Directing Class 12 Business Studies Exam Questions

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Class 12 Business Studies Exam Questions Directing

Class 12 Business Studies students should read and understand the important questions and answers provided below for Directing to understand all important and difficult topics.

Short Answer Type Questions :

Question. Pramod was a supervisor at ‘Annapurna Aata’ factory. The factory was producing 200 quintals of aata every day. His job was to make sure that the work goes on smoothly and there was no interruption in production. He was a good leader who would give orders only after consulting his subordinates and work out the policies with the acceptance of the group.
Identify and describe the leadership style being adopted by Pramod.
Ans. Democratic leadership style is being adopted by Pramod, as he gives orders only after consulting his subordinates with the acceptance of the group.
A democratic leader takes decisions after consultation and encourages the participation of subordinates. This  leadersh ip style is more common and popular, as it ensures achievement of goals when they are set with the  acceptance of the subordinates themselves. A democratic leader provides freedom of thinking and listens to  suggestions, grievances and opinions of the subordinates. This improves the attitude of the employees towards their  jobs and the organisation, thereby increasing their morale. This style is of mutual benefit which allows subordinates to become part of team and help leaders (seniors) to make better decisions.

Question. Workers of a factory often come to the production manager with the grievances. The production manager finds himself overburdened with so many tasks. Advise a way to relieve the production manager. 
Ans. The production manager should offer appropriate incentives to the workers in order to improve their performance and to change negative attitude of workers to positive.
Financial incentives such as bonus, profit sharing, stock option and non-financial incentives such as status, job enrichment, employee recognition, employee participation and employee empowerment can be effectively used by the manager.

Question. ‘‘Leadership is an essential element of directing’’. Do you agree? Give three reasons in support of your answer.
Or
‘‘Leadership is considered the most important element of directing’’. In the light of this statement, explain any three points of importance of leadership.
Ans. Yes, leadership is the most important element of directing as it helps in influencing the behaviour of others for the accomplishment of goals.
Importance of leadership can be explained as follows
(i) Leadership influences the behaviour of people and makes them to positively contribute their energies for the benefit of the organisation.
(ii) A leader maintains personal relations and helps his followers in fulfilling their needs. He provides needed confidence, support and encouragement to subordinates.
(iii) A leader plays a key role in introducing required changes in the organisation. He persuades and inspires the subordinates to accept changes.

Question. Explain any three assumptions of Maslow’s need hierarchy theory.
Ans. Abraham Maslow gave a theory based on human needs. He felt that within every human being, there exists a hierarchy of five needs. His theory is based on certain assumptions which are as follows
(i) He believed that human behaviour is based on their needs. Satisfaction of such needs influences their behaviour. When one need is satisfied, they will move to strive for other needs.
(ii) A satisfied need can no longer motivate a person to work, only next higher level need can motivate him. 
(iii) A person moves to the next higher level of the hierarchy only when the lower need is satisfied.

Question. Sultan was a regional manager in ‘Homely Products Ltd.’ for the last eight years. On the retirement of the marketing manager, Sultan applied for the same post because he was extremely ambitious and had dedicated all his energies to obtain the post of marketing manager. However, the top management decided to fill the position by selecting a better person
from outside the company. Because of this, Sultan was heartbroken and his performance declined.
When the new marketing manager joined, one of his major problems was how to motivate and inspire Sultan to his former level of performance. Suggest any three non-financial benefits that the new marketing manager may use to motivate Sultan. 
Ans. The non-financial incentives that the new marketing manager may use to motivate Sultan are
(i) Job Enrichment Employees get bored by performing routine job. They enjoy doing jobs which offer them variety and opportunity to show their skill. By offering challenging jobs, autonomy to perform job, interesting jobs, employees get satisfied and they are motivated.
(ii) Employee’s Recognition Whenever the good efforts or the positive attitude is shown by the subordinates then it must be recognised by the superior in public or in presence of other employees. Whenever if, there is any negative attitude or mistake is done by subordinate then it should be discussed in private.
(iii) Employee Participation It means involving employee in decision-making especially when decisions are related to workers. Employees follow the decision more sincerely when these are taken in consultation with them.

