NCERT Solutions for Class 12 Business Studies Chapter 7: Directing

Hello Students. Are you Searching for Class 12 Business Studies NCERT Solutions of Chapter 7? If yes then you are in the right place. Here we have provided you with the Question and Answers of Chapter 7: Directing. These solutions are written by expert teachers and are so accurate to rely on. These solutions can eliminate any lingering doubts you may have regarding the concepts.

Chapter7. Directing
SubjectBusiness Studies
CategoryNCERT Solutions for Class 12

NCERT Solutions for Class 12 Business Studies can be a great tool for the students who have taken Business Studies stream for higher studies. These NCERT Class 12 Business Studies solutions are written by expert teachers and faculties to make your practice and revision easier. On this page, we have provided you with the complete solutions of Chapter 7: Directing.

NCERT Solutions for Class 12 Business Studies Chapter 7

Directing Solutions

Q1) What is informal communication?

Answer) Informal communication is the type of communication that does not follow the formal path of communication. It is also known as grapevine. Under this mode of communication, information is flowing in all directions irrespective of the level or authority. The social interactions among the employees in the form of a rumour or gossip spreads throughout the whole organisation. The characteristic of informal communication is that the actual information might get distorted and the information presented may be different than the original.

Q2) Which style of leadership does not believe in use of power unless it is absolutely essential?

Answer) Laissez Faire or free reign leadership style does not believe in the use of power unless it is absolutely essential. In such leadership complete decentralisation of the authority is given to the subordinates. Subordinates are provided maximum freedom and are encouraged to take decisions independently.

Q3) Which element in the communication process involves converting the message into words, symbols, gestures etc.?

Answer) The element in the communication process involves converting the message into words, symbols, gestures etc. is called Encoding. It is the process of converting the message to be sent into symbols that are generally used in communication. This involves developing words, gestures, pictures, etc., that form the message.


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.

Answer) In the given situation what is required is providing motivation to the employees. The supervisor must motivate the employees and encourage them to perform to the best of their capabilities. He must identify the needs and requirements of the workers. In other words, the cause for the unwillingness to work must be identified and worked upon. For motivation various financial incentives such as bonus and profit sharing or non-financial incentives such as work enrichment and position can be used.

Short Questions

Q1) What are semantic barriers of communication?

Answer) Semantic barriers of communication relate to the use or understanding of language. Sometimes certain words, sentences or phrases are misinterpreted or misunderstood. In such cases, effective communication is obstructed. Such barriers in communication that arise out of ambiguity or difficulty in understanding of words and sentences are known as semantic barriers. The following are some of the causes of semantic barriers.

  • Sometimes due to poor vocabulary or wrong use of words, the information may not be clearly expressed.
  • At times a word may have more than one meaning or two or more words may have same pronunciation (such as idle and idol). In such cases, the correct interpretation of the word remains ambiguous.
  • In certain cases the proficiency of a language differs among the workers and the mangers. In such cases, a translation of the information is required in the language which is understandable to the workers. However, in the process of translation some of the words or sentences may get misinterpreted. For example, in a translation of an instruction from English to Hindi, the meaning of certain words might change.
  • At times while giving out instructions the senior or specialist uses technical vocabulary that might be difficult to understand for the subordinates.

Q2) Explain the process of motivation with the help of a diagram.


Explain the process of motivation with the help of a diagram

Q3) State the different networks of grapevine communication?

Answer) Grapevine communication or informal communication refers to the communication that arises out of social interaction among employees and spreads without following the formal communication path. The following are the types of grapevine communication network.

  • Single Strand Network: In this network, the information spreads from one person to other in a sequence. That is, one person communicates to another person who turn communicates to some other person.
  • Gossip Network: In gossip network, one person shares the information with many other people.
  • Probability Network: Under a probability network, an individual shares the information randomly with other people. That is, the person is indifferent about who he shares the information with.
  • Cluster Network: In this network, information is first shared between two people who trust each other. One of them then passes the information to some other person who in turn shares it with another and so the information spreads.

Q4) Explain any three principles of Directing?

Answer) Directing process is a critical function of management. These are certain principles that help in the directing process:

  1. As per the principle of maximum individual contribution, the managers should use techniques of directing in such a way that makes the worker to perform their best. These techniques should motivate an employee to work for achieving the goals of the organisation. It can be in form of incentives or motivational sessions that help employee in contributing more for the organisation.
  2. As per the principle of unity of command, the employees should be receiving instructions from only one superior. If multiple superiors are directing the worker, it creates confusion and causes delay in the work.
  3. The principle of managerial communication states that managers should communicate clearly and, in a way, that workers can understand and in a similar way, workers should also be communicating with superiors without any hesitation. A two-way communication must take place between the managers and workers.


In an organisation, one of the departmental managers 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?

Answer) In this situation it can be seen that there is obstruction in the free flow of communication. In an ideal situation the manager should involve his subordinates in the decision-making process and also encourage the workers to provide suggestion and feedback. This will be beneficial for the organisation.


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.

