BUSINESS STUDIES MASTER

 

CHAPTER 7:DIRECTING-STUDY NOTES

DEFINITION & CHARACTERISTICS

Definition of Directing

Directing generally means giving instructions and guiding people in their work. It is a key managerial process that involves instructing, guiding, counseling, motivating, and leading people within an organization to achieve its objectives.

Main Characteristics of Directing

1. Directing Initiates Action: Directing is a crucial managerial function that managers perform alongside planning, organizing, staffing, and controlling. While other functions prepare the groundwork, directing initiates action within the organization.
2. Directing Occurs at Every Management Level: Every manager, from top executives to supervisors, performs the directing function. Directing happens wherever there is a superior-subordinate relationship.
3. Directing is a Continuous Process: Directing is an ongoing activity that persists throughout the organization's life. It continues regardless of changes in managerial positions. For instance, in organizations like Infosys, Tata, BHEL, and HLL, the directing process endures despite managerial changes, as organizational activities cannot proceed without direction.
4. Directing Flows from Top to Bottom: Directing starts at the top level and flows down through the organizational hierarchy. Each manager directs their immediate subordinate and receives instructions from their immediate boss.

IMPORTANCE OF DIRECTING

1. Initiates Action: It helps to initiate action by the people in the organisation towards attainment of desired objectives. The employees start working only when they get instructions and directions from their superiors. It is the directing function which starts actual work to convert plans into results.
2. Integrates Employee's Efforts: All the activities of the organisation are interrelated so it is necessary to coordinate all the activities. It integrates the activities of subordinates by supervision, guidance and counselling.
3. Means of motivation: It motivates the subordinates to work efficiently and to contribute their maximum efforts towards the achievement of organizational goals.
4. Facilities change: Employees often resist changes due to fear of adverse effects on their employment and promotion. Directing facilitates adjustment in the organisation to cope with changes in the environment.
5. Stability and balance in the organisation: Managers while performing directing function instruct, guide, supervise and inspire their subordinates in a manner that they are able to strike a balance between individual and organizational interests.

ELEMENTS OF DIRECTION

1. Supervision (out of syllabus)
2. Motivation
3. Leadership
4. Communication

MOTIVATION

Definition

Motivation refers to the process of stimulating employees to act in a desired manner to achieve organizational goals.

Key Terms

• Motive: An inner state that energizes and directs behavior towards goals, arising from needs such as hunger, security, or recognition.
• Motivation: The process of stimulating people to act to accomplish desired goals.
• Motivators: Techniques used to encourage people in an organization, including pay, bonuses, promotions, recognition, and responsibility.

Features of Motivation

• Internal Feeling: Motivation is driven by internal urges, desires, and needs, influencing human behavior. Examples include the desire for material possessions or social recognition.
• Goal-Directed Behavior: Motivation leads to behavior aimed at achieving specific goals, such as improving performance to earn a promotion.
• Positive and Negative Motivation:
  • Positive Motivation: Uses rewards like increased pay or promotions.
  • Negative Motivation: Uses penalties or threats to induce action.
• Complex Process: Motivation is complex due to the diverse expectations and reactions of individuals. A single motivational approach may not affect everyone similarly.

Importance of Motivation

• Improves Performance Levels: Proper motivation enhances employees' performance by satisfying their needs and encouraging them to contribute their best efforts.
• Changes Attitudes: Motivation can transform negative or indifferent attitudes into positive ones, improving work commitment and performance.
• Reduces Employee Turnover: Effective motivation helps in retaining employees by addressing their needs and reducing the costs associated with recruitment and training.
• Reduces Absenteeism: A sound motivational system addresses issues like poor working conditions and inadequate rewards, making work more enjoyable and reducing absenteeism.
• Facilitates Change: Motivation helps in managing resistance to organizational changes by highlighting the additional rewards and benefits that changes will bring.

MASLOW’S NEED HIERARCHY THEORY

Introduction

Maslow’s Need Hierarchy Theory is fundamental in understanding motivation. Proposed by Abraham Maslow in 1943, the theory is based on the idea that human behavior is driven by a hierarchy of needs. This hierarchy consists of five levels, each representing different human needs.