Question. Aarav was working as a supervisor with ‘Neer Purifier Ltd.’ which was producing water purifiers. The target of the company was to produce 200 water purifiers every day. His job was to make sure that work goes on smoothly and there was no interruption in production. To achieve this, he always gives orders and insists that they are obeyed. He believes that reward or punishment both can be given depending upon the performance. Identify and describe the leadership style being adopted by Aarav. 
Ans. Aarav has adopted autocratic style of leadership. An autocratic leader gives orders and insists that they are obeyed. He determines the policies for the group without consulting them. He does not give information about future plans but simply tells the group what immediate steps they must take. Under this style, all decision making power is centralised in the leader. He does not give the subordinates any freedom to influence his decisions. It is like “bossing people around.” This style should normally be used on rare occasion.

Question. ‘AS Environs Ltd.’ is dealing in Environment-Consultancy. To get the business, the team leader and his team used to travel to different states to give presentation to their clients. As per the policy of the company, the team leader used to travel by air whereas his team travelled by road/train.
It was not only time consuming, but also at times forced the female team members to travel alone. As a result, the subordinates were not acting in a desired manner to achieve organisational goals. The CEO of the company came to know about it. He called the team leader, discussed the matter with him and decided to change the travel policy of  the company.
It was decided that in future all the members including the leader would travel together and usefully utilise the travelling time in discussion about the presentation to be given to the clients. This made a positive impact and every member of the team started acting in a manner as desired by the team leader.
State the features of the element of the function of management used by the CEO. 
Ans. The function of management being performed by the CEO is ‘direction’ and the element of ‘direction’ used by him is ‘motivation’.
Features of motivation are as follows
(i) Psychological Phenomenon Motivation is an internal feeling which means it cannot be forced on employees. The internal feeling such as need, desire, aspiration, etc. influence human behaviour to behave in a particular manner.
(ii) Goal Directed Behaviour It induces people to behave in such a manner so that they can achieve their goals. A motivated person works towards the achievement of desired goals.
(iii) Motivation can be either Positive or Negative Positive motivation means inspiring people to work better and appreciating a work that is well done, e.g., pay increase, promotion, recognition. etc. Negative motivation means forcing people to work by threatening or punishing them. e.g., issue of memo, demotion, stopping increments, etc.
(iv) Complex Process It is a complex and difficult process. Individuals differ in their needs and wants and moreover human needs change from time to time.

Question. Blue Chips Ltd. offers to its employees, issue of shares at a price which is less than the market price.
(i) Name and explain the type of incentive offered to the employees.
(ii) Explain one more incentive of the same category.
Ans. (i) By offering its employees, issue of shares at a price less than the market price, Blue Chips Ltd. offered ‘co-partnership’ which is a financial incentive. The company did so in order to motivate its employees to work with great zeal.
Financial Incentives It refers to those incentives which are measurable and paid in monetary form. 
(ii) Bonus is an incentive offered over and above wages/salaries to the employees.

Question. Explain any three points that highlight the importance of directing function of management.
Ans. Directing is important because of the following reasons
(i) Integrates Employees Directing integrates employees efforts in the organisation in such a way that every individual’s effort contributes to the welfare of the organisation. Thus, it ensures that employees work efficiently for the attainment of goals.
(ii) Improves Efficiency Directing guides employees to fully realise their potentials and capabilities. Through this function, managers utilise the potential of employees and persuade them to work with the best of their ability and contribute their maximum efforts towards the achievement of organisational objectives.
(iii) Facilitates Change Business environment is changing very frequently, but the people generally have a tendency to resist change. In this context, 
directing helps manager to persuade his subordinates to carry out changes from time to time to cope with changes in the environment, as the changes are necessary to adapt and it is the need of modern business.

Question. ‘A leader who has only good physical features and required knowledge and competence cannot inspire others to work’. Then what else is required by a leader to be successful? Explain by giving any four points. 
Ans. Apart from physical features, knowledge and competence; a leader requires many other qualities which are as follows
(i) Good Communication Skills A leader should have good communication skills so that he can explain his ideas, guide and motivate his followers. He needs to be a good listener too.
(ii) Initiative The leader does not wait for others, but takes the first step and create opportunities.
(iii) Motivation Skills He should be able to influence the actions of people through proper motivation.
(iv) Social Skills A leader must be sociable and have friendly relations with the followers and understand their problems.

