Business Studies Part I
Business Studies Part II

Direction: Elements

The process of directing involves guiding, coaching, instructing, motivating, leading the people in an organization to achieve organizational objectives. Consider the following examples:

  • A supervisor explains a worker about operations to be carried by him on a lathe machine.
  • A mining engineer explains about safety precautions to be followed while working in a coal mine.
  • A Managing Director declares share in the profits to the managers for their contribution to enhancing the profits of the company.
  • A manager inspires his/her employees by playing a lead role in performing work.

All these examples and many other activities related to directing may broadly be grouped into four categories which are the elements of directing. These are:


The term supervision can be understood in two ways. Firstly, it can be understood as an element of directing and secondly, as a function performed by supervisors in the organizational hierarchy.

Supervision being an element of directing, every manager in the organization supervises his/her subordinates. In this sense, supervision can be understood as the process of guiding the efforts of employees and other resources to accomplish the desired objectives. It means overseeing what is being done by subordinates and giving instructions to ensure optimum utilization of resources and achievement of work targets.

Secondly, supervision can be understood as the function to be performed by a supervisor, a managerial position in the organization hierarchy at the operative level i.e., immediately above the worker. The functions and performance of the supervisor are vital to any organization because he is directly related to workers whereas other mangers have no direct touch with bottom level workers.

Importance of Supervision:

The importance of supervision can be understood from multiple roles performed by a supervisor. These are explained below:

  1. The supervisor maintains day-to-day contact and maintains friendly relations with workers. A good supervisor acts as a guide, friend and philosopher to the workers. The supervisor acts as a link between workers and management. He conveys management ideas to the workers on one hand and workers problems to the management on the other. This role played by the supervisor helps to avoid misunderstandings and conflicts between management and workers/employees.
  2. The Supervisor plays a key role in maintaining group unity among workers placed under his control. He sorts out internal differences 


Motivation: Definition
Motivation is the process of stimulating people to action to accomplish the desired goals.

Importance of Motivation:

  • Motivation helps to improve the performance of both the employees as well as the organization.
  • Motivation helps to mold negative or indifferent attitudes of employees into positive attitudes for the benefit of the organization.
  • Motivation helps to reduce employee turnover and leads to a reduction in the cost to be incurred on new recruitment and training.
  • Motivation helps managers to introduce changes within the organization smoothly without much resistance from their subordinates.
  • Motivation helps to reduce absenteeism in the organization as work becomes a source of pleasure and workers attend to the work regularly.

Features of Motivation:

  • Motivation is an internal feeling as it relates to the urge, drives, desires, or needs of human beings.
  • Motivation produces goal-directed behavior.
  • Motivation can be either positive or negative.
  • Motivation is a complex process as the individuals may differ in their perceptions and reactions.

Braham Maslow’s Need Hierarchy Theory of Motivation:

  • Basic Physiological Needs refer to the needs that are most basic in the hierarchy like hunger, thirst, shelter, etc. which can be fulfilled by basic salary.
  • Safety/Security Needs refer to the need to get security and protection from physical and emotional harm which can be fulfilled through job security, the stability of income, pension plans, etc.
  • Affiliation/Belonging Needs refer to the needs that relate to affection, sense of belongingness, acceptance, and friendship which can be fulfilled through teamwork, kindness, etc.
  • Esteem Needs include factors such as self-respect, autonomy status, recognition and attention which can be fulfilled by giving praise and recognition, offering promotions, etc.
  • Self-actualization Needs refer to the drive to become what one is capable of becoming which can be fulfilled by providing challenging work and giving them flexibility and autonomy in their jobs.


Incentive: Definition
Incentive means all measures which are used to motivate people to improve performance.

Types of Financial Incentives:

  • Pay and allowances
  • Productivity linked wage incentives
  • Bonus
  • Profit-Sharing
  • Co-partnership/ Stock option
  • Retirement Benefits
  • Perquisites

Types of Incentives:

  • Financial incentives refer to incentives that are in direct monetary form.
  • Non-financial incentives mainly focus on psychological, social and emotional needs.

Types of Non-financial Incentives:

  • Status
  • Organizational Climate
  • Career Advancement Opportunity
  • Job Enrichment
  • Employee Recognition programs
  • Job security
  • Employee participation
  • Employee Empowerment


Leadership: Definition
Leadership is the process of influencing the behavior of people by making them strive voluntarily towards the achievement of organizational goals.

