CBSE Class 12 Business Studies Revision Notes Chapter 7

Class 12 Business Studies Chapter 7 Notes

Commerce Class 12th NCERT Business Studies is a collection of great chapters that aims to enhance knowledge in various aspects of business and organisation. It teaches students how to operate a business and where they should focus their efforts. Directing is the seventh chapter in Class 12 Business Studies. This chapter discusses how business leaders should lead a team to take their company to new heights. The team of Extramarks experts have created Business Studies Class 12 Chapter 7 Notes to help the students prepare for the forthcoming board examinations. 

Business Studies Class 12 Notes Chapter 7 Directing is provided with a very simple language and step by step explanations. These notes are beneficial for students to understand the chapter quickly . Not limiting themselves to just Class 12 Business Studies Chapter 7 Notes, students may access several additional study materials on the Extramarks website. All materials, including NCERT book answers, CBSE revision notes, CBSE sample papers, CBSE previous year question papers, and so on, are available to students.

Key Topics Covered in Class 12 Business Studies Chapter 7 Notes

The key topics covered under Class 12 Business Studies Chapter 7 Notes include:

Directing 

Directing can be defined as a process when a superior gives instructions, direction, and counselling to a subordinate to encourage and lead them to attain their goals. The subject experts at Extramarks have prepared Class 12 Business Studies Chapter 7 Notes that will be handy for the students. 

Characteristics of Directing

• Initiating Action: Directing is needed at all levels. A manager is responsible for directing, and planning, organising, staffing, and controlling.
• Directing Occurs at All Levels of Management: It is so because every manager has to undertake this role; hence it occurs at all levels of management.
• Directing is a Continuous Process: It occurs at all levels of the organisation to ensure that all actions are directed toward achieving organisational goals.
• Flow of Direction Begins from Top to Bottom: Directing starts from the top of the organisational hierarchy downwards.

Importance

• Initiating Action: It assists in getting individuals in the company to take action towards achieving desired goals.
• Directing Integrates Employee Efforts: Coordinating all of an organisation’s efforts is necessary. A manager’s job is to motivate people and get them to work together as a team.
• Motivation and Leadership: It inspires subordinates to perform effectively and put their best efforts to accomplish the organisational goals by demonstrating leadership skills.
• Directing Facilitates Change: Employees sometimes oppose change because they fear negative consequences for their jobs and advancement. Employees can cope better with changes in the environment when directed effectively through motivation, communication, and leadership.
• Directing contributes to organisational stability and balance: Effective directing develops employee collaboration and commitment while also creating a balance between diverse activities and departments.

Principles of Directing

Effective directing is a difficult task since it includes several complexities. A manager must deal with people from various backgrounds and expectations. This makes the directing procedure more difficult. The Class 12 Business Studies Chapter 7 Notes are prepared by the experts on the subject, and we bring forth to you the principles of Directing: 

• Maximum Individual Contribution: Directing tactics must be used to maximise the individual contributions of employees and fulfil the corporate goals. For the organisation’s efficiency, it should bring forth the untapped energy of employees.
• Harmony of Objectives: Motivating employees and directing their efforts towards attaining corporate and personal goals is an important job of management. Individual interests should always take second place in the groups. The idea indicates a balance between private and public interests.
• Unity of Command: This concept asserts that a single individual should report to only one superior. When a person gets commands from many superiors, chaos, confusion, conflict, and disorder ensue.
• Appropriateness of Direction Technique: When directing people, a manager should employ appropriate motivation and leadership techniques based on subordinate requirements, capabilities, attitudes, and other environmental elements.
• Managerial Communication: Subordinates should be given clear instructions, and sufficient feedback should be given to ensure that they understand the instructions. It is essential to have efficient communication to have successful direction, which allows for the free flow of ideas, information, recommendations, complaints, and grievances.
• Use of Informal Organisation: A manager must be aware of the organisation’s informal groupings and use them to steer effectively.
• Leadership: Managers should exhibit effective leadership since it may favourably affect subordinates without producing displeasure.
• Follow Through: A manager not only gives orders and instructions but also monitors employee performance to verify that work is being done correctly. They should watch their subordinates at work and reprimand them when they make mistakes.