Question. Riya and Jiya are working in different departments, but are very close friends. During lunch time, Riya informs Jiya that due to the impact of COVID-19 on business organisations, many people have lost their jobs.
Identify the type of communication highlighted in the above said case. Also, state any two advantages and one disadvantage of this type of communication.
Ans. Communication between Riya and Jiya is informal communication.
Advantages of informal communication are
(i) It helps individuals to communicate on matters, which cannot be transmitted through the formal communication.
(ii) It enables the employees to develop friendly relations and get social satisfaction. It satisfies their urge to know, what is happening in the organisation. 
Disadvantages of informal communication are (any one) 
(i) It tends to be unsystematic, irregular and untimely. It is neither reliable nor predictable.
(ii) It is not easy to fix responsibility for actions taken on the basis of informal communication. The origin of such communication in not easily traceable.

Question. Mention about the various informal communication networks.
Ans. Some popular informal communication networks are as follows
(i) Single Strand Network In this network, each person communicate with another in a sequence.

(ii) Gossip Network In this network, one person communicates with all at the same time.

(iii) Probability Network In this network, any person can communicate with anyone else randomly.

(iv) Cluster Network In this network, an individual communicates with only those people whom he trusts.

Question. Sadaf is the Chief Executive Officer of a reputed company. She introduced appropriate skill development programmes and a sound promotion policy for the employees of her company. To motivate and retain the best talent in the company, she designed the jobs of the managers to include greater variety of work content.
Identify and explain the two incentives introduced by Sadaf to motivate the employees of her company. 
Ans. The two incentives used by Sadaf to motivate the employees of her company are
(i) Career Advancement Opportunity Every individual aspires for growth and development in his life. Managers should provide opportunity to employees to improve their skills and be promoted to the higher level jobs. Interesting, enriched and challenging job itself is a very good motivator.
(ii) Job Enrichment It is concerned with designing jobs that include greater variety of work content requiring higher level of knowledge and skill. It give workers more autonomy, responsibility and provide the opportunitv for personal growth.

Question. Explain the various networks of formal communication.
Ans. The pattern through which communication flows within the organisation is indicated by communication network. Some popular formal communication networks are as follows
(i) Single Chain In this network, communication flows from every superior to his subordinates in a single chain.

As shown in the diagram, communication flows from A to B, from B to C and so on.
(ii) Wheel Network In this network, all subordinates working under a superior communicates through him only. The superior is at the ‘hub’ of the wheel, communicating with all at the same time.

As shown in the diagram, B,C,D and E can only communicate through A.
(iii) Circular Network In this network, communication moves in a circle, from one person to another. But, communication is slow in this network. Each person can communicate with two adjoining colleagues. Here, A can communicate with B and E, and likewise others communicate in the circle.

(iv) Free Flow In this network, each person can communicate with others freely and therefore, communication is fast in this network. In the diagram, A can communicate with B,C,D and E,B can communicate with A,E,C,D and so on.

Question. Avdhesh is the managing director of Delta Ltd. The company had established a good name for itself and had been doing well. It was known for timely completion of orders. The production manager, Ms. Priyanka was efficiently handling the processing of orders and had a team of ten motivated employees working under her. Everything was going on well.
Unfortunately, Priyanka met with an accident. Avdhesh knew that in the absence of her the company may not be able to meet the deadlines. He also knew that not meeting the deadlines may lead to customer dissatisfaction with the risk of loss of business and goodwill.
So, he had a meeting with his employees in which accurate and speedy processing of orders was planned. Everybody agreed to work as a team because the behaviour of Avdhesh was positive towards the employees of the organisation. Hence, everyone put in extra time and efforts and the targets were met on time. Not only this, Avdhesh visited Priyanka and advised her to take adequate rest.
(i) Identify the leadership style of Avdhesh and draw a diagram depicting the style.
(ii) Mention any two qualities of good leader Avdhesh have?
Ans. (i) The leadership style of Avdhesh is democratic/participative leadership. Under this style, leader consults his subordinates in decision-making process and works out policies with the acceptance of the group.
He encourages them to give suggestions in setting goals and implementing decisions. It is group centered leadership.

