NCERT Notes for Class 12 business studies Chapter 7 DIRECTING

Class 12 business studies Chapter 7 DIRECTING

NCERT Notes for Class 12 business studies Chapter 7 DIRECTING, (business studies) exam are Students are taught thru NCERT books in some state board and CBSE Schools. As the chapter involves an end, there is an exercise provided to assist students to prepare for evaluation. Students need to clear up those exercises very well because the questions inside the very last asked from those.

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NCERT Notes for Class 12 business studies Chapter 7 DIRECTING

Class 12 business studies Chapter 7 DIRECTING

Efficient planning, sound organization and staffing may serve no purpose unless accompanied by effective direction of activities. In simple sense directing means giving instructions to others. In the context of managing an organization, directing means instructing, guiding, supervising, motivating and leading the subordinates to contribute to the best of their capabilities for the achievement of organizational goals. If the subordinates are not properly guided, supervised and motivated, they will become inactive, inefficient and gloomy. It is the heart of management in action.


According to Earnest Dale, “Direction is telling people what to do and seeing that they do it in the

best possible manner”.

Through staffing function the right person is placed at the right position in an organization. But actual work begins only when these persons get instructions from their superiors. The main motive of directing is bringing efficiency in performance. Directing convert plans into performance. Performance is the essence of directing.

Characteristics of directing

1- Directing Initiates Action:

Other managerial functions like planning, organizing, staffing etc. create a base for action. But directing initiates or start action in the organization.

2- It is a continuous process:

A manager cannot rest after issuing orders and instructions. He has to continuously guide, supervise and motivate his subordinates.

3- Directing takes place at every level:

Directing is a pervasive function as it is performed by managers at all levels and in all locations. However, the time spent in directing is comparatively more at operational level of management. Directing takes place wherever superior subordinate relation exists.

4- Directing flows From Top to Bottom:

Directions are given by managers to their subordinates. Every manager can direct his immediate subordinate and take directions from immediate boss. Directing starts from top level and flows to lower level.

Importance of Directing

Directing is the heart of management. The importance of directing in the organization can be understood by the following points:

  1. Initiates action: Direction is known as management-in-action. Planning, organizing and staffing functions create a condition for taking appropriate actions. The actual work of the organization starts with directing function.
  2. Integrates employee’s efficiency: In an organization, there are large number of employees and employees are working at different levels. Through, directing managers integrates individual and group goals with organizational objectives.
  3. Guides employees to realize their potential: Through directing a good leader can always identify the potential of his employees and motivate them to extract work up to their full potential.
  4. Facilitates introduction of changes: Generally, people have a tendency to resist changes in the organization. But effective directing through motivation, communication and leadership helps to reduce such resistance and develop cooperation in introducing the change in the organization.
  5. Ensures stability and balance: Generally, when the employees working at different levels, they develop different attitudes and the balance between their attitudes is made by directing function.

Principles of Directing

Directing is a complicated process, it involves many complexities. A manager has to deal people with diverse background and expectations. So, the manager has to follow some principles which may guide him in the process of directing. They are:

Maximum individual contribution:

Directing technique should be made in such a way that they must help every individual to contribute his maximum potential for the achievement of the organizational objectives. A good motivation plan with monetary and non-monetary rewards can motivate an employee to contribute his maximum efforts for the organization.

Harmony of objectives:

According to this principle, directing should provide harmony between the organizational objectives and the individual objectives of the employees. For example, an employee may expect attractive salary to fulfill his personal needs on the other hand the organization may expect employee to improve productivity to achieve expected profits.

Unity of command:

This principle insists that an employee in the organization should receive orders and instructions only from one superior at a time. To avoid confusion and to give no chance of excuse to employee, the orders must come from one boss only.

Appropriate technique:

According to this principle, appropriate motivational and leadership technique should be used while directing the people based on subordinate needs, capabilities and other situational variables.

Managerial communication:

Effective managerial communication across all levels in the organization makes direction effective. Communication is a two-way process i.e.; communication does not mean only giving of instructions by superior to subordinates but it also means clear feedback from subordinates to superior.

Strategic use of informal organization:

In every organization, there exists informal groups or organizations within every formal organization.The manager should be aware of it and make use of such organizations for effective directing.