Elements of Directing

Elements of Directing is one topic that makes up almost the entire chapter. Class 12 Business Studies Chapter 7 Notes make it easier for students to read and comprehend the chapter. There are four elements of Directing:

• Supervision: It involves supervisors monitoring the work of subordinates. It is the act of keeping an eye on and supervising the operations of workers.
• Motivation: It refers to the practice of persuading subordinates to perform in a certain way in order to attain specific organisational objectives.
• Leadership: Leadership is influencing people’s behaviour by motivating them to work willingly toward organisational goals.
• Communication: The process of sharing knowledge, experience, opinion, and from one person to another is known as communication.

Supervision

• It is a method of directing the efforts of employees and other resources in order to achieve specific goals.
• Supervising workers’ and employees’ jobs and activities.
• Instructing, watching, supervising, and mentoring personnel are part of this job.
• The word ‘Supervisor’ is employed at the operative’s management level since it is a crucial function at the lower levels of management.

Extramarks provides Class 12 Business Studies Chapter 7 Notes that give students pointwise point explanations of the chapter in detail. Browse through Extramarks for these handy notes.

Importance of Supervision

• The supervisor maintains cordial ties with the employees.
• Connects employees to management’s goals and ideas and represents employees’ concerns and issues to the management.
• Assists in the maintenance of employee solidarity.
• Giving directions and inspiring employees contribute to the attainment of goals.
• Provides workers with training and develops them into a productive and talented team.
• It helps release dormant energy in employees and the development of good morale.
• Provides ideas about how to improve one’s talents.

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Motivation

Managers utilise this stimulant to get individuals to behave in a certain way in order to achieve organisational goals. Make the most of Class 12 Business Studies Chapter 7 Notes, provided on the Extramarks website.

Motivational words that are related include:

• Motive: Motive is an individual’s inner condition that leads his behaviour towards a goal.
• Motivation: Motivation is the act of inspiring individuals to take action.
• Motivators: Motivators are approaches that are used to motivate individuals.

Features of Motivation

• Motivation- A Psychological Phenomenon: Since motivation is an internal emotion, such as an urge, a drive, or a desire, it cannot be pushed on employees.
• Motivation- A Goal Oriented Behaviour: It enables individuals to act in a certain way in order to attain their objectives. A motivated individual strives to attain their objectives.
• Motivation- can be both positive and negative: Positive motivators are things like high pay that have a positive impact, whereas negative motivators are punishments that instill fear in employees.
• Motivation- A Complex Process: It requires interacting with people with various personalities and expectations.

Motivation Process

• Unsatisfied Want: A person’s unmet need is the starting point for motivation.
• Tension: As the desire is not fulfilled, frustration rises in the individual’s thoughts.
• Drive: Frustration drives people to seek other ways to fulfil their demands.
• Search Behaviour: People choose one of the numerous possibilities and begin acting accordingly.
• Satisfied need: people assess if their need has been satisfied after a long time.
• Reduction of Tension: The individual’s aggravation and tension are lifted after satisfying the need.

Importance of Motivation

• Improves Performance: It meets the demands of employees, leading to greater levels of performance that contribute to the organisation’s goals.
• Development of positive attitude: Motivational tactics remove negativity and instill a drive to reach one’s full potential.
• Reduce Employee Turnover: Employee motivation is the primary cause of high turnover. Therefore by inspiring employees, new recruiting and training costs may be decreased.
• Reduce absenteeism in the organisation: Work may become a source of joy, and workers’ absenteeism can be decreased if enough motivation, decent working conditions, and rewards are provided.
• Introduce changes smoothly: Managers may use motivation to implement changes without successfully encountering much pushback from employees.

Maslow’s Need Hierarchy Theory of Motivation

Abraham Maslow proposed this theory in 1943, and it is based on human needs. Extramarks Class 12 Business Studies Chapter 7 Notes explains this topic pointwise extensively. 

Assumptions:

• People’s behaviour is influenced by their demands being fulfilled.
• The needs are arranged in a hierarchical sequence.
• Individuals might be motivated by the next greater need once the previous one has been met.
• Satisfaction with lower-level demands encourages people to progress to the next level.