Assumptions of Maslow’s Theory

• Behavior Based on Needs: People’s behavior is driven by their needs, and satisfying these needs influences their behavior.
• Hierarchical Order of Needs: People’s needs are arranged in a hierarchical order, starting from basic needs to higher-level needs.
• Motivation by Higher-Level Needs: Once a need is satisfied, it no longer motivates a person; only the next higher-level need can motivate them.
• Progression Through the Hierarchy: A person moves to a higher level in the hierarchy only after the lower-level need is satisfied.

The Hierarchy of Needs

1. Basic Physiological Needs:
   • These are the most fundamental needs required for human survival.
   • Examples: Hunger, thirst, shelter, sleep.
   • In the organizational context: Basic salary that helps satisfy these needs.
2. Safety/Security Needs:
   • These needs provide security and protection from physical and emotional harm.
   • Examples: Job security, stability of income, pension plans.
3. Affiliation/Belonging Needs:
   • These needs involve affection, a sense of belonging, acceptance, and friendship.
4. Esteem Needs:
   • These include self-respect, autonomy, status, recognition, and attention.
5. Self-Actualization Needs:
   • This is the highest level of need in the hierarchy.
   • Refers to the drive to become what one is capable of becoming.
   • Includes growth, self-fulfillment, and achievement of goals.

Relevance and Criticism

Relevance: The theory is widely recognized for its focus on needs as the basis for motivation. It helps managers understand that identifying the need level of employees is crucial for providing motivation.

Criticism: Some propositions are questioned, especially concerning the classification and hierarchy of needs. Despite criticisms, the theory remains relevant for understanding human behavior.

INCENTIVES

Definition

Incentive means all measures which are used to motivate people to improve performance. They are broadly classified into financial and non-financial incentives.

Financial Incentives

Direct monetary compensation or measurable in monetary terms.

• Pay and Allowances: Basic salary, dearness allowance, and regular increments.
• Productivity-Linked Wage Incentives: Link payment to increases in productivity.
• Bonus: Additional compensation over and above regular salary.
• Profit Sharing: Employees receive a share of the organization's profits.
• Co-Partnership/Stock Option: Company shares offered at a lower price than the market rate.
• Retirement Benefits: Provident funds, pensions, and gratuities.
• Perquisites: Car allowances, housing, medical aid, etc.

Non-Financial Incentives

Focus on satisfying psychological, social, and emotional needs.

• Status: Ranking of positions, authority, and job prestige.
• Organizational Climate: Individual autonomy, reward orientation, and risk-taking.
• Career Advancement Opportunity: Skill development and promotion paths.
• Job Enrichment: Designing jobs with variety, autonomy, and growth opportunities.
• Employee Recognition Programmes: Awards, certificates, and congratulatory messages.
• Job Security: Stability regarding future income and work.
• Employee Participation: Involving employees in decision-making processes.
• Employee Empowerment: Granting more autonomy and power to subordinates.

LEADERSHIP

Definition of Leadership

Leadership is the process of influencing people’s behavior to achieve organizational goals. It encompasses:

• Influencing Others
• Behavioral Change
• Interpersonal Relations
• Achieving Goals
• Continuous Process

[Image of the three leadership styles: autocratic, democratic, and laissez-faire]

Leadership Styles

1. Autocratic (Authoritarian) Leadership:

• Characteristics: Unilateral decisions, one-way communication, rigid approach.
• Advantages: Effective for quick decisions and high efficiency.
• Disadvantages: Low morale, stifles creativity.
• Application: Little time for group decision-making; leader is most knowledgeable.

2. Democratic (Participative) Leadership:

• Characteristics: Collaborative decisions, seeks input and feedback.
• Advantages: Higher satisfaction, better decision quality.
• Disadvantages: Slower decision-making, potential for conflict.
• Application: Skilled group members; plenty of time available.
• Note: Should NOT be used when roles are unclear or time is of the essence.

3. Laissez-faire (Free-rein) Leadership:

• Characteristics: High autonomy, leader provides resources but does not interfere.
• Advantages: Encourages creativity, fosters ownership.
• Disadvantages: Lack of direction, potential for decreased performance.
• Application: Highly skilled/educated followers; pride in work; using outside experts.
• Note: Should NOT be used when followers feel insecure without a leader.

COMMUNICATION

Definition

A process of exchanging ideas, views, facts, and feelings to create a shared understanding among people.

