Revision: Principles and Functions of Management >> Directing Business Studies Commerce (English Medium) Class 12 CBSE

Leadership indicates the ability of an individual to maintain good interpersonal relations with followers and motivate them to contribute to achieving organisational objectives. (or any other correct definition) Styles of leadership (Any two):

1. Autocratic or Authoritarian leader gives orders and expects their subordinates to obey those orders.
2. Democratic or Participative leaders will develop action plans and make decisions in consultation with their subordinates.
3. Laissez-faire or Free-rein leader does not believe in the use of power unless it is absolutely essential.

Leadership is the action of leading people in an organisation towards achieving goals. Leaders do this by influencing employee behaviors in several ways. A leader sets a clear vision for the organisation, motivates employees, guides employees through the work process, and builds morale.

• “Leadership is the ability to influence people to strive willingly for mutual objectives.” - George R. Terry
• “Leadership may be defined as the ability to exert interpersonal influence by means of communication towards the achievement of a goal.” - Koontz and O'Donnell
• “Leadership is the ability to shape the attitude and behavior of others whether in formal or informal situations.” - Hodge and Johnson

Communication is the process of transmitting information from one place to another through a medium.

• Communication is the sum of all things one person does when he wants to create understanding in the mind of another. It involves a systematic and continuous process of telling, listening and understanding. - Louis Allen
• Communication is transfer of information from the sender to the receiver with the information being understood by the receiver. - Harold Koontz and Heniz Weihrich
• Communication is a process by which people create and share information with one another in order to reach common understanding. - Rogers

• Leadership is the activity of influencing people to strive willingly for group objectives. - George Terry
• Leadership is the art or process of influencing people so that they will strive willingly and enthusiastically towards the achievement of group goals. - Harold Koontz and Heinz Weihrich
• Leadership is a set of interpersonal behaviours designed to influence employees to cooperate in the achievement of objectives. - Glueck
• Leadership is both a process and property. The process of leadership is the use of noncoercive influence to direct and coordinate the activities of the members of an organised group towards the accomplishment of group objectives. As a property, leadership is the set of qualities or characteristics attributed to those who are perceived to successfully employ such influence. - Gay and Strake

• Motivation means a process of stimulating people to action to accomplish desired goals. - William G. Scout
• Motivation refers to the way in which urges, drives, desires, aspirations, strivings or needs direct, control and explain the behaviour of human beings. - Mc Farland
• Motivation is a complex force starting with keeping a person at work in an organisation. - Dubin
• Motivation is something which moves the person to action and continues him in the course of action already initiated. - Dubin
• Motivation is a process which begins with a physiological or psychological need or deficiency which triggers behaviour or a drive that is aimed at a goal or incentive. - Fred Luthans

• Directing means instructing, guiding, motivating, and leading employees to achieve organisational goals.
• It is an important managerial function performed at all levels of management.
• Directing initiates action in the organisation after planning, organising, and staffing.
• It is a continuous process that goes on throughout the life of the organisation.
• Directing flows from top to bottom through the organisational hierarchy.

• Meaning – Leadership style refers to the way a leader uses authority to guide and influence subordinates.
• Autocratic Style – The leader gives orders and expects obedience. Communication is one-way, and decisions are taken by the leader alone.
• Democratic Style – The leader consults subordinates and encourages participation in decision-making.
• Laissez-faire Style – The leader gives freedom to subordinates to take decisions and complete tasks independently.
• Situational Use – A leader may use a combination of styles depending on the situation and needs of the organisation.

• Motivation is an internal feeling that drives a person to act.
• It produces goal-directed behaviour towards achieving specific objectives.
• Motivation can be positive (rewards like pay, promotion, recognition).
• It can also be negative (punishment, threats, stopping increments).
• Motivation is a complex process because individuals have different needs and reactions.

• Ability to Influence – Leadership is the ability of a person to influence others.
• Brings Behavioural Change – It aims to change and guide the behaviour of followers.
• Interpersonal Relationship – Leadership involves a strong relationship between leader and followers.
• Achievement of Common Goals – Leadership is exercised to achieve organisational goals.
• Continuous Process & Role of Followers – Leadership is ongoing, and both leaders and followers play an important role in its success.

• Meaning – Leadership is the process of influencing people to work willingly towards achieving organisational goals.
• Role of Leaders – Leaders play an important role in the success and growth of an organisation.
• Influencing Ability – A leader motivates and guides employees to perform better.
• Interpersonal Relations – Good leaders maintain strong relationships with followers to achieve organisational objectives.

• Organisational Policy – Non-supportive or highly centralised policies may restrict free flow of communication.
• Rules and Regulations – Strict rules and lengthy procedures can delay communication.
• Status Difference – Status gap between superior and subordinates may create hesitation and communication barriers.
• Complex Organisation Structure – Too many managerial levels may cause delay and distortion of messages.
• Lack of Communication Facilities – Absence of proper facilities like meetings, suggestion boxes, etc., hampers effective communication.

• Motivation process begins with an unsatisfied need, which creates tension in an individual.
• The tension generates a drive, which pushes the person to take action.
• The individual searches for ways to satisfy the need.
• When the need is satisfied, tension is reduced and the person feels relieved.

