NCERT Solutions Class 12 Business Studies Chapter 7

NCERT Solutions Class 12 Business Studies Chapter 7- Directing

To get a detailed understanding of Class 12th Business Studies Chapter 7- Directing, students should refer to Extramarks NCERT solutions booklet. Class 12 students can now easily learn and revise essential points, definitions, and questions and answers from the study material offered by Extramarks faculty. 

Directing – NCERT Solutions for Class 12 Business Studies Chapter 7 are prepared by subject matter experts in simple language with  detailed explanations. Students can access a variety of additional study tools on the Extramarks website in addition to the NCERT solutions.  Also, these solutions address   any concerns regarding the concept by giving in-depth knowledge through study material on the chapter- Directing.  

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Key Topics Covered In NCERT Solutions Class 12 Business Studies Chapter 7

Following are the key topics covered in NCERT Solutions Class 12 Business Studies Chapter 7- Directing:

What is Directing?

Here’s the detailed information on each subtopic in NCERT Solutions Class 12 Business Studies Chapter Directing.

What is Directing?

The process of instructing, guiding, counselling, inspiring, and leading individuals in an organisation to achieve its goals is referred to as directing.

The following are the key qualities of directing:

  • While performing his tasks in the organisation, a manager must do this role in addition to planning, organising, staffing, and controlling.
  • The function of directing is performed by every manager, from the top executive to the supervisor.
  • Directing is a never-ending process. It occurs throughout the company’s life, regardless of who is in charge.
  • Directing begins at the top and works its way down the organisational structure.

Importance of Directing

The significance of directing may be seen in the fact that every action in the organisation begins with directing. Getting people to work together to achieve a common goal. Extramarks presents NCERT Solutions Class 12 Business Studies Chapter 7 which explains the importance of Directing:

  • Directing assists people in the organisation in taking action toward achieving their goals.
  • Directing integrates workers’ activities in the organisation so that each individual effort contributes to the company’s overall success. As a result, it assures that employees strive toward organisational objectives.
  • By encouraging and providing effective leadership, directing helps workers realise their full potential and capacities.
  • When it comes to implementing changes in the workplace, effective direction via incentive, communication, and leadership may assist in eliminating opposition and foster the necessary collaboration.
  • Because it develops collaboration and commitment among employees, effective directing helps to bring stability and balance to the organisation.

Three Principles of Directing

The guiding role of management is fairly complicated. To help in the guiding process, several concepts have been devised. The following are the guiding principles:

  • Maximum contribution of an individual: According to this notion, a manager should utilise directing strategies that inspire people to perform to their full potential. It should inspire people to strive toward the company’s objectives. That is, each employee should contribute as much as possible to the organisation’s objectives. Managers, for example, can urge staff to perform better by using proper reward and motivation  tactics.
  • Direction Techniques Appropriateness: The suitable directing strategy should be employed according to this idea. It should be tailored to the needs and attitudes of the employees. One employee, for example, can be driven by praise, while another wants a monetary reward. Consequently, depending on the scenario, the manager should use suitable directing strategies.
  • Managerial Communication: Excellent directing necessitates effective communication. The subordinates must be able to understand the superior’s instructions and directives. In addition, subordinates must be allowed to converse freely with superiors. They should be allowed to communicate their thoughts and ideas openly. As a result, good two-way communication between superiors and subordinates is essential.

Elements of Directing:

Namely there are three elements of Directing. Extramarks NCERT Solutions Class 12 Business Studies Chapter 7 provides the details of the elements of Directing, which are as follows:

  • Supervision
  • Motivation
  • Leadership
  • Communication


There are two ways in which one can interpret the phrase supervision. It may be interpreted in two ways: first, as a component of directing, and second, as a role carried out by supervisors in the organisational hierarchy.

The process of guiding the efforts of employees and other resources to achieve the desired objectives is known as supervision. It entails supervising subordinates’ work and issuing directions to guarantee the most efficient use of resources and the attainment of work objectives.

Importance of Supervision

The importance of supervision may be seen in the many functions that a supervisor plays. These are described in detail below:

  • Supervisor keeps in touch with employees on a daily basis and develops pleasant relationships with them. An excellent boss serves as a mentor, friend, and philosopher to their employees.
  • The supervisor serves as a link between employees and management. On  one side, he communicates management ideas to employees, and on the other, he communicates worker difficulties to management.
  • The supervisor is responsible for ensuring group cohesiveness among the employees under his command.
  • The supervisor ensures that the task is completed in accordance with the goals stated. He accepts responsibility for assignment completion and successfully inspires his team.
  • Workers and employees receive excellent on-the-job training from the supervisor.
  • Supervisory leadership is critical in influencing the organisation’s workforce. A supervisor with strong leadership abilities can boost employee morale.
  • A good supervisor evaluates the job and provides feedback to the employees.