Hierarchy of Needs:

Employees’ needs and wants are classified into a hierarchy of five categories, according to Maslow’s need hierarchy theory:

• Needs of Basic Psychology: Hunger, thirst, shelter, sleep, and other fundamental necessities are included.
• Needs of Safety/Security: It comprises security and protection requirements such as employment security.
• Needs of Belonging/Social/Affiliation: It encompasses desires such as affection, a sense of belonging, and friendship, among others. 
• Needs of Esteem: It contains desires such as self-respect, autonomy, status, and acknowledgement, among others.
• Needs of Self Actualisation: It comprises the desire to achieve a goal.

Financial and Non Financial Incentives

This section of the Class 12 Business Studies Chapter 7 Notes details incentives. Incentives are a way to meet an employee’s wants and requirements. Class 12 Business Studies Chapter 7 Notes will give a precise insight into both financial and non-financial incentives; these include:

• Financial
• Non-Financial

Financial Incentives

Financial incentives are rewards that can be measured in monetary terms and are used to inspire individuals to perform better.

Types of Financial Incentives:

• Bonus: Beyond the wage or compensation, this incentive is granted.
• Pay and Allowances: Employees are given a wage, a dearness allowance, and additional allowances.
• Co-Partnership/Stock Option: Employees are provided shares at a lower price than the market price.
• Prerequisites: Benefits and the pay granted, such as a vehicle allowance, housing, and medical assistance, among others.
• Productivity linked wage incentives: Wages are given at various rates to boost productivity.
• Retirement Benefits: After-retirement benefits such as provident funds, pensions, and so on.
• Profit-Sharing: Employees receive a predetermined percentage of profits.

Types of Non-Financial Incentives:

• Employee Empowerment: Ability for workers to make decisions on their own and complete tasks that have been allocated to them.
• Employee Participation: Involving employees in decision-making processes and asking their views or recommendations.
• Job Security refers to the assurance and stability provided by a job in terms of future earnings and work.
• Employee Recognition programmes: These include publicly recognising and thanking employees’ contributions.
• Job Enrichment refers to several tasks designed to test highly motivated individuals’ knowledge and talents.
• Career Advancement Opportunity: Possibilities for advancement and development in the company at a higher level.
• Organisational Climate: Individual autonomy, reward orientation, employee concern, and other characteristics that influence an individual’s behaviour.
• Status: It refers to an employee’s amount of power, responsibility, and recognition inside the business.

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Leadership

Leadership is the process of shaping people’s behaviour to contribute to the attainment of organisational goals actively. Class 12 Business Studies Chapter 7 Notes have been prepared by Extramarks experts; these notes throw light on all aspects of leadership.

Features of Leadership:

• It refers to a person’s capacity to influence others.
• It attempts to change the behaviour of subordinates.
• It denotes the leader’s interpersonal interaction with their followers.
• It is used to attain organisational objectives.
• It’s a never-ending process.

Importance of Leadership:

• It has an impact on people’s behaviour by encouraging them to have a positive attitude.
• It allows subordinates to fulfill their needs and desires while also increasing their confidence.
• It helps employees in comprehending the need for change and easily implementing changes.
• Through healthy conversations, efficiently explains and resolves disputes.
• It prepares people to take on management duties by training and developing them.

Qualities of a Good Leader

• Social Skills: A leader should be friendly and sociable with his coworkers and subordinates.
• Physical Features: Should be in good shape and radiate pleasant energy.
• Decisiveness: A leader should be able to make quick judgments and stick to them.
• Knowledge: Should possess the necessary knowledge and skills.
• Self Confidence: A leader should have a high level of self-assurance in order to deal with challenging conditions.
• Integrity: Must have a high level of honesty and ethics.
• Motivation Skills: Individuals should be encouraged to enhance their performance.
• Initiative: Should seize the chance and exploit it to the company’s benefit. 
• Communication Skills: Must be able to communicate and persuade others successfully.

Types of Leadership Styles

• Autocratic Leadership: In this leadership style, the leader makes all of the choices and then gives commands to their subordinates to carry them out.
• Democratic Leadership: A leader in this leadership style makes choices after talking with subordinates and encouraging them to participate in the process.
• Laissez Fair Leader: In this leadership style, the leader delegates authority to their subordinates to make choices and complete tasks, with the leader acting as an observer or guide.

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Communication

Communication is the process of two or more individuals exchanging information in order to reach a shared understanding. Class 12 Business Studies Chapter 7 Notes on Extramarks website are prepared by experts and provide a clear insight into the topic.