Elements of Communication Process

1. Sender: The individual who conveys thoughts.
2. Message: The content intended for communication.
3. Encoding: Converting message into symbols (words, pictures).
4. Media/Channel: The method of transmission (written, phone, face-to-face).
5. Decoding: Interpreting the symbols.
6. Receiver: The person who receives the message.
7. Feedback: Indication the message was understood.
8. Noise: Obstructions to communication.

Types of Noise in Communication Process

1. Ambiguous Symbols (Faulty Encoding): Using vague words. Example: Announcing a revised schedule without dates.
2. Poor Telephone Connections: Bad signals breaking the flow. Example: Hearing "increase price" instead of "do not increase".
3. Inattentive Receivers: Distraction. Example: Checking Instagram during a safety drill.
4. Faulty Decoding: Wrong interpretation. Example: Thinking "We need to talk" means being fired instead of promoted.
5. Prejudices Obstructing Understanding: Personal bias. Example: Ignoring a good idea just because you dislike the person.
6. Distorting Gestures or Postures: Wrong impression from body language. Example: Yawning during a presentation.

CLASSIFICATION OF COMMUNICATION

Formal Communication

Official channel following organizational structure, typically recorded.

• Vertical Communication: Up and down hierarchy.
  • Upward: Subordinate to superior (Leave applications, reports).
  • Downward: Superior to subordinate (Orders, guidelines).
• Horizontal Communication: Same level interaction (Coordination between department heads).

Formal Communication Networks

• Single Chain: Flows level to level.
• Wheel: All through a central hub (superior).
• Circular: Circle pattern; slower flow.
• Free Flow: Rapid; communicate with anyone.
• Inverted V: Communication with immediate superior and their superior.

Informal Communication (Grapevine)

Outside formal channels; spreads in all directions.

• Spontaneity: Arises from need to exchange info.
• Speed and Distortion: Fast but often creates rumors.
• Impact: Used by managers to gauge reactions.

Grapevine Network Types

• Single Strand: Sequential communication.
• Gossip: One to all, non-selective.
• Probability: Random communication.
• Cluster: Only with trusted individuals (Most common).

BARRIERS TO COMMUNICATION

1. Semantic Barriers

• Badly Expressed Message: Inadequate vocabulary. Example: Vague "Finish next month" instruction.
• Symbols with Different Meanings: Contextual confusion. Example: "Cool" meaning cold vs. great.
• Faulty Translations: Language errors. Example: English "policy" translated as "police".
• Unclarified Assumptions: Assuming prior knowledge. Example: "Do it the usual way" to new members.
• Technical Jargon: Specialist language. Example: Using "firewall" with non-IT staff.
• Body Language and Gesture Decoding: Mixed signals. Example: Saying positive things while looking angry.

2. Psychological Barriers

• Premature Evaluation: Judging before message is finished.
• Lack of Attention: Preoccupied mind.
• Loss by Transmission and Poor Retention: Distortion through levels.
• Distrust: Lack of trust between parties. Example: Ignoring feedback due to perceived unfairness.

3. Organizational Barriers

• Organizational Policy: Policies hindering free flow.
• Rules and Regulations: Rigid procedures causing delays.
• Status: Intimidation due to hierarchy.
• Complexity in Structure: Filtering points in large companies.
• Organizational Facilities: Lack of suggestion boxes or meetings.

4. Personal Barriers

• Fear of Challenge to Authority: Withholding info to protect power.
• Lack of Confidence in Subordinates: Not seeking advice.
• Unwillingness to Communicate: Fearing negative impact on interests.
• Lack of Proper Incentives: No rewards for communication efforts.

IMPROVING COMMUNICATION EFFECTIVENESS

1. Clarify Ideas: Clear problem/message before sending.
2. Adjust to Needs: Match receiver's understanding level.
3. Consult Others: Involve others in the plan.
4. Be Aware: Language, tone, and content appropriateness.
5. Convey Value: Tailor to listener's interests.
6. Ensure Feedback: Seek confirmation of understanding.
7. Future View: Address present and future goals.
8. Follow Up: Review instructions and resolve issues.
9. Be a Listener: Practice attentive and patient listening.

Unit 7: Directing Master Index | Unabridged Edition

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