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Incitement or incentive to act or move is referred to as motivation. It refers to the practice of persuading subordinates to perform in a specific way in order to attain certain organisational goals.

Motivational words that are related include:

  • Motive: Motive is an individual’s inner condition that leads his behaviour toward 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 instil 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 instil 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

Maslow’s Need Hierarchy Theory helps in the understanding of motivation’s complexities. Each human, according to Maslow, has a set of five basic needs   that may be ordered in a hierarchy. Understanding an employee’s wants might help management better comprehend their conduct. Employees can be appropriately motivated when their needs have been identified. Abraham Maslow proposed this theory in 1943, and it is based on human needs. Extramarks NCERT Solutions Class 12 Business Studies Chapter 7 explains this topic pointwise extensively. 


  • People’s behaviour is influenced by their wants being met.
  • 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 of lower-level demands encourages people to progress to the next level.

Hierarchy of Needs:

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

  • Basic Physiological Needs : Hunger, thirst, shelter, sleep, and other fundamental  needs are included.
  • Safety/Security Concerns: This category covers concerns about security and protection, such as work security.
  • Affiliation/ Social/ Belonging Needs: This category comprises desires for affection, a sense of belonging, and friendship, among other things.
  • Self-Esteem Needs: This category encompasses self-respect, autonomy, status, and acknowledgement.
  • Self-Actualisation Needs:  It is the highest level of need in the hierarchy. It refers to the drive of what one is capable of becoming and achieving those goals.

Maslow’s hierarchy of needs theory is generally acknowledged and utilised by managers as a basis for motivation. It is conceivable, however, that an individual’s requirements do not always follow the hierarchy’s precise sequence. Understanding Maslow’s hierarchy of wants, on the other hand, may help managers practise effective motivation.

Incentives means all measures that are used to motivate people to improve performance. These incentives may be classified as:

Financial and Non Financial Incentives

Extramarks NCERT Solutions Class 12 Business Studies Chapter 7 provides a detailed explanation on the topic of Financial and Nonfinancial Incentives.

Financial Incentives

Financial incentives are monetary rewards offered to employees to inspire or reward them for improving their performance. The following are some examples of financial incentives used in businesses.

  • Allowances and Salary: Salary and allowances are the most fundamental type of financial incentives in any firm. When employees’ pay  is hiked  on a regular basis and they are given allowances, they are more motivated.
  • Productivity Linked Wage Incentives: High-performing employees are regularly rewarded financially. Employees are motivated to increase their efficiency and performance due to this.
  • Bonus: A bonus is a one-time payment made in addition to the regular wage. It can take the shape of cash, gifts, paid vacations, and other forms of compensation. During festival seasons, certain organisations, for example, provide incentives, such as the Diwali bonus.
  • Stock option: Employees are provided business shares at a cheaper price than the market price under this incentive programme. This gives the employee a feeling of ownership and belonging, motivating him to contribute to the organisational  goals.
  • Sharing profit: The organisation in this example distributes a percentage of its income to its employees. Employees are more likely to actively contribute to the company’s success as a result of this.
  • Retirement benefits: Many companies offer pensions, gratuities, provident funds, and other retirement benefits to their employees. As a consequence, employees will feel more safe and stable.
  • Perquisites: An organisation may give additional benefits to its employees in addition to the basic wage, such as a housing allowance, medical allowance, and so on.

Non Financial Incentives:

Non-financial incentives are those that are offered in exchange for psychological and emotional gratification rather than monetary gain.

Non-financial incentives are utilised in companies in the following ways:

  • Status: In the organisational context, status means the ranking of positions in an organisation. In other words, status is given to a person who is holding a managerial position. 
  • Organisational Climate: Organisational climate indicates the characteristics which describe an organisation and distinguish it from another one. 
  • Career Advancement Opportunity: A company must provide employees with appropriate skill development programmes and a sound promotion policy to achieve promotions.
  • Job Enrichment: This aspect covers designing employee jobs to include an additional variety of work content with higher skills and knowledge.
  • Job Security: Stability is very important for all human resources. Employees want job security and stability of salary income so they are not bothered about it and can provide their 100% to their work.
  • Employee Recognition Programmes: Respect and appreciation are crucial motivators for all human beings. Employers should have well-defined employee recognition programmes to appreciate and acknowledge the good performance and work done by their employees.
  • Employee Participation: Empowering employees with decision making is important. It would give them a more sense of belonging in the organisation.

