advice or suggestions.
8. Employee empowerment: Opportunities provided to employees to take decisions independently and perform jobs assigned to them.

Leadership is the process of influencing the behaviour of people in such a way that they voluntarily
work towards the achievement of organizational objectives.

Features of Leadership

  • It is the ability of an individual to influence others.
  • It tries to transform the behaviour of the subordinates.
  • It indicates interpersonal relationship between leader and followers.
  • It is exercised to achieve organizational goals.
  • It is a continuous process.

Leadership Styles
1. Autocratic leadership: in this style of leadership, a leader takes all the decisions on his own and gives
orders to his or her subordinate to implement them.
2. Democratic leadership: In this style of leadership a leader takes decisions after consulting with
subordinates and encourages them to participate in decision making.
3. Laissez faire leadership: In this style of leadership a leader gives freedom to his subordinate to take
decisions and execute work assigned to them and the leader acts as observer or guide.

It is the process of exchange of information between two or more people with an aim to create
common understanding.

Elements of Communication Process
1. Sender: The person who conveys his thoughts or ideas.
2. Message: Content intended to be communicated.
3. Encoding: Process of converting message into communication.
4. Media: Path through which an encoded message is transmitted to the receiver.
5. Decoding: It is the process of converting the encoded message in a readable format.
6. Receiver: The person who receives a communication message from the sender.
7. Feedback: It refers to the information or suggestions provided by the receiver to the sender in context to the communication or message he received.
8. Noise: The hindrances and obstruction to communication.

Formal and Informal Communication

  • The process of communication within an organization may be
  • Formal or
  • Informal.

Formal communication

  • It flows through official channels designed in the organization chart to communicate official information between employees.
  • Formal communication is classified as:
  • Vertical communication: It is the formal two-way communication between superior and subordinate and the communication flows upward or downward.
  • Horizontal communication: It is the formal two-way communication between employees working at the same level of authority.

Formal Communication Networks

  • Single chain: Communication flows from superior to his immediate subordinate.
  • Wheel: Superior acts as a hub of information and all subordinates communicate through the superior only.
  • Circular: Employees communicate with his or her adjoining people.
  • Free flow: All employees are free to communicate with each other without any restrictions.
  • Inverted V: An employee communicates with his or her immediate superior but may also communicate with his/her superior’s superior.

Informal communication

  • Communication between employees who are not officially related to each other is called informal communication, this type of communication may flow in any direction thus it is also called ‘grapevine’.
  • The informal communication spreads information rapidly and sometimes generates rumours.

Grapevine Network

Grapevine communication, also known as informal communication, is a communication that develops as a result of social interaction among employees and spreads without following the formal communication path. 
The types of grapevine communication networks are as follows.

  • Single Strand Network: An employee communicates with other employees in sequence.
  • Gossip Network: In a gossip network, one person spreads information to a large number of people.
  • Probability Network: In a probability network, an individual shares information with other people at random.
  • Cluster Network: Information in this network is first shared between two people who trust each other.
Directing Revision Notes