Elements of Communication Process

• Sender: The individual who expresses his or her opinions or thoughts.
• Message: Content that is meant to be shared.
• Encoding: The transformation of a message into communication.
• Media: The path via which an encoded message is sent to the recipient.
• Decoding: The process of turning an encoded communication into a readable format is known as decoding.
• Receiver: The individual who receives the sender’s communication message.
• Feedback: In the context of the communication or message he received, it refers to the information or recommendations supplied by the recipient to the sender.
• Noise: Communication’s hurdles and stumbling blocks.

Class 12 Business Studies Chapter 7 Notes will help students prepare for their upcoming board examinations. Students can carefully go through these and comprehend all the chapter’s concepts.

Importance of Communication:

• Provides Motivation and Boosts Morale: Managers use good communication to understand and meet the demands and motivate their staff.
• Effective Leadership: A manager’s ability to lead and influence subordinates depends on effective communication.
• Industrial Peace and Cooperation: The two-way communication between management and employees encourages collaboration and mutual understanding.
• Managerial efficiency increases: Assists supervisors in communicating essential information to subordinates, allowing them to work more efficiently.
• Basis of Decision Making: Communication acts as a channel for conveying information required for decision-making.
• Smooth working of an Enterprise: It enables all individuals to engage, allowing for a business’s smooth and unhindered operation.
• Basis of Coordination: By explaining corporate goals, it serves as a foundation for employees to organise their efforts.

Formal And Informal Communications

This section of Class 12 Business Studies Chapter 7 Notes defines the communication process inside a company and includes:

• Formal Communication
• Informal Communication

Formal Communication

Formal communication is channelled through the organisation chart’s specified channels. Between superiors and subordinates, there is a two-way information flow: the communication of oral or written communications.

The communication network is the pattern through which information moves inside an organisation.

Formal communications can be specified as:

• Horizontal Communication: The official two-way communication between employees at the same authority level.
• Vertical Communication: It is a formal two-way communication system that goes upward or downward between superior and subordinate.

Formal Communications network:

• Inverted V: An employee may speak with both their immediate superior and their superior’s superior.
• Free Flow: All workers have complete freedom to talk with one another.
• Circular: Employees communicate with those in their direct proximity.
• Wheel: The superior serves as a communication hub, with all subordinates sharing only through the superior.
• Single Chain: The superior communicates with his immediate subordinate.

Informal Communication

Informal communication is defined as communication that occurs outside of the formal channels of communication.

Conversations, e-mails, text messages, and phone calls between socialising employees are examples of informal communication, sometimes referred to as the grapevine, because it spreads throughout the organisation.

Some of the popular Grapevine Communication networks:

• Single Strand Network: One employee communicates with other workers in a proper sequence. In another way, one person interacts with another, who then connects with still another. As a result, information is shared down a chain of people.
• Gossip Network: One individual conveys information to a huge number of others in a gossip network. A worker communicates with everyone on a case-by-case basis. Such are rumours about a new employee who has recently joined the company, and so forth.
• Probability Network: An individual in a probability network distributes information with other people at random. The person is careless about who he shares his data with.
• Cluster Network: In this network, information is first transferred between two people who trust one another. The knowledge is then passed on by one of them to another, who then passes it on to another, and so on.

Experts at Extramarks have produced Class 12 Business Studies Chapter 7 Notes that provide students with a thorough comprehension of the subject. Get on board and check it on your own.

Barriers To Communication

Semantic Barrier: Concerned with challenges with communication and blockages in the encoding or decoding of messages into words or impressions. The following are some semantic barriers:

• Badly expressed message: Inadequate vocabulary, wrong-meaning terms, and other factors can sometimes prevent conveying the intended meaning.
• Symbols with different meanings: The recipient may be confused by words with diverse meanings.
• Faulty translations: The meaning of communication in one language will be changed in another language if it is translated.
• Unclarified assumption: Assumptions can be interpreted in a variety of ways, leading to confusion.
• Technical jargon: When professionals use technical terms, it leads to confusion among coworkers.
• Body language and gesture decoding: Everybody’s action conveys a different message.