Subject experts at Extramarks have created  NCERT Solutions Class 12 Business Studies Chapter 7,  that  pay close attention to all details and  the guidelines laid by CBSE so that each and every student can benefit irrespective of their intelligence level. 


Leadership is the practice of influencing people’s behaviour by motivating them to work willingly toward organisational goals. Leadership is defined as an individual’s capacity to establish positive interpersonal relationships with followers while motivating them to contribute to achieving organisational goals. 

Features of Leadership:

  • Leadership refers to a person’s capacity to influence others.
  • Leadership aims to influence other people’s behaviour.
  • Relationships between leaders and followers are referred to as leadership.
  • Leadership is used to help the organisation attain its common goals.
  • Leadership is a lifelong endeavour.

Importance of Leadership:

Extramarks NCERT Solutions Class 12 Business Studies Chapter 7 presents pointwise notes on the importance of leadership, which are as follows:

  • People’s behaviour is influenced by leadership, and they are encouraged to give their efforts to the organisation’s advantage.
  • A leader develops personal relationships with their followers and assists them in meeting their requirements.
  • The leader is crucial in bringing about the necessary changes in the organisation. He convinces, explains, and motivates individuals to embrace change wholeheartedly.
  • A good leader manages disagreements well and prevents negative consequences from arising from them. A good leader constantly enables his followers to express their opinions and disagreements while persuading them with appropriate explanations.
  • The leader instructs their followers.

Qualities of a Good Leader

It is claimed that a person must exhibit certain attributes in order to be a good leader.

Some characteristics of a good leader include:

  • Physical attributes: Attractive people have appealing physical traits such as height, attractiveness, and health. A healthy and energetic individual is capable of working hard and effectively and can thus be admired. As a result, the leader has the ability to encourage his subordinates to work more and produce better results.
  • Honesty: A good leader must always be truthful. He must be truthful and uphold ethical and moral standards. He should be an example to others in terms of honesty, ethics, and principles.
  • Intelligence: A strong mental presence, as well as expertise, is required in a leader. He should be capable of examining and resolving issues that occur in the course of his work. He must possess the essential intelligence to make rational and fact-based judgments.
  • Inspiration: A leader should be someone who inspires and motivates others. He must, in other words, provide a good example of labour, performance, and values. He must be able to inspire a drive in his employees to work to their full potential.
  • Confidence: A leader should be confident in their abilities. In addition, he must be able to maintain his self-assurance in the face of hardship. A leader can only engender confidence in his followers if he is confident in himself.
  • Responsibility: A leader should take ownership of their group’s work and duties. He should embrace the burden of being held accountable for the faults of his subordinates. He must, however, share his accomplishment with his employees as a symbol of encouragement.
  • Effective Communication ability: A leader, acts as a link between higher-ups and lower-level employees. He must be able to properly communicate to his superiors the issues and ideas of his subordinates. He should also be a patient listener and a counsellor.
  • Ability to make good decisions: A good leader can make good judgments based on logic, facts, and data. He should also be confident enough in himself to stick to his decisions and avoid being confused.
  • Social behaviour: He should keep a positive and encouraging attitude toward his employees. He must be able to empathise with others and sustain healthy interpersonal interactions.
  • Dynamic: A leader must have a vibrant and extroverted demeanour. To help the business, he must be able to take on new projects and question existing norms.

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 Faire 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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A manager’s ability to direct is largely dependent on his ability to communicate. As a result, organisations place a strong focus on enhancing the communication abilities of both managers and employees.

Communication may be described in a variety of ways. It is defined as a process of exchanging ideas, viewpoints, facts, sentiments, and so on amongst or among individuals in order to reach a shared understanding.

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.

Importance of Communication:

  • Provides Motivation and Boots 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, allows  smooth and unhindered operation of the business.
  • Basis of Coordination: Explaining corporate goals serves as a foundation for employees to organise their efforts.

Formal and Informal Communication

Formal and informal communication are two types of communication that occur inside an organisation.