(ii) Avdhesh has following qualities of a good leader
(a) Initiative
(b) Communication skills

Question. Differentiate between formal and informal communication.
Ans. Difference between formal and informal communication

Basis	Formal Communication	Informal Communication
Mutual Relationship among Members	Based on formal superior-subordi nate relationship.	Based on interpersonal contacts.
Nature	Systematic and orderly.	Unsystematic and irregular.
Speed of Communication	It is slow and time consuming.	It is fast and time saving.
Authenticity	Official and well planned messages are authentic.	Unofficial and un-planned messages may not be authentic.
Contents or Subject Matter	Work related matters, e.g. orders and instructions are communicated.	Personal matters are discussed.
Objectives	To achieve organisational objectives.	To meet personal needs and interests.

Question. Explain the meaning and any three characteristics of directing. 
Ans. Directing refers to the process of instructing, guiding, leading and motivating people in an organisation to achieve predetermined goals.
Characteristics of directing are
(i) Directing Initiates Action Directing is an executive function of management.While the other functions prepare a setting for action, directing initiates action in the organisation. Therefore, a manager has to perform this function according to planning, organising, staffing and controlling.
(ii) Directing takes Place at all Levels Every manager from top to bottom performs the function of directing or in other words, we can say, directing takes place wherever superior-subordinate relationship exists.
(iii) Directing is a Continuous Process It is an ongoing process. It does not mean issuing an order or instruction but a manager must continuously guide, inspire and supervise his subordinates, so that organisational goals are achieved on time. This function continues throughout the lifetime of an organisation. If direction in the organisation stops, it ceases to work and grow.

Question. ‘‘Autocratic style of leadership is appropriate where subordinates are uneducated.’’ In the light of this  statement, give some advantages of autocratic style of leadership.
Ans. Autocratic style of leadership is appropriate, where the subordinates are uneducated because here the leader gives orders which are to be obeyed.
Advantages of autocratic style of leadership are
(i) Autocratic style permits quick decision-making.
(ii) It provides strong concentrated powers to leader.
(iii) This style may yield positive results when great speed is required.

Long Answer Type Questions :

Question. Discuss in brief the process of communication and show the process through diagram.
Ans. The communication process consists of the following elements

(i) Sender The person who conveys the message, is known as the sender or communicator. He may be a speaker, a writer or an actor.
(ii) Message It is the subject matter of communication. It may consist of facts, information, ideas, opinions, etc. It exists in the mind of the sender.
(iii) Encoding The sender translates the message into words, gestures or other symbols, which he feels will make the receiver understand the message.
(iv) Channel or Media The encoded message is transmitted through some medium, which is known as the communication channel. e.g. speaking, writing, phone call, internet, etc.
(v) Decoding It means process of conversion of symbols into the message by the receiver.
(vi) Receiver The person, who receives the message, is called the receiver. The receiver may be a listener, reader or viewer.
(vii) Feedback The receiver sends his response to the sender of the message. Such response is known as feedback.
(viii) Noise It means an obstruction or hindrance in the communication process.