Effective leadership:

A manager must possess the qualities of a good leader. He must guide and counsel his subordinates not only on work problems but also on their personal problems.

Follow up:

Directing involves instructing, guiding, ordering etc. Mere issue of orders and instructions is not enough. Managers should make follow-ups to ensure whether the instructions and orders are implemented properly.

Elements of Direction

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

  • A supervisor explains a worker about operations to be carried by him on a particular machine and supervise his work. (Supervision)
  • Managing Director declares share in the profits to the managers for their contribution to enhance profit of the company (Motivation)
  • A mining engineer explains about safety precautions to be followed while working in a coal mine (Communication).
  • A manager inspires his employees by playing a lead role in performing a work (Leadership)

Thus, directing involves four components/elements. They are:

  1. Supervision
  2. Motivation
  3. Leadership
  4. Communication


Supervision means overseeing the subordinates at work. Supervision is instructing, guiding and controlling the work force with a view to see that they are working according to plans, policies and instructions. Supervision actually takes place continuously at all levels of the organization. Top level management supervises the performance of the middle level management who in turn supervises the performances of the lower-level management. The person who supervises the performance of the subordinates is called supervisor.

Importance/Role/Functions of Supervision/Supervisor

Importance of supervision can be understood from the different roles plays by supervisors. These are explained below:

  1. Maintains day to day contact: The supervisor maintains day to day contact with the workers. He acts as a guide, friend, and philosopher to the workers.
  2. Act as a link between workers and management: Supervisor act as link between workers and management. It helps to avoid misunderstandings and conflicts among the management and workers.
  3. Provides on the job training: Supervisor provides good on- the-job training to the workers and builds efficient team of workers.
  4. Ensures performance of work: Supervisor ensures performance of work according to the targets set. He takes responsibility for tasks achievement and motivates his workers effectively.
  5. Gives feedback: Supervisor analyze the work performed and gives feedback to the workers. He suggests ways and means of developing work skills.

2. Motivation

The term motivation is derived from the word ‘motive’. Motive means needs or wants within an individual. Motivation stimulates people to work voluntarily. Motivation can be defined as stimulating, inspiring and inducing the employees to perform to their best capacity. Motivation is a psychological term which means it can’t be forced on employees. It comes automatically from inside the employees as it is the willingness to do the work. Motivation depends upon satisfying the needs of people.

While discussing about motivation, we need to understand three interrelated terms-motive, motivation and motivators.

  1. Motive: – A motive is an inner state or desire which activates and directs the behavior of an individual to achieve certain goal. Some such motives are hunger, security; recognition etc. Motives arises out of needs of an individual. It causes restlessness as he wants to fulfill his motive. Example: Individual search for food to fulfill the motive of hunger.
  2. Motivation: – It is the process inducing people to perform to their best ability to accomplish the organizational goals. Motivation depends upon satisfying needs of people.
  3. Motivators: –Motivators are the incentives or techniques used to motivate the people in an organization. Common motivators used by the managers are increment, bonus, promotion, respect etc.

Features of motivation

Motivation comprises the following features:

  1. An internal feeling: Motivation is an internal feeling. The internal feelings like desire, need and aspirations influence the human behavior to behave in a particular manner.
    • E.g. Desire for getting selection to a particular football club.
  2. Motivation produces goal-oriented behavior: It induces people to behave in such a manner, so that they can achieve their goals. For e.g., if a student has a motive to get full A+ in all the subjects, he will study well to achieve that goal.
  3. Motivation can be positive or negative: To motive employees, the managers use various motivators. Some are positive and some are negative. The positive motivation provides positive rewards like increase in salary, promotion and awards; etc. The negative motivation provides negative rewards like warning, punishment and demotion etc.
  4. Complex process: Motivation is a complex process, as it tries to influence human behavior differs from person to person. Motivational facts have no uniform impact on individuals.
  5. Continuous process: Satisfaction of one need gives rise to another need. So, it is a continuous and never ending one.

Motivation Process

Motivation process is based on human needs. An unsatisfied need of an individual creates tension/restlessness which stimulates his drives. These drives generate a search behavior to satisfy such need. If such need is satisfied, the individual is relieved of tension.