Formal communication:

Formal communication is channelled through the organisation chart’s designated channels. This communication might occur between a superior and a subordinate, a subordinate and a superior, or between employees or managers in the same cadre. Oral or written messages are both acceptable; however, they are usually documented and filed at the office. Vertical and Horizontal formal communication are two types of formal communication.

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

Formal Communication networks:

  • Single chain: Between a boss and his subordinates, this network exists. Because an organisation’s structure has  many levels, communication goes through a single chain from each superior to his subordinate.
  • Wheel: In a wheel network, all subordinates reporting to one superior interact solely with him since he  acts as  a hub of the  wheel . Subordinates are not permitted to converse with one another.
  • Circular: Communication travels in a circle in a circular network. Each individual can converse with the two people to their left and right. Communication flow is sluggish in this network.
  • Freeflow: Each participant in this network has complete freedom to speak with others. In this network, communication moves quickly.
  • Inverted V: A subordinate in this network is authorised to communicate with his immediate superior and his superiors  superior.

Informal Communication

Informal communication refers to communication between personnel who are not officially tied to one another. Because this sort of communication can flow in any direction, it is also known as ‘grapevine’ communication. Informal communication entails the flow of information in all ways, regardless of the sender’s status or authority.

Employees need to communicate ideas that they can’t accomplish through formal channels. Thus they use informal communication. Informal communication disseminates information quickly and might lead to rumours.

Grapevine network:

Grapevine communication, also known as informal communication, arises from social contact between employees and spreads without following the official communication method. The following are the several types of grapevine communication networks:

  • Single strand network: In this network, information is passed down in a certain order from one person to the next. 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 many others in a gossip network. 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. That is, 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.

Barriers to Communication

The information does not always reach the intended destination in the manner the sender intended. That is, information might be misread or misunderstood when it is transmitted from source to receiver. This obstructs proper communication flow.

The following are the  communication barriers and they can be grouped as:

  • Semantic barriers: The use or comprehension of language is linked to semantic communication hurdles. At times, some words, sentences, or phrases may be unclear or difficult to comprehend. As a result, they’re more likely to be misunderstood. Semantic obstacles are hurdles to communication that originate from ambiguity or difficulty interpreting words and phrases.

When providing directions, for example, a senior or specialist may employ specialised jargon that subordinates may find difficult to comprehend. Similarly, when two or more words (for example, access and excess) have the same sound, it leads to misunderstanding regarding the word’s precise meaning.

  • Psychological barriers: Frustration, rage, and fear are all psychological elements that can block good communication.

For example, a person’s mind may be busy owing to dissatisfaction with a certain issue, and he may be unable to pay attention to the information offered to him. Similarly, an individual may make judgments about a discussion before completely processing the facts owing to prior beliefs.

  • Personal barriers: Personal characteristics of the sender or recipient can occasionally operate as a communication barrier.

In formal organisations, for example, leaders routinely withhold facts that might undermine their power. Similarly, if they don’t trust their subordinates, they may refuse to listen to what they have to say. Similarly, subordinates may be unable to speak freely with superiors due to a lack of motivation. As a consequence of personal characteristics affecting both the sender and the receiver, effective communication is inhibited in such instances.

  • Organisational barrier: Informal organisational structures, communication barriers occur due to elements such as authority, rules, laws, relationships, and so on.

The speed of information may be slowed if an organisation utilises extensive vertical communication chains. On the other side, a highly centralised organisational structure obstructs open communication.

Improving Communication Effectiveness

Some of the steps that may be performed to overcome various communication hurdles include:

  • Clarifying the ideas before communicating: Communication should be tailored to the receiver’s level of knowledge and skills. That is, it should be ensured that the recipient understands the information.
  • Be mindful of message language, content and tone: The information’s language, tone, and topic should be suitable. It should be easy to comprehend and not hurt anyone’s sensitivities.
  • Obtain proper feedback: The receiver must provide accurate feedback for communication to be effective. To put it another way, he has to be encouraged to participate in the discourse.
  • Communicate for present and the future: It must be assured that the material is accurate in every aspect and that no questions remain unanswered.
  • Communicate as per the need of the receiver: Both the sender and the listener must grasp the fundamental concept of the message. That is, the communication’s aim must be clearly defined.
  • Be a good listener: The sender of information must also be a patient listener. He should also be receptive to feedback from the opposing side.

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NCERT Solutions Class 12 Business Studies Chapter 7: Questions & Answer 

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By referring to Extramarks NCERT Solutions Class 12 Business Studies Chapter 7, students can easily understand the Nature and Significance of Management.