Answer) The incentive that GyanPradan is providing its employees in the form of medical aid and free education to children is called as Financial Incentive. Two other types of financial incentives are:

  • Bonus: This could be in the form of benefits that are apart from salary and it can be provided in the form of festival bonus or yearly bonus.
  • Retirement benefits: Employee benefits in the form of pensions, provident funds and gratuity etc can be offered to employees.
Long Questions

Q1) Explain the qualities of a good leader? Do the qualities alone ensure leadership success?

Answer) It is said that to be a successful leader an individual must possess certain qualities. Some of the qualities of a good leader are as follows.

  1. Physical Attributes: People with good physical features such as height, appearance, health etc. are attractive. A healthy and active person can himself work hard and efficiently and thereby, has the capability of being looked up to. Thus, he can induce his subordinates as well to work and perform better.
  2. Honesty: A good leader should maintain high degree of honesty. He should be sincere and should follow ethics and values. He should be an idol for others in terms of honesty, integrity and values.
  3. Intelligence: A leader must have a good presence of mind and knowledge. He should be competent enough to effectively examine and solve the problems encountered in the course of work. He must have the required intelligence to take proper decisions based on logic and facts.
  4. Inspiration: A leader should be a source of inspiration and motivation to others. That is, he must be exemplary in terms of work, performance and values. He must be able to develop willingness among the subordinates to work to the best of their capabilities.
  5. Confidence: A leader should be high in confidence. He must also be able to maintain his confidence in difficult situations as well. Only when a leader is confident himself, he can boost the confidence of his subordinates.
  6. Responsibility: A leader should command responsibility for the work and tasks of his group. He should hold the responsibility of being answerable for the mistakes of his subordinates. However, as a mark of encouragement he must share the credit of the success with his subordinates.
  7. Effective Communication Skill: A leader should be able to clearly express his ideas and instructions clearly to the subordinates. On the other hand, a leader also forms the link between the higher authorities and the subordinates. He should be able to effectively pass the problems and suggestions of the subordinates to the seniors. Besides, he should also be a patient listener and counsellor.
  8. Ability to take Decisions: A leader should be able to take appropriate decisions based on logic, facts and figures. Moreover, he should be confident enough to hold on to his decisions and not get confused.
  9. Social Behaviour: He should maintain a friendly and supportive behaviour with his subordinates. He must be able to understand people and maintain good social relations with them.
  10. Dynamic: A leader must be dynamic and outgoing. He must be able to take up new initiatives and break the old paradigms for the benefit of the organisation.

Though the above mentioned qualities are necessary for being a good leader, however, the mere presence of these qualities does not ensure leadership success. In fact, no single individual can possess all the qualities. However, a conscious effort must be made by the managers to acquire them.

Q2) Discuss Maslow’s Need Hierarchy theory of motivation.

Answer) Maslow’s need hierarchy theory helps understand the concept of motivation. As per Maslow, huamn needs can be categorised in a five-tiered pyramid structure in form of a hierarchy. A manager having an understanding of this theory will be in a better position to understand the employee behaviour.

Maslow’s need hierarchy is based on the following points

  1. Needs of people influence their behaviour.
  2. Individual needs can be arranged in form of a hierarchy.
  3. The shift to higher level can only be achieved when an individual is satisfied at the lower level.
  4. On satisfaction of a need an individual is motivated to reach the higher level of need.

The theory can be described as follows:

  1. Physiological needs: These are needs which are considered essential for sustaining human life. It is at the top of the needs. Fulfilling these needs is essential for every individual. Example of such needs are food, shelter etc.
  2. Safety needs: It is the next level of needs. Once a person has fulfilled physiological needs, he then feels the necessity of safety and security. It is related to both economic and physical safety. Examples are job security, employment, law and order.
  3. Belongingness needs: These needs arise once the first two levels of need are satisfied. It is related to the feelings of belongingness that an individual seeks. The examples are friendship, love, family etc.
  4. Esteem needs: It is the need of being respected by everyone and being respectful in one’s own judgement. In this category of need, the person seeks reputation and respect from others. Examples are dignity, prestige etc.
  5. Self-actualisation needs: This need is all about the aims and aspirations that a person wants to achieve. It is regarded as the highest level in need hierarchy. The examples of such a need can be work satisfaction, growth etc.

The theory as suggested by Maslow helps a manager in providing a source of motivation to employees. Having a good understanding of the needs will help managers understand the employee behaviour in a better way.

Q3) What are the common barriers to effective communication? Suggest measures to overcome them.

Answer) Barriers in Communication

Sometimes the information that reaches the receiver is not in the manner that the sender had intended. That is, at times there arises misunderstanding or misinterpretation of the information as it is passed from the sender to the receiver. This creates barriers in the effective flow of communication. Barriers to communication can be classified as follows.