Illustration-Motivation process

Stage-1 An employee has the need for a promotion (Unsatisfied need)

Stage-2 It creates a tension in him (Tension)

Stage-3 Tension/restless leads to drive (Drive)

Stage-4 He will fix promotion as a goal and it leads to search behavior (for example attains higher qualifications like MBA) to reach the goal (Search behavior)

Stage-5 The employee gets promotion (Satisfied need)

Stage-6 This reduces his tension (Reduction of tension)

Need and Importance of motivation

Motivation is the life blood of an enterprise. It is the systematic process of generating enthusiasm among employees to decide their best of efforts to the enterprise. Its importance is summarized as under:

  1. Motivation improves performance of employees: Motivation improves performance level of employees as well as the organization. A motivated worker performs in a better way than the others.
  2. Ensures positive attitude of employees: Motivation helps to change the negative attitude of employees to positive attitude.
  3. Reduce employee turnover: Motivation helps to reduce employee turnover and thereby saves cost of new recruitment and training. If managers identify motivational needs of employees and provide suitable incentives, employees may not think of leaving the organization.
  4. Motivation helps to reduce absenteeism in the organization: If adequate motivation is provided, work becomes a source of pleasure and workers will be regular in their work.
  5. Better organizational image: To motivate the workers, monetary and non-monitory incentives are provided. Moreover; workers will be provided with good working conditions. All these will give a good image to the concern.

Maslow’s Need Hierarchy Theory of Motivation

Motivation is highly complex. Researchers have studied about motivation from different angles and developed theories accordingly. Maslow’s Need Hierarchy Theory is prominent among them.

Abraham Maslow, an eminent U. S psychologist developed a theory of motivation based on the hierarchy of needs. According to him, there are five kinds of needs. They care: –

  1. Basic physiological needs: These needs are most basic in the hierarchy and are termed primary needs. Hunger, thirst, shelter, sleep and sex are some examples of these needs. In the organizational context, basic salary helps to 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 etc.
  3. Affiliation/Belonging Needs: These needs refer to affection, sense of belongingness, acceptance and friendship.
  4. Esteem Needs: These include factors such as self-respect, autonomy status, recognition and attention.
  5. Self Actualisation Needs: It is the highest level of need in the hierarchy. It refers to the drive to become what one is capable of becoming. These needs include growth, self- fulfillment and achievement of goals.

Maslow’s theory is based on the following assumptions:

  1. People’s behaviour is based on their needs. Satisfaction of such needs influences their behaviour.
  2. People’s needs are in hierarchical order, starting from basic needs to other higher level needs.
  3. A satisfied need can no longer motivate a person; only next higher level need can motivate him.
  4. A person moves to the next higher level of the hierarchy only when the lower need is satisfied. Maslow’s Theory focuses on the needs as the basis for motivation. This theory is widely recognised and appreciated.

Maslow’s theory helps managers to realise that need level of employee should be identified to provide motivation to them.

Financial and Non-Financial Incentives

Incentive means all measures which are used to motivate people to improve performance. These incentives may be broadly classified a s financial and non-financial.


Non-financial Incentive

  1. Status
  2. Organisational Climate
  3. Career Advancement Opportunity
  4. Job Enrichment
  5. Employee Recognition programmes
  6. Job security
  7. Employee participation
  8. Employee Empowerment

Financial Incentives

  1. Pay and allowances
  2. Productivity linked wage incentives
  3. Bonus
  4. Profit Sharing
  5. Copartnership/ Stock option
  6. Retirement Benefits
  7. Perquisites

Financial Incentives:

Financial incentives are those incentives which are offered in terms of cash. In the context of existing economic system, money has become a means to satisfy the physical needs of daily life and also of obtaining social position and power. Since, money has the purchasing power, it becomes a very important incentive for every individual. The financial incentives generally used in organisations are listed below:

  1. Pay and allowances: For every employee, salary is the basic monetary incentive. It includes basic pay, dearness allowance and other allowances.
  2. Productivity linked wage incentives: In this scheme, wages of employees are linked with their productivity (Piece wage system)
  3. Bonus: It is a kind of yearly payment to employees over and above normal salary. Bonuses may be awarded by a company as an incentive or to reward good performance.
  4. Profit Sharing: In this scheme a part of the profit of a company is shared among the workers in addition to their regular wages. This serves to motivate the employees to improve their performance and contribute to increase in profits.
  5. Co-partnership/ Stock option: Under these incentive schemes, employees are offered company shares at a fixed price which is lower than market price. The allotment of shares creates a feeling of ownership to the employees and makes them to contribute for the growth of the organisation.
  6. Retirement Benefits: Several retirement benefits such as provident fund, pension, and gratuity provide financial security to employees after their retirement. This acts as an incentive when they are in service in the organisation.
  7. Perquisites: In many companies’ perquisites and fringe benefits are offered such as car allowance, housing, medical aid, and education to the children etc., over and above the salary.

Non-Financial Incentives: The incentives which cannot be calculated in terms of money are called non-financial incentives. All the needs of individuals are not satisfied by money alone. Psychological, social and emotional factors also play important role in providing motivation. Non-financial incentives mainly focus on these needs. For example, people working at high job position get satisfied with non-monetary incentives. Some of the important non-financial incentives are discussed below:

  1. Status: In the organisational context, status refers to rank, authority, responsibility, rewards, recognition and prestige of job. Social and esteem needs of an individual are satisfied by status given to their job.
  2. Organisational Climate: Organisational climate indicates the characteristics which describe an organization. It refers to the relation between the superiors and subordinates. Some of these characteristics are–individual autonomy, reward orientation, consideration to employees, risk-tasking etc. If managers take positive measures regarding these aspects, it helps to develop better organisational climate.
  3. Career Advancement Opportunity: Every individual wants to grow to the higher level in the organisation. Managers should provide promotional opportunities to employees. Appropriate skill development programmes, and sound promotion policy will help employees to achieve promotions. Promotion works as a tonic and encourages employees to exhibit improved performance.
  4. Job Enrichment: Employees get bored by performing routine job. Job enrichment is concerned with offering challenging jobs, autonomy to perform job and provide the opportunity for personal growth and a meaningful work experience. If jobs are enriched and made interesting, the job itself becomes a source of motivation to the individual.
  5. Employee Recognition programmes: Most people have a need for evaluation of their work and due recognition. Examples of employees recognition are congratulating employee for good performance, displaying the achievement of employee, giving certificate of achievement, giving momentos, Installing award for best performance etc.
  6. Job security: Employees want their job to be secure. They want certain stability about future income and work. When people feel that they are not likely to lose their jobs, they may become complacent.
  7. Employee participation: It means involving employees in decision making of the issues related to them. Employees follow the decision more sincerely when these are taken in consultation with them. For example if target production fixed by consulting employee then he will try to achieve the target more sincerely.
  8. Employee Empowerment: Empowerment means giving more autonomy and powers to subordinates. Empowerment makes people feel that their jobs are important. This feeling contributes positively to the use of skills and talents in the job performance.


Leadership is another important element of direction. It is the process of influence the behaviour of people at work towards the achievement specific goal. When a manager influences his subordinates to achieve the organizational goal, it is leadership. The leaders always play a key role for the success and excellence of any organisation. Can you imagine Mircrosoft without Bill Gates, Infosys without Narayana Murthy, Tata without J.R.D. Tata, Wipro without Azim Premji or V-Guard without Kochouseph Chittilappilly

Features of leadership

  1. Leadership tries to bring change in behaviour.
  2. Leadership indicates the ability of an individual to influence others.
  3. Leadership indicates interpersonal relations between leaders and followers.
  4. Leadership is exercised to achieve common goals of the organisation.
  5. Leadership is a continuous process.

The term leader emerges from leadership. An individual possessing attributes of leadership is known as leader.

Leader–follower relationship

Many times, the success of an organisation is attributed to the leader, but due credit is not given to the followers. It is said that followers make a person, a good leader by acceptance of leadership. Many followers related factors like – their skills, knowledge, commitment, willingness to cooperate, team spirit etc., make a person an effective leader. Therefore, it is to be recognised that both leader and follower play key role in leadership process.