Question. It is interesting and inspiring to know about NR Narayana Murthy, Ex-Chairman of Infosys, an IT legend, institution builder, a leader par excellence and embodiment of directing abilities. He started his career as head of the computer centre at IIM, Ahmedabad.
He started Infosys, a small software company alongwith his friends in 1981 and turned it into a global IT company by 2002. He was the chief mentor, CEO of the company for two decades. During that time, he took the company to unimaginable heights. With an equity capital of ` 10,000 in 1981, Infosys market capitalisation reached ` 11 billion by 2001. Infosys became one of the biggest exporter of software from India. It is the first company to be listed in Nasdaq stock market in 1999. Narayana
Murthy is remembered as a top leader for many things. He had supreme confidence on his team members, executives and workers.
He nurtured and developed leadership qualities through coaching and training. He started Infosys Leadership Institute in early 2001 to help promising infoscians to develop into global leaders. Mr. Murthy leads by example
and by trust. Very often, he used to say “A true leader is one who leads by example and sacrifices more than any one else, in his or her pursuit of excellence”. He truly practiced and proved it in Infosys. Mr. Murthy always motivated his team. He introduced number of motivational schemes including the novel stock option scheme for the executives of Infosys. Narayana Murthy was associated with many national and international bodies in different capacities and extended his services to the wide ranging activities.
He received number of awards and rewards from academic, social and business community. Following the norms setup by himself, Narayana Murthy handed over reins of Infosys to his friend and co-founder Nandan Nilekani in 2002.
(i) In the light of the above case, state the qualities of a good leader.
(ii) Why do you think leadership is important in an organisation?
Ans. (i) Following are the qualities of a good leader
(a) Physical Features A good leader must possess a good height, weight, health and appearance. Health and endurance help a leader to work hard and inspire others also to do so.
(b) Knowledge A good leader should have required knowledge and competence, so that he can influence others.
(c) Integrity A leader should possess high level of integrity and honesty, so that he can be a role model to others.
(d) Initiative A leader should have courage and initiative to do things on his own, rather than waiting for others to do it first.
(e) Communication Skills A leader should be a good communicator. He should be able to clearly explain his views to others. He should not only be a good speaker, but a good listener, teacher and counsellor.
(f) Motivation Skills A leader should understand the needs of his employees and motivate them by satisfying their needs.
(ii) Leadership is essential in making an organisation successful, because of the following reasons
(a) Influences the Behaviour of People A good leader influences the behaviour of people and contributes their energies for the benefit of the organisation.
(b) Provides Confidence A leader maintains personal relations and helps his followers in fulfilling their needs. He provides confidence, support and encouragement to his followers.
(c) Introduces Changes Leaders play a key role in introducing required changes in the organisation. They help in solving the problem of ‘resistance to change’ by inspiring and persuading employees to accept the changes.
(d) Handles Conflicts A good leader helps in solving the conflicts, allows his followers to ventilate their feelings and disagreements, and persuades them by giving suitable clarifications.

Question. Anjali had been working with ‘Tata Enterprises’ for the last ten years. She was famous for her dedication towards the work. When the manager senior to her retired, all her colleagues thought that now Anjali would be promoted. But to everyone’s surprise the vacant post was filled by an outsider ‘Ms Monika’. Anjali felt demoralised and her performance started declining. She would absent
herself often and could not meet her targets. 
Ms Monika was a good leader who would not only instruct her subordinates, but also guide and inspire them. She noticed Anjali’s behaviour and felt that her performance could be improved.
She started involving Anjali in decision-making issues related to the organisation and made her a part of a high-level joint management committee. Anjali was now punctual to office and her performance started improving.
(i) Identify the function of management being performed by Monika.
(ii) Name the element of the above function of management which helped Monika to improve Anjali’s behaviour.
(iii) State any three features of the element identified in (ii) above. 
Ans. (i) Directing
(ii) Motivation By providing non-financial incentives in form of making her a part of joint management committee, helped in improving her performance by changing her negative attitude to positive attitude.
(iii) Three features of motivation are 
(a) Motivation is a Psychological Phenomenon It is a personal and internal feeling like an urge, drives, desires and aspirations of human being, which influence human behaviour.
(b) Goal Directed Behaviour Motivation inspires an employee to achieve goals. Thus, it encourages goal directed behaviour.
(c) Motivation may be Positive or Negative Positive motivation means inspiring people to work better by providing incentives and negative motivation means forcing people to work by threatening or punishment.

Question. Ela is running a successful business of providing high-end beauty services to the upper section of society. Her parlour boasts of innovative beauty products. She has an in-house training programme for new employees. Also, she believes in high standards of performance and shares her profits with her employees. She also gives them yearly bonus and salary hikes. But still she feels that her employees are not as motivated as she wants them to be.
(i) Are financial incentives the only way to motivate employees?
(ii) What are non-monetary incentives?
(iii) State and explain any four non-monetary incentives which contribute to the performance of employees.
Ans. (i) No, financial incentives are not the only way to motivate employees. Employees can also be motivated with the help of non-monetary incentives.
(ii) Non-monetary Incentives These are not directly related with money. These incentives help in the satisfaction of top hierarchy needs like respect, self-actualisation, etc.
(iii) Following are the four important types of non-monetary incentives
(a) Status It means the position or rank of a person in the organisation. It can be high or low. The rank of an employee is directly linked with his authority, responsibility and other facilities (e.g. a separate cabin, costly furniture, car, peon, PA, etc).
Everybody has a wish for a higher status. There- fore, the employees can be motivated by raising their rank or position. The attainment of a higher status fulfils the psychological, social and esteem needs.
(b) Career Advancement Opportunity Every employee of the organisation wants to advance in his life. Promotion is an important example of advancement. When the avenues for promotion are available, the employees certainly get motivated.
(c) Employee Recognition Programmes Every employee wishes to be considered as an important part of the organisation. It means that he should have his own identity and he should appear to be distinctive. The manager should distribute work among the employees in such a manner which gives a feeling to every employee that his work is special and he alone is capable of doing it. By
getting such kind of importance, they are motivated and work harder in a more responsible manner.
(d) Employee Participation Employees get encouraged if they are allowed to participate in managerial works. Therefore, they offer their full cooperation in making successful the policies prepared with their help.