Key Features of NCERT Solutions Class 12 Business Studies Chapter 7

Students must study all previous concepts to do well in the exam. As a result, NCERT Solutions Class 12 Business Studies Chapter 7 provides a detailed answer to all questions.  Extramarks is the best option for a couple of reasons: 

  • These notes will prove beneficial for students during their ongoing and final revision before exams.
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Q.1 What is informal communication?

Ans. Informal communication is often verbal or gestural and hence lacks the maintenance of proves. This type of communication is the result of social interaction and satisfies social needs. Such informal paths are referred to as ‘grapevine’.

Q.2 Which style of leadership does not believe in use of power unless it is absolutely essential?

Ans. Laissez faire or Free-rein leader does not believe in use of power unless it is absolutely essential.

The followers are given a high degree of independence to formulate their own objectives and ways to achieve them.

Q.3 Which element in the communication process involves converting the message into words, symbols, gestures etc.?

Ans. Encoding is the process of converting the message into communication symbols such as words, pictures, gestures etc.

Q.4 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. State the element of directing that can help the supervisor in handling the problem.

Ans. Supervisor is required to provide motivation to all the employees. This will encourage them to perform better and attain the objectives. Motivation may be defined as the process of stimulating people to work enthusiastically for the attainment of organisational goals. It involves arousing needs and desires in people to initiate and direct their behaviour in a particular manner

Q.5 What are semantic barriers of communication?

Ans. Communication problems arising due to use of faulty translation form part of semantic barriers. Semantic barriers are concerned with problems and obstructions in the process of encoding and decoding of message into words or impressions. Normally, such barriers result on account of use of wrong words, faulty translation, different interpretations, etc.

Q.6 Explain the process of motivation with the help of a diagram.

Ans. Motivation process is based on human needs.

Process of Motivation
Unsatisfied Need
Search Behaviour
Satisfied Need
Reduction of Tension










Q.7 State the different networks of grapevine communications.

Ans. Generally Informal communication is termed as grapevine.
Informal communication grows in all directions as it is the communication between individuals and groups, which are not officially recognised. This type of communication is the result of social interaction and satisfies social needs. Such informal paths are referred to as ‘grapevine’. Different networks of grapevine communications are:

  • Single Strand: In single strand network, each person communicates to the other in sequence.
  • Gossip: In gossip network, each person communicates with all on nonselective basis.
  • Cluster: In cluster, the individual communicates with only those people whom he trusts of these four types of networks.
  • Probability: In probability network, the individual communicates randomly with other individual.

Q.8 Explain any three principles of Directing.

Ans. Maximum individual contribution: It emphasises that directing techniques must help every individual in the organization to contribute to his maximum potential.

Harmony of objectives: Individual objectives of employees and the organizational objectives as understood are conflicting to each other. Direction helps in bringing harmony.

Unity of Command: This principle suggests that a person in the organisation should receive instructions from one superior only.

Q.9 In an organisation, one of the departmental manager is inflexible and once he takes a decision, he does not like to be contradicted. As a result, employees always feel they are under stress and they take least initiative and fear to express their opinions and problems before the manager.

What is the problem in the way authority is being used by the manager?

Ans. The manager does not believe in keeping the morale high by being participative.

The manager believes autocratic leadership. An autocratic leader gives orders and expects his subordinates to their duties and accomplish organisational objectives. They exercise more control by using forces within the group.

Q.10 A reputed hostel, GyanPradan provides medical aid and free education to children of its employees. Which incentive is being highlighted here? State its category and name any two more incentives of the same category.

Ans. Gyan Pradhan is offering a financial incentives of perquisites fringe benefits such as allowance, housing , medical aid and education to the children etc. over and above the salary.

These measures help to provide motivation to the employees.

Other Financial incentives like:

Pay and Allowances: for every employee, salary is the basic monetary incentives. It includes basic pay, dearness allowance and other allowances. Salary system consists of regular increments in the pay every year and enhancement of allowances from time to time.

Bonus: Bonus is an incentive offered over and above the wages, salary to the employees.

Q.11 Explain the qualities of a good leader? Do the qualities alone ensure leadership success?

Ans. Leadership may be defined as the art of influencing the people so that they will strive willingly towards the realisation of common goals. In other words, leadership refers to the equality of the behaviour of the individuals whereby they guide people and their activities in organised efforts.