Importance of Leadership

Leadership is a key factor in making any organisation successful. History reveals that, many times, difference between success and failure of an organisation is leadership. It is aptly mentioned by Stephen Covey, a famous management consultant, that managers are important but leaders are vital for lasting organisational success. A leader not only commits his followers to organisational goals but also pools needed resources, guides and motivates subordinates to reach the goals. The importance of leadership can be discussed from the following benefits to the organisation:

Influences the behaviour of people

Leadership influences the behaviour of people and makes them to positively contribute their energies for the benefit of the organisation. Good leaders always produce goods results through their followers.

Good interpersonal Relations

A leader maintains personal relations and helps followers in fulfilling their needs. He provides needed confidence, support and encouragement and thereby creates friendly work environment.

Facilitates changes in the organisation

Leader plays a key role in introducing required changes in the organisation. He persuades, clarifies and inspires people to accept changes whole-heartedly. Thus, he overcomes the problem of resistance to change and introduces it with minimum frustration.

Resolve conflicts among employees

A leader handles conflicts effectively and does not allow adverse effects resulting from the conflicts. A good leader always allows his followers to ventilate their feelings and disagreement but persuades them by giving suitable clarifications.

Provide training to employees

Leader provides training to their subordinates. A good leader always builds up his successor and helps in smooth succession process.

Qualities of a Good Leader

It assumes that leaders can be distinguished from non-leaders by certain unique traits possessed by them. Following are the essential qualities of a good leader:

Physical features:

Physical features like height, weight, health, appearance determine the physical personality of an individual. It is believed that good physical features attract people. Good health helps a leader to work hard which inspires others to work with same tempo.


A good leader should have required knowledge and competence. Only such person can instruct subordinates correctly and influence them.


A leader should possess high level of integrity and honesty. He should be a role model to others regarding the ethics and values.


A leader should have courage and initiative. He should not wait for opportunities come to his way, rather he should grab the opportunity and use it to the advantage of organisation.

Communication skills:

A leader should be a good communicator. He should have the capacity to clearly explain his ideas and make the people to understand his ideas. He should be a good listener, teacher, counsellor and persuader.

Motivation skills:

A leader should be an effective motivator. He should understand the needs of people and motivate them through satisfying their needs.

Self Confidence:

A leader should have high level of self-confidence. He should not loose his confidence even in most difficult times. In fact, if the leader lacks self-confidence, he cannot provide confidence to his followers.

Social skills:

A leader should be sociable and friendly with his colleagues and followers. He should understand people and maintain good human relations with them.

In fact, it is not possible for any individual to have all the qualities. But an understanding about these qualities help the managers to acquire them through training and conscious efforts.

Leadership Style

There are several bases for classifying leadership styles. The most popular classification of leadership styles is based on the use of authority. Depending on the use of authority, there are three basic styles of leadership:

  1. Autocratic
  2. Democratic, and
  3. Laissez-faire

Autocratic or Authoritarian leader

An autocratic leader exercise complete control over subordinates. An autocratic leader gives orders and expects his subordinates to obey those orders. In this style communication is only one-way with the subordinate.


  1. This leadership style is effective in getting productivity.
  2. Quick decision-making is possible
  3. Complete control over subordinates.

Dis advantages:

  1. This leadership style leads to frustration and low morale among employees.
  2. Motivational level of subordinates goes down
  3. Creativity among the subordinates goes down

A democratic leader

In democratic style leadership, leader takes decisions in consultation and participation with his subordinates. This kind of leadership style is more common now-a-days.


  1. It improves the decision-making ability of subordinates
  2. This style improves the job satisfaction and the morale of employees.

Dis advantages:

  1. Delay in decision making
  2. Consultation with subordinates may be considered as a sign of incompetence on the part of the leader.

Laissez faire or Free-rein leader

In this style of leadership, leaders give his subordinates the complete freedom to take the decisions. Such a leader does not believe in the use of power unless it is absolutely essential. The group members work on their own tasks resolving issues themselves. The manager is there only to support them and supply them the required information to complete the task assigned.


  1. Maximum scope for the development of subordinates.
  2. This style increases the job satisfaction and morale of employees.