Importance of Leadership:

  • It helps to bring about a positive change in the behavior of the employees for the benefit of the organization.
  • It helps to maintain good personal relations and also helps the followers in fulfilling their needs.
  • It helps to introduce the required changes in the organization smoothly.
  • It helps to resolve the conflicts within the organization effectively without leading to any disruptions in the working of the organization.
  • It facilitates the training of subordinates by the leader.

Features of Leadership:

  • Leadership shows the ability of an individual to influence others.
  • Leadership seeks to bring about the desired change in the behavior of others.
  • Leadership reflects the interpersonal relations between leaders and followers.
  • Leadership is an effective tool to achieve the common goals of the organization.
  • Leadership is a continuous process.

Styles of Leadership:

  • Autocratic leadership
  • Democratic leadership
  • Laissez-faire


Communication: Definition
Communication is defined as a process of exchange of ideas, views, facts, feelings, etc., between or among people to create a common understanding.

Importance of Communication:

  • Acts as a basis of coordination among departments, activities, and persons in the organization
  • It helps in the smooth working of an enterprise as all organizational interactions depend on communications.
  • Acts as a basis of decision making as it provides the information needed for decision making.
  • Increases managerial efficiency as it lubricates the entire organization and keeps the organization at work with efficiency.
  • Promotes cooperation and industrial peace as the two-way communication promotes cooperation and mutual understanding between the management and workers.
  • Effective communication helps to establish effective leadership.
  • Boosts morale and provides motivation to the employees and managers to achieve higher goals.

Elements Involved in the Communication Process:

  • Sender refers to a person who conveys his thoughts or ideas to the receiver.
  • The message is the content of ideas, feelings, suggestions, order, etc., intended to be communicated.
  • Encoding refers to the process of converting the message into communication symbols such as words, pictures, gestures, etc.,
  • Media is the path through which encoded message is transmitted to the receiver through a face to face interaction, phone call, internet
  • Decoding is the process of converting encoded symbols of the sender.
  • Receiver refers to the person who receives the communication of the sender.
  • Feedback includes all those actions of the receiver indicating that he has received and understood the message of the sender.
  • Noise means some obstruction to communication

Types of Formal Communication Networks:

  1. Formal communication is of two types:


    1. Upwards (from subordinate to his superior)
    2. Downward (from a superior to his subordinate)


    1. Takes place between one division and another
  1. Informal Communication
    • Informal communication is generally referred to as the ‘Grapevine’ because it spreads throughout the organization with its branches going out in all directions in complete disregard to the levels of authority.


Semantic Barriers:

  • Badly expressed massage
  • Symbols with different meanings
  • Faulty translations
  • Unclarified assumptions
  • Technical jargon
  • Body language and gesture decoding

Organizational Barriers:

  • Organizational policy
  • Rules and regulations
  • Status
  • Complexity in organization structure
  • Organizational facilities

Psychological Barriers:

  • Premature evaluation
  • Lack of attention
  • Loss by transmission and poor retention
  • Distrust

Personal Barriers:

  • Fear of challenge to authority
  • Lack of confidence of superior on his subordinates
  • Unwillingness to communicate
  • Lack of proper incentives

Ways of Improving Communication Effectiveness:

    • Clarifying the ideas before communication
    • Communicate according to the needs of the receiver
    • Consult others before communicating
    • Be aware of languages, tone, and content of a message
    • Convey things of help and value to listeners
    • Ensure proper feedback
    • Follow up communications

  1. The various elements of directing mentioned in the above paragraph are as follows:
    • Communication: “He is very clear and specific in issuing instructions to his subordinates in order to ensure smooth working of the department.”
    • Supervision: “He personally oversees the method followed by the chefs for preparation of each dish.”
    • Leadership:“He provides constant guidance to them in order to improve upon its taste and presentation and also encourages them to innovate and be more creative in their work.”
    • Motivation: “He misses no opportunity to praise his subordinates for their good work.”
  2. The importance of directing as a function of management is described below:
    • Initiates action: Directing helps to initiate action by people in the organization towards attainment of desired objectives. It is the first execution function of management.
    • Integrates employees’ efforts: Directing seeks to integrate the individual efforts of employees in the organization towards the realization of the organizational goals.
    • Helps to realize their potential: Directing provides effective guidance, motivation and leadership to the employees so as to enable them to realize their potential and capabilities.