NCERT Solutions for Class 12 Commerce Business studies Chapter 7 Directing are provided here with simple step-by-step explanations. These solutions for Directing are extremely popular among Class 12 Commerce students for Business studies Directing Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the NCERT Book of Class 12 Commerce Business studies Chapter 7 are provided here for you for free. You will also love the ad-free experience on Meritnation’s NCERT Solutions. All NCERT Solutions for class Class 12 Commerce Business studies are prepared by experts and are 100% accurate.

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Question 1:

What is informal communication?


Informal communication refers to the communication that flows without following the formal defined path. An informal communication system is also known as grapevine. Under informal communication, a piece of information flows in all directions without paying any heed to the level or authority. It arises out of social interactions among the employees and then spreads throughout the organisation. It can take the form of a rumour or a gossip. For example, a talk over lunch regarding the attitude of a senior is an informal communication. It is difficult to determine the source of such information. Moreover, the actual talk may even get distorted and the final piece of information may come out to be much different from the original one.

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Question 2:

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


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. 

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Question 3:

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


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.

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Question 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.


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.

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Question 1:

What are semantic barriers of communication?


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.

i. Sometimes due to poor vocabulary or wrong use of words, the information may not be clearly expressed. 

ii. 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. 

iii. 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.

iv. At times while giving out instructions the senior or specialist uses technical vocabulary that might be difficult to understand for the subordinates.

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Question 2:

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


Motivation implies inducing and stimulating an individual to act in certain manner. The following diagram explains the process of motivation.


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Question 3:

State the different networks of grapevine communication?


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.

i. 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.

ii. Gossip Network: In gossip network, one person shares the information with many other people.

iii. 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. 

iv. 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.

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Question 4:

Explain any three principles of Directing?


Directing as a function of management is quite complex. To help in the directing process, certain principles have been developed. The following are the principles of directing.

1. Maximum Individual Contribution: According to this principle, a manager should use such directing techniques that induce the workers to perform to the best of their capabilities. It should encourage the workers to work towards the goals of the organisation. That is, each individual should contribute the maximum towards the organisational goals. For example, suitable incentive and motivation techniques can be used by the managers to urge the employees to perform better. 

2. Harmony of Objectives: Often the objectives of an individual diverge from the overall organisational objectives. For example, an individual’s focus may be on earning greater income while the organisation aims at increasing the production. In such a case, directing should work towards converging the individual goals with the goals of the organisation. 

3. Unity of Command: As per this principle, an individual should receive commands and instructions from only one superior. If a worker receives orders from more than one superior, it creates confusion and clashes that leads to delay in the work. For example, the worker might get confused whose order to follow. Moreover, it might also happen that a conflict is created between the two superiors. 

4. Appropriateness of Direction Technique: According to this principle, the direction technique to be used should be appropriately selected. It should suit the need and attitude of the employees. For example, one employee might get motivated by a praise while other requires monetary incentive. Thus, the manager should use suitable directing techniques on requirement basis. 

5. Managerial Communication: Effective communication plays a key role in directing. The instructions and commands given by the superior must be clear and easily understandable by the subordinates. In addition, the subordinates must also be able to communicate with the superiors in an unhesitant manner. They must be able to express freely their feedbacks and suggestions. Thus, an effective two way communication must take place between the superior and the subordinates.

6. Use of Informal Organisation: The manger should realise the existence and importance of informal organisation. He must strategically use them. For example, informal communication can be used to divulge true and real feedback on policy matters.

7. Leadership: Leadership is an important element of directing. A manager must be able to bring out the capabilities of the employees. He must be able to influence the behaviour of the employees such as to boost the willingness of the employees to work towards the organisational goals. In addition, he must also be able to work effectively towards the satisfaction of the individual goals of the employees.

8. Follow Through: According to this principle, a manager’s role is not just limited to giving instructions to the subordinates rather, he should continuously review the implementation of the instructions. Through a proper follow up he must ensure that the commands are properly followed and implemented. If required suitable corrective actions must also be taken.

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Question 5:

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?


In the given situation what is wrong is that there is absence of free flow of communication. The manager must involve his subordinates in the decision making process and encourage them to actively give their feedback and suggestions.

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Question 6:

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.


GyanPradhan has given perquisites and fringe benefits to the employees in the form of free education to children and medical aid.
Perquisites and fringe benefits are a type of Financial incentive. Some other financial incentives are:

  1. Bonus: Additional reward over and above the salary such as gifts, festival bonus, etc. 
  2. Retirement Benefits: Offering retirement benefits to employees such as pensions, gratuity, provident fund, etc. 
  3. Stock Option: Offering the employees shares of the company at a price lower than the market price 
  4. Profit-Sharing: Sharing a portion of the profit with the employees  (any two)

Page No 206:

Question 1:

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


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.

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Question 2:

Discuss Maslow’s Need Hierarchy theory of motivation.


Maslow’s Need Hierarchy theory provides an understanding of the complex phenomenon of motivation. According to Maslow, within each individual there exists a set of five needs that can be arranged in a hierarchy. Knowledge of these needs helps the manager in understanding the behaviour of employees. With identification of the needs of the employees, appropriate motivation can be provided to them.


Maslow’s theory is based on the following assumptions.  

(i) People’s need influences their behaviour. 

(ii) Needs of the individuals can be arranged in a hierarchical order.

(iii) An individual can move to a higher level need only when the lower level need in the hierarchy is satisfied. 

(iv) Once a need is satisfied, an individual can be motivated only through the next higher level need. 


The following is the hierarchy of needs as given by Maslow.

1. Physiological Needs: Such needs comprise of essential requirements for sustenance of life. They are at the top of the hierarchy. The fulfilment of these needs is necessary for survival. For example, food, clothing, shelter are physiological needs. An employee requires a certain basic salary for the satisfaction of these needs.

2. Security Needs: These needs relate to physical and economic security and well being. For example, an employee desires job security, income stability, etc.

3. Belongingness Needs: Such needs comprise of the social needs of an individual such as affection, acceptance, companionship, etc. as every individual yearns for social acceptance and belongingness.

4. Esteem Needs: These needs include such elements as respect, dignity, recognition, etc. as every individual wants to command respect and acknowledgement in the peer group.

5. Self-Actualisation Needs: This need refers to achieving what one aims or aspires. It is the highest level need in hierarchy. For an employee such needs relate to growth, work satisfaction, etc.

Maslow’s theory is widely appreciated and is used as basis for motivation by the managers. However, sometimes it can happen that needs of an individual do not follow the exact order of hierarchy. Nevertheless an understanding of the needs as given by Maslow helps the managers in practicing efficient motivation.

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Question 3:

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


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.

(i) 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.

(ii) The language, tone and content of the information should be appropriately chosen. It should be easily understandable and should not harm anybody’s sentiments.

(iii) 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.

(iv) It must be ensured that the information is complete in all respect and nothing is left ambiguous.

(v) 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.

(vi) The sender of the information should also be a patient listener. He should be open to communication from the other end as well.

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Question 4:

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


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. 

i. 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 

ii. Performance Based Incentives: Often organisation offer monetary rewards for good performance. This induces the workers to improve their efficiency and performance.

iii. 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.

iv. 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.

v. 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.

vi. 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.

vii. 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.

i. 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. 

ii. 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. 

iii. 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.

iv. 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. 

v. 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.

vi. 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. 

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Question 5:

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.


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. 

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