Dis advantages:

  1. Subordinate may not get timely support and guidance from leader.
  2. Subordinates may work in different directions and result in disharmony.


Communication plays key role in the success of a manager. How much professional knowledge and intelligence a manager possesses becomes immaterial if he is not able to communicate effectively with his subordinates and create understanding in them. Directing abilities of a manager mainly depend upon his communication skills. That is why organisation always emphasise on improving communication skills of managers as well as employees.

The word communication has been derived from the Latin word ‘communis’ which means ‘common’ which consequently implies common understanding. Communication is a process of exchange of ideas, views, facts, feelings etc. between or among people to create common understanding.

Actually, communication is the process of exchange of information between two or more persons to reach common understanding.

Elements of Communication

Communication process involves elements like source, encoding, media/channel, receiver, decoding, noise and feedback. The elements involved in communication process are explained below:


Sender means person who conveys his thoughts or ideas to the receiver. The sender represents source of communication.


It is the content of ideas, feelings, suggestions, order etc., intended to be communicated. It is the subject matter of communication.


It is the process of converting the message into communication symbols such as words, pictures, gestures etc.,


It is the path through which encoded message is transmitted to receiver. The channel may be in written form, face to face, phone call, Internet etc.


It is the process of converting encoded message into readable language to understand the message to the receiver.


The person who receives communication of the sender and understands the message.


It includes all those actions of receiver indicating that he has received and understood message of sender.


Noise means some obstruction or hindrance to communication. This hindrance may be caused to sender, message or receiver.

Some examples of noise are:

  1. Unclear symbols that lead to faulty encoding.
  2. A poor telephone connection.
  3. An inattentive receiver.
  4. Faulty decoding (attaching wrong meanings to message).
  5. Prejudices obstructing the poor understanding of message.

Importance of Communication

Communication is the foundation of all group activities. It has been estimated that a manager spends 90 percent of his time in communicating-reading, writing, listening, guiding, instructing, approving etc. Effectiveness of a manager depends significantly on his ability to communicate effectively with his superiors, subordinates and external agencies such as bankers, suppliers, union and government. The importance of communication in management can be judged from the following:

Acts as basis of coordination:

Communication acts as basis of coordination. It provides coordination among departments, activities and persons in the organisation. Such coordination is provided by explaining about organisational goals, the mode of their achievement and inter relationships between different individuals etc.

Helps in smooth working of an enterprise:

Communication is the foundation of all group activities. The job of a manager is to coordinate the human and physical elements of an organization to achieve organizational goal.

Acts as basis of decision making:

Communication provides needed information for decision making. In its absence, it may not be possible for the managers to take any meaningful decision.

Increases managerial efficiency:

Communication is essential for quick and effective performance of managerial functions. The management conveys the goals and targets, issues instructions, allocates jobs and responsibilities and looks after the performance of subordinates. The role of communication important in all these aspects.

Promotes cooperation and industrial peace:

Efficient operation of an organization is possible only when there is industrial peace in the factory and mutual cooperation between management and workers. The two-way communication promotes cooperation and mutual understanding between the management and workers

Establishes effective leadership:

Communication is the basis of leadership. Effective communication helps to influence subordinates.

Boosts morale and provides motivation:

An efficient system of communication enables management to motivate, influence and satisfy the subordinates. Communication helps to boost morale of employees and managers.

Formal and Informal Communication

Communication taking place within an organisation may be broadly classified as formal and informal communication.

Formal Communication

Formal communication flows through official channels designed in the organisation chart. This communication may take place between a superior and subordinate, a subordinate and superior or among same cadre employees or managers. The communications may be oral or written but generally recorded and filed in the office.

Formal communication may be further classified

  1. Vertical Communication
  2. Horizontal Communication

Vertical communication flows vertically i.e., upwards or downwards through formal channels. Upward communications refer to flow of communication from subordinate to superior whereas downward communication indicates communication from a superior to subordinate.

Example: – The examples of upward communication are – application for grant of leave, submission of progress report, request for grants etc.

Example: Examples of downward communication are – sending notice to employees to attend a meeting, ordering subordinates to complete an assigned work, passing on guidelines framed by top management to the subordinates etc.