• Motivation improves employee and organisational performance.
• It changes negative attitudes into positive attitudes towards work.
• Motivation reduces employee turnover and saves recruitment and training costs.
• It helps to reduce absenteeism by improving job satisfaction.
• Motivation facilitates the smooth introduction of changes with less resistance from employees.

• Meaning – Personal factors of sender and receiver that affect effective communication.
• Fear of Challenge to Authority – Superiors may suppress information if they feel their authority is threatened.
• Lack of Confidence in Subordinates – Superiors may avoid seeking advice if they do not trust their subordinates’ ability.
• Unwillingness to Communicate – Subordinates may hesitate to share information if they fear negative consequences.
• Lack of Incentives – Absence of rewards or appreciation reduces motivation to communicate.

• Motivation means encouraging employees to act in a desired manner to achieve organisational goals.
• Motive is an inner need or desire that drives a person to act.
• Motivation is the process of stimulating people to work willingly and effectively.
• Motivators are tools used by managers, such as pay, bonus, promotion, and recognition.
• Motivation helps employees perform better by satisfying their needs and encouraging voluntary effort.

• Maslow’s Need Hierarchy Theory is based on human needs as the main source of motivation.
• There are five levels of needs: Physiological, Safety, Affiliation, Esteem, and Self-actualisation.
• Lower-level needs must be satisfied first before higher-level needs motivate a person.
• A satisfied need no longer motivates; only the next higher need motivates behaviour.
• The theory helps managers understand employee needs and provide suitable motivation accordingly.

• Financial Incentives – Monetary rewards given to motivate employees for better performance.
• Pay and Allowances – Basic salary with allowances and regular increments.
• Productivity-Linked Wages – Wages increase with higher productivity.
• Bonus – Extra payment given in addition to salary.
• Profit Sharing – Employees get a share in company profits.
• Stock Option/Co-partnership – Employees receive company shares at lower price, creating ownership feeling.
• Retirement Benefits & Perquisites – Benefits like pension, provident fund, housing, medical facilities, etc., that motivate employees.

• Non-Financial Incentives – Motivate employees by satisfying psychological and social needs.
• Status – Higher position and recognition increase self-respect.
• Organisational Climate – A positive work environment improves performance.
• Career Growth – Promotion and skill development motivate employees.
• Job Enrichment – Interesting and challenging work increases satisfaction.
• Recognition – Praise, awards, and appreciation boost morale.
• Job Security & Empowerment – Stable job and decision-making power increase confidence and motivation.

• Meaning – Communication is the process of exchanging ideas, facts, and feelings to create common understanding.
• Origin of the Word – The word communication comes from the Latin word ‘communis’, which means common.
• Role in Management – Effective communication is essential for a manager’s success and directing ability.
• Importance in Organisation – Organisations focus on improving communication skills of managers and employees.
• Purpose – The main aim of communication is to develop mutual understanding between two or more persons.

• Basis of Coordination – Communication helps in coordinating activities, departments, and individuals in the organisation.
• Smooth Working of Enterprise – It ensures smooth and continuous functioning of the organisation.
• Basis of Decision Making – Communication provides necessary information for taking correct decisions.
• Increases Managerial Efficiency – It helps managers in planning, directing, controlling, and supervising effectively.
• Promotes Cooperation and Peace – Two-way communication builds mutual understanding and industrial peace.
• Establishes Effective Leadership – Good communication skills help leaders influence and guide subordinates.
• Boosts Morale and Motivation – Proper communication improves employee morale, motivation, and human relations.

• Meaning – Communication that flows through official channels shown in the organisation chart.
• Vertical Communication – Communication between superior and subordinate (upward and downward).
• Upward Communication – Flow of information from subordinate to superior (e.g., reports, leave applications).
• Downward Communication – Flow of information from superior to subordinate (e.g., orders, instructions, notices).
• Horizontal Communication – Communication between employees or managers of the same level or different departments.
• Communication Networks – The pattern through which communication flows in an organisation.
• Types of Networks – Single chain, Wheel, Circular, Free flow, and Inverted V networks.

• Meaning – Communication that does not follow official channels and is known as the grapevine.
• Nature of Grapevine – It spreads quickly in all directions without following levels of authority.
• Purpose – It arises from employees’ need to share views, feelings, and information informally.
• Advantages and Disadvantages – It spreads information rapidly but may create rumours and distortion.
• Types of Grapevine Networks – Single strand, Gossip, Probability, and Cluster (most common).

• Meaning of Semantic Barriers – Problems in communication caused by the misunderstanding of words, meanings, or language.
• Badly Expressed Message – Use of wrong words, poor vocabulary, or incomplete sentences may create confusion.
• Words with Different Meanings – A single word can have different meanings in different situations, leading to misunderstanding.
• Faulty Translation – Incorrect translation from one language to another may change the meaning of the message.
• Unclarified Assumptions – Messages based on unclear assumptions may be interpreted differently by the receiver.
• Technical Jargon – Use of technical or difficult words may not be understood by everyone.
• Body Language Issues – Mismatch between spoken words and gestures can create wrong interpretation.