The qualities of a good leader are:

  • A good leader should have knowledge and competence so that he can easily instruct his subordinates.
  • A leader should possess high level of integrity and honesty to be a role model to others regarding the ethics and value.
  • A leader should be an effective motivator. He should understand the needs of people and motivate them through satisfying their needs.

Q.12 Discuss Maslow’s Need Hierarchy theory of motivation.

Ans. Motivation may be defined as the process of stimulating people to work enthusiastically for the attainment of organisational goals. It involves arousing needs and desires in people to initiate and direct their behaviour in a particular manner. Motivation is a psychological phenomenon which arouses the feeling of needs and wants of individuals. It causes a behavioural pattern which is goal oriented.

Abraham Maslow, a psychologist, propounded the ‘Malow’s Need Hierarchy Theory’, which was based on human needs.

As per Maslow, there is a hierarchy of five needs which governs human motivation:

Physiological needs: These needs are basic for human survival and include need for food, water, air, shelter, sleep, thirst, etc.

Security or Safety needs: These are the needs for physical safety as well as psychological security and include safety of person and property, security of job and need for a predictable, secure and safe environment.

Social/ Belonging needs: These are needs for belongingness, friendship, love, affection, attention and social acceptance.

Esteem or ego needs: These needs are needs for self esteem and need for other esteem. Self-esteem needs include needs for self-respect, self- confidence, competence, autonomy and knowledge.

Self-actualisation needs: This is the need ‘to be what one is capable of becoming’ and includes need for optimal development of potential abilities, knowledge and skills, need to be creative and achieve self-fulfillment.

Q.13 What are the common barriers to effective communication? Suggest measures to overcome them.

Ans. There are four major barriers to Effective communication:

Semantic Barriers: These are basically language related Barriers.

Psychological or Emotional Barriers: These are the outcome of the mental condition of the parties involved in the process of communication.

Organisational Barriers: Organisational structure greatly affects the capability of the employees with reference to communication process.

Personal Barriers: These are directly connected with the sender and the receiver.

These are further subdivided as:

Barriers to Effective Communication:

  • Semantic Barriers
  • Badly Expressed Message
  • Symbols or words with different meanings
  • Faulty Translation
  • Unclarified Assumption
  • Technical Jargon
  • Body Language and gesture decoding

Psychological and emotional barriers:

  • Premature Evaluation
  • Lack of Attention
  • Loss by transmission and poor retention
  • Distrust

Organisational Barriers:

  • Organisational Policies
  • Rules and Regulations
  • Status
  • Complexity in organisational Structure
  • Organisational Facilities

Personal Barriers:

Barriers Related to superiors like:

  • Fear of Challenge of authority,
  • Lack of confidence in subordinates

Barriers Related to subordinates:

  • Non willingness to communicate,
  • Lack of proper Incentive.

Q.14 Explain different financial and non-financial incentives used to motivate employees of a company?

Ans. Financial Incentives:

Pay and allowances: It includes basic pay, dearness allowance and other allowances.

Productivity linked wage incentives: Wage incentive plans aims at linking payment of wages to increase in productivity at individual or group level.

Bonus: Bonus is an incentive offered over and above the wages/ salary to the employees.

Profit sharing: provide a share to employees in the profits of the organisation.

Stock options: The employees are given stock at lower rate than market price.

Non Financial Incentives:

Job enrichment: is concerned with designing jobs that include greater variety of work content, require higher level of knowledge and skill; give workers more autonomy and responsibility.

Career advancement: Appropriate skill development programmes, and sound promotion policy will help employees to achieve promotions. Promotion works as a tonic.

Job security: Employees want certain stability about future income and work so that they do not feel worried on these aspects and work with greater zeal.

Q.15 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?

Ans. Manager should move towards formal communication. It is based upon indirect written documents and is the result of authorities granted and duty assigned by the organization. Messages are clear and authentic and in writing, there is no cause for rumour or misunderstanding.

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FAQs (Frequently Asked Questions)

1. Define Informal communication in a simple language.

 Informal or grapevine communication refers to communication which takes place unofficially between two or more people.. Informal communication entails the flow of information in all ways, regardless of the sender’s status or authority. They are usually in the form of rumours, whispers etc. They are  spontaneous, unrecorded, spread very fast and usually distorted.

2. Describe Communication briefly.

 It is defined as a process of exchanging ideas, and viewpoints between or among individuals and creating understanding. It’s an act of giving, receiving, and sharing information.