Horizontal or lateral communication takes place between one division and another. For example, a production manager may contact marketing manager to discuss about schedule of product delivery, product design, quality etc.

Different types of communication networks may operate in formal organisation. Some of the popular communication networks are presented and discussed in given figure.

Single chain:

This network exists between a supervisor and his subordinates. Since many levels exist in an organisation structure, communication flows from every superior to his subordinate through single chain.


In wheel network, all subordinates under one superior communicate through him only as he acts as a hub of the wheel. The subordinates are not allowed to talk among themselves.


In circular network, the communication moves in a circle. Each person can communicate with his adjoining two persons. In this network, communication flow is slow.

Free flow:

In this network, each person can communicate with others freely. The flow of communication is fast in this network.

Inverted V:

In this network, a subordinate is allowed to communicate with his immediate superior as well as his superiors superior. However, in later case, only prescribed communication takes place.

Informal Communication

Communication that takes place without following the formal lines of communication is said to be informal communication. It is the communication between people of an organization on the basis of their social relations.

Informal communication is also called ‘grapevine’ because the origin and direction of this information transferred is not easy to locate as in case of a vineyard. There is no fixed direction and for the flow of information under informal communication. The informal communication arises out of needs of employees to exchange their views, which cannot be done through formal channels.

Example: Workers chit chating in a canteen about the behaviour of the superior, discussing about rumours that some employees are likely to be transferred are some examples of informal communications.

Sometimes, grapevine channels may be helpful as they carry information rapidly and, therefore, may be useful to the manager at times. Informal channels are used by the

managers to transmit information so as to know the reactions of his/her subordinates. An intelligent manager should make use of positive aspects of informal channels and minimise negative aspects of this channel of communication.

Different Types of Grapevine Network (Informal Communication)

  1. Gossip:

In gossip network, one person tells many. Here one person communicates with all on non- selective basis.

Single Stand Network

In single stand pattern each individual communicates to the other in sequence.

Probability Network

In probability network the individual communicates randomly with other individuals.

Cluster Network

In cluster, the individual communicates with only those people whom he trusts. Of these four types of networks, cluster is the most popular in organisations.

Barriers to Communication

Communication barriers are the factors that obstruct the effectiveness of communication. Sometimes message sent by the sender does not match the receiver in the same manner as expected by the sender. These barriers may prevent a communication or filter part of it or carry incorrect meaning due to which misunderstandings may be created. The barriers to communication in the organisations can be broadly grouped as:

  1. Semantic barriers
  2. Psychological barriers
  3. Organisational barriers
  4. Personal barriers.

Semantic barriers

These are concerned with the meaning of words and symbols. Sometimes the same words and symbols can be understood differently by different people in the organization. These are discussed below:

Badly expressed message

Sometimes intended meaning may not be conveyed by a manager to his subordinates. This is due to inadequate vocabulary, usage of wrong words, omission of needed words etc.

Symbols with different meanings

A word may have several meanings. Receiver has to perceive one such meaning for the word used by communicator. Example-Prize, price, right, write etc.

Faulty translations

Sometimes the communications originally drafted in one language (e.g., English) need to be translated to the language understandable to workers (e.g., Hindi). If the translator is not an expert, he may make mistake in translation.

Unclarified assumptions

Some communications may have certain assumptions which are subject to different interpretations.

For example, a boss may instruct his subordinate, “Take care of our guest”. There is no clarity in this instruction. [Boss may mean that subordinate should take care of transport, food, accommodation of the guest until he leaves the place. The subordinate may interpret that guest should be taken to hotel with care. Actually, the guest suffers due to these unclarified assumptions.]

Technical jargon

It is usually found that specialists use technical words while explaining to persons who are not specialists in the concerned field. Therefore, they may not understand the actual meaning of many such words.

Body language and gesture decoding

Every movement of body communicates some meaning. The body movement and gestures of communicator matters so much in conveying the message. If there is no match between what is said and what is expressed in body movements, communications may be wrongly conveyed.

Psychological barriers

Emotional or psychological factors acts as barriers to communicators. For example, a worried person cannot communicate properly and an angry receiver cannot understand the real meaning of message. The state of mind of both sender and receiver of communication reflects in the effective communication. Some of the psychological barriers are:

Premature evaluation

Sometimes people evaluate the meaning of message before the sender completes his message. Such premature evaluation may be due to pre-conceived notions or prejudices against the communication.