  1. Semantic Barriers: Semantic barriers of communication relate to the use or understanding of language. Sometimes it happens that certain words, sentences or phrases remain ambiguous or difficult to understand. Thereby, they are likely to get misinterpreted. Such barriers in communication that arise out of ambiguity or difficulty in understanding of words and sentences are known as semantic barriers. For example, sometimes while giving out instructions the senior or specialist uses technical vocabulary that might be difficult to understand for the subordinates. Similarly, at times two or more words have the same pronunciation (such as access and excess), that results in confusion regarding the correct interpretation of the word.
  2. Psychological Barriers: Sometimes psychological factor such as frustration, anger, fright may also obstruct effective communication. For example, out of frustration over a certain matter, an individual’s mind may be preoccupied and he may not be able to attentively grasp the information given to him. Similarly, due to preconceived notions regarding a conversation, an individual might derive conclusions even before the information is completed.
  3. Personal Barriers: Sometimes personal factors related to the sender or the receiver act as a hurdle in communication. For example, often in formal organisations, superiors do not share such information that they fear will harm their authority. Similarly, due to lack of trust on their subordinates, they may not be willing to pay attention to the information provided by them. In a similar manner, subordinates may lack the incentive to communicate freely with the superiors. Thus, in such cases effective communication is hindered due to personal factors pertaining to the sender and the receiver.
  4. Organisational Barriers: In formal organisational structures, barriers to communication arise due to such factors as authority, rules, regulations, relationships, etc. For example, if an organisation follows long vertical chains of communication, it might result in delay in the flow of information. Similarly, a highly centralised organisational structure obstructs free communication.

Measures to overcome Barriers in Communication

The following are some of the measures that can be adopted to overcome various barriers of communication:

  • The communication should take place as per the understanding level and capabilities of the receiver. That is, it must be ensured that the receiver is clearly able to understand the information.
  • The language, tone and content of the information should be appropriately chosen. It should be easily understandable and should not harm anybody’s sentiments.
  • For the communication to be effective proper feedbacks must be taken from the receiver. That is, he must be encouraged to respond during the conversation.
  • It must be ensured that the information is complete in all respect and nothing is left ambiguous.
  • The core idea of the communication must be clear between the sender and the receiver. That is, it must be conveyed properly what the communication is about.
  • The sender of the information should also be a patient listener. He should be open to communication from the other end as well.

Q4) Explain different financial and non-financial incentives used to motivate employees of a company?

Answer) Financial Incentives

Financial incentives refer to direct monetary incentives offered to the employees to motivate or reward people for better performance. The following are some of the financial incentives used in the organisations.

  • Salary and Allowances: In every organisation salary and allowances given to the employees forms the basic form of financial incentive. Regular raise in salaries and grant of allowances acts as a motivation for the employees.
  • Performance Based Incentives: Often organisation offer monetary rewards for good performance. This induces the workers to improve their efficiency and performance.
  • Bonus: Bonus refers to the extra reward over and above the basic salary. It can take the form as cash, gifts, paid vacations, etc. For example, some organisations grant bonus during festival times such as Diwali bonus.
  • Stock Option: Under this incentive scheme, the employee is offered the shares of the company at a price lower than the market price. This instils a feeling of ownership and belongingness in the employee and urges him to contribute towards the goals of the organisation.
  • Sharing of Profit: Herein, the organisation shares a portion of the profit with its employees. This encourages the workers to contribute actively towards the growth of the organisation.
  • Retirements Benefits: Many organisations offer certain retirement benefits to its employees such as pensions, gratuity, provident fund, etc. This provides a sense of security and stability to the employees.
  • Fringe Benefits: Besides the basic salary an organisation may offer certain additional advantages also to its employees such as housing allowance, medical allowance, etc.

Non Financial Incentives

Non-financial incentives refer to those incentives that focus on non-monetary needs of the employees such as the social and psychological needs. The following are some of the non- financial incentives used in the organisations.

  • Position: Rise in status in terms of power, authority, responsibility provides a psychological boost to the employees. For example, a promotion may satisfy the esteem and self actualisation needs of an individual.
  • Organisational Characteristics: Certain characteristics such as employee freedom, recognition of performance, incentives and rewards play an important role in influencing the behaviour of the employees. For example, if the employees get due recognition for their performance, it encourages them to work more efficiently.
  • Work Enrichment: Often, a 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: If the organisation is endowed with appropriate growth and career opportunities for its employees, it strives then to perform better and thereby, climb the professional ladder.
  • Job Security: An employee should have a certain extent of security regarding his association with the organisation. Constant fear of losing the job hampers their efficiency. However, a complete security can also result in loss of interest in work.
  • Involvement: If an organisation allows the participation of the employees in the policy and decision making matters, then it instils a feeling of belongingness in them and motivates them to work towards the organisational goals.


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) In the given situation an informal system of communication is being followed. What is required is a move towards a formal system of communication. In a formal system of communication messages and facts would flow through officially designed channels. In such a system information would flow systematically and in proper order. The original source that initiated the communication can be located and proof of communication can be maintained.

That’s it. These were the solutions of NCERT Class 12 Business Studies Chapter 7 – Directing. Our team hopes that you have found these solutions helpful for you. If you have any doubt related to this chapter then feel free to comment your doubts below. Our team will try their best to help you with your doubts.

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