Thursday, February 12, 2026

CBSE Class 12th Business Studies Revision Notes - N7

Free Business Studies - Class 12th (CBSE) - Revision Notes - N7 - Directing


Directing 

Directing function of management is concerned with instructing, guiding, inspiring, coaching, leading and motivating the employees in the organization so that their efforts result in the achievement of organizational goals.
  
Directing is telling people what to do and seeing that they do it to the best of their ability.

Features / Characteristics of Directing   ( C.L.I.P/F )

  1. Directing is a Continuous Function
  2. Directing takes place at every Level of Management 
  3. Directing Initiates Actions
  4. Directing is Performance Oriented 
  5. Directing Flows from Top to Bottom