Lack of attention

The pre-occupied mind of receiver and the resultant non-listening of message acts as a major psychological barrier. For instance, an employee explains about his problems to the boss who

is pre-occupied with an important file before him. The boss does not grasp the message and the employee is disappointed.

Loss by transmission and poor retention

When communication passes through various levels, successive transmissions of the message results in loss of, or transmission of inaccurate information. This is more so in case of oral communication. Usually people cannot retain the information for a long time if they are inattentive or not interested.


Distrust between communicator and communicate acts as a barrier. If the parties do not believe each other, they cannot understand each other’s message in its original sense.

Organisational barriers

The factors related to organisation structure, authority relationships, rules and regulations may, sometimes, act as barriers to effective communication. Some of these barriers are:

Organisational policy

If the organisational policy is not supportive to free flow of communication, it may hamper effectiveness of communications.

For example, in an organisation with highly centralised pattern, people may not be encouraged to have free communication.

Rules and regulations

Rigid rules and huge procedures may be a hurdle to communication. Similarly, communications through prescribed channel may result in delays.


Status of superior may create psychological distance between him and his subordinates. A status conscious manager also may not allow his subordinates to express their feelings freely.

Complexity in organisation structure

In an organisation where there are number of managerial levels, communication gets delayed and distorted as number of filtering points are more.

Organisational facilities

If facilities for smooth, clear and timely communications are not provided communications may be hampered. Facilities like frequent meetings, suggestion box, complaint box, social and cultural gathering, transparency in operations etc., will encourage free flow of communication. Lack of these facilities may create communication problems.

Personal barriers:

The personal factors of both sender and receiver may exert influence on effective communication. Some of the personal barriers of superiors and subordinates are mentioned below:

Fear of challenge to authority

If a superior perceives that a particular communication may adversely affect his authority, he or she may withhold or suppress such communication.

Lack of confidence of superior on his subordinates

If superiors do not have confidence on the competency of their subordinates, they may not seek their advice or opinions.

Unwillingness to communicate

Sometimes, subordinates may not be prepared to communicate with their superiors, if they perceive that it may adversely affect their interests.

Lack of proper incentives

If there is no motivation or incentive for communication, subordinates may not take initiative to communicate. For example, if there is no reward or appreciation for a good suggestion, the subordinates may not be willing to offer useful suggestions.

Improving Communication Effectiveness

The barriers to effective communication exist in all organisations to a greater or lesser degree. Organisations should adopt suitable measures to overcome the barriers and improve communication effectiveness. Some such measures:

Clarify the ideas before communication

The message to be communicated must be absolutely clear in the mind of the sender. The entire problem should be studied in depth, analysed and stated in such a manner that is clearly conveyed to subordinates.

Communicate according to the needs of receiver

The level of understanding of receiver should be crystal clear to the communicator. Manager should adjust his communication according to the education and understanding levels of subordinates.

Consult others before communicating

Before actually communicating the message, it is advisable to consult others. If plans are developed after due consultation and involvement of subordinates, they will accept it with full cooperation.

Be aware of languages, tone and content of message

The contents of the message, tone, language used, manner in which the message is to be communicated are the important aspects of effective communication. The language used should be understandable to the receiver and should not offend the sentiments of listeners. The message should be stimulating to evoke response from the listeners.

Convey things of help and value to listeners

While conveying message to others, it is better to know the interests and needs of the people with whom you are communicating. If the message directly or indirectly relates to such interests, it will certainly attract response from communicatee.

Ensure proper feedback

Communication process is incomplete unless the feedback is received from the receiver. This will cause the receiver to become more responsive.

Communicate for present as well as future

Communication process must meet the needs of present as well as future requirements of the organization. This is possible only through consistency in the present and future communication.

Follow up communications

There should be regular follow up and review on the instructions given to subordinates. Such follow up measures help in removing hurdles if any in implementing the instructions.

Be a good listener

Manager should be a good listener. Patient and attentive listening solves half of the problems. Managers should also give indications of their interest in listening to their subordinates.

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