Psychological Barrier: The mental state of the sender or recipient may impact the message’s meaning. The following are psychological barriers:

• Premature evaluation: Not listening and passing judgements can lead to major misunderstandings.
• Lack of attention: The sender may be disappointed if the recipient does not listen well since their mind is distracted.
• Loss by transmission and poor retention: When oral communication travels across numerous channels of communication, it degrades the message’s structure or causes it to be sent incorrectly.
• Distrust: If the parties do not trust one other, they will be unable to comprehend each other’s communication in its original context.

Organisational Barrier: Communication barriers may arise due to organisational authority relationships, rules, and regulations. The below stated are organisational barriers:

• Organisational policy: The free flow of communication may be hampered by policies.
• Rules and regulations: Strict restrictions and regulations, such as following a specific communication method, may cause the information to be delayed.
• Status: Managers who are conscious of their status make it difficult for themselves and their staff to communicate effectively.
• Complexity in organisational structure: Due to several filter points, an organisation with too many levels may cause communication to be delayed or distorted.
• Organisational facilities: Inadequate facilities may obstruct the free flow of communication and cause issues. Certain organisational amenities, such as social gatherings, complaint boxes, and operational openness, are required for a free and adequate flow of communication. The lack of such facilities obstructs information flow.

Personal Barrier: These barriers develop due to personal characteristics affecting both the sender and the receiver’s ability to communicate effectively. The following are personal barriers:

• Fear of challenges to authority: Information that might jeopardise the superior’s authority may not be shared with subordinates.
• Lack of confidence of superior in his subordinates: Sometimes superiors lack confidence in their subordinates, and as a result, they may reject any recommendations or comments offered by the subordinates.
• Unwillingness to communicate: Ineffective communication may result from subordinates’ unwillingness to speak with their superiors.
• Lack of proper incentives: Employees may be discouraged from taking the initiative or providing knowledge if no incentives exist.

Subject experts at Extramarks have produced Class 12 Business Studies Chapter 7 Notes, giving importance to all details and keeping in mind the guidelines laid by CBSE. 

Ways To Improve Communication Effectiveness

This section of Class 12 Business Studies Chapter 7 Notes offers ways to improve communication effectiveness. This part has been produced very thoroughly by the subject expert. The following are various ways to improve communication effectiveness:

• Before communicating, be sure your thoughts are clear.
• Communicate in a way that meets the needs of the receiver.
• Before communicating, get advice from others.
• Be conscious of the message’s language, tone, and content.
• Deliver information that is useful and valuable to the audience.
• Ensure that suitable feedback is given.
• Communicate for both the now and the future.
• Follow-up communication helps remove obstacles, such as misinterpretation of orders issued by managers to subordinates.
• Listen attentively.

Class 12 Business Studies Chapter 7 Notes here at Extramarks is as per the latest CBSE syllabus. Register online to access these handy notes and excel in your board examinations.

Class 12 Business Studies Chapter 7 Notes: Exercises and Answer Solutions

Class 12 Business Studies Chapter 7 Notes are available at Extramarks website. Subject experts have prepared these notes as per the guidelines of CBSE. Register online with Extramarks to clear all the doubts and get access to all exercises and answer solutions. 

A list of detailed solutions for all the questions is listed below:

• Very Short Answer Type Questions and Solutions- 4 Questions
• Short Answer Type Questions and Solutions- 6 Questions
• Long Answer Type Questions and Solutions- 5 Questions

Stay tuned with Extramarks to get exclusive updates on the upcoming examinations and exam pattern, syllabus, notes, etc.

Class 12 Business Studies Chapter 7 Notes: NCERT Exemplar Class 12 Business Studies

NCERT Exemplar Class 12 Business Studies answers are provided here to assist the students in their final exam preparation. These exemplar questions are a little more difficult, and they cover a variety of concepts covered in each chapter of the class 12 Business Studies course. Extramarks provides students with access to these exemplar problems and solutions for class 12 Business Studies chapter by chapter.

Students will completely understand all the concepts covered in each chapter by practising this NCERT Exemplar for Business Studies class 12. Each question in these resources is related to the topics covered in the CSBE Class 12 syllabus and is created by our specialists to offer the best solutions to students’ experiences. All of these questions reflect the question pattern found in NCERT books to match the topics taught in each class and give the greatest practising materials or worksheets for students.