Question. Prateek is working in a multi-national company in Noida. He was running temperature for the last many days. When his blood was tested, he was found positive for malaria. He was admitted in the hospital and a blood transfusion was advised by the doctors as his condition was very serious. One of his colleagues sent a text message to his superior ‘Mr B Chatterjee’. Mr B Chatterjee, immediately sent a text message to the employees of the  organisation requesting them to donate blood for Prateek. When the general manager came to know about it he ordered for fumigation in the company premises and for cleaning the surroundings.
(i) From the above para, quote lines that indicate formal and informal communication.
(ii) State any two features of both formal and informal communication. 
Ans. (i) Formal communication takes place through official channels in an organisation.
Lines that indicate formal communication are “When the general manager ………….. the surroundings.”
Informal communication takes place without following the formal lines of communication. Lines that indicate informal communication are “One of his colleagues …………… for Prateek.”
(ii) Two features of formal communication are
(a) It takes place by following the formal lines of communication.
(b) It helps in fixing responsibility as source of information can be located.
Two features of informal communication are
(a) Informal communication spreads rapidly but gets distorted.
(b) The source of informal communication cannot be detected easily.

Question. Markfed Foods Pvt. Ltd. has appointed a new HR manager, who has completed his MBA from the most  renowned institution in India. He was a gold medalist and has also been acknowledged as the best trainee during his internship in a firm. Soon after his joining, the management noticed a drastic change in the attitude of workers towards their work.
They were willing to accept new challenges take up more challenging jobs and were able to achieve targets efficien -tly and effectively. Soon, the company prospered and established its name in the market. On being enquired, he confessed that all this change is attributed to Maslow’s Theory of Motivation. Briefly explain Maslow’s Need Hierarchy Theory.
Ans. Maslow’s Need Hierarchy Theory of Motivation was given by Abraham Maslow. It is based on human hierarchy of five needs which are depicted and explained below

(i) Basic Physiological Needs These are the basic needs, which a person is required to satisfy in order to survive. Hunger , thirst, shelter and sleep are some of the examples of these needs. In an organisation, basic salary helps to satisfy these needs.
(ii) Safety/Security Needs These needs are concerned with physical, economic and social security in the form of job security, stability of income, etc.
(iii) Affiliation/Belongingness/Social Needs These needs are concerned with affection, sense of belongingness acceptance and friendship. It is fulfilled when employees have cordial relations with colleagues.
(iv) Esteem Needs These needs include factors such as self-respect, status and recognition. When these needs are fulfilled through job title, it enhances self-confidence and prestige of employees.
(v) Self-actualisation Needs It is the highest level of need in the hierarchy. It arises after the satisfaction of all previously discussed needs. These needs include growth, self-fulfilment and achievement of goals.

Question. Leadership is the process of influencing people to make them work enthusiastically towards the achievement of group goals, though, different leaders have different leadership styles. With reference to this, explain the different leadership styles.
Ans. (i) Autocratic Leadership In this style of leadership, leader gives orders and subordinates are expected to follow them unquestioningly, i.e., leader exercise complete control over subordinates. There is no delegation of authority at all with communication being one way only. He takes all the decisions by himself.
(ii) Democratic Leadership In this style of leadership, leader makes plans and policies in consultation with the subordinates. Leader shares his powers by extending his authority to some extent. The communication process is two-way and there is interchange of ideas and recognition of human values.
(iii) Free-rein Leadership In this style of leadership, subordinates themselves take the decisions. There is complete delegation of authority and free flow of communication is allowed. Since, the leader avoids power, subordinates assume responsibility for the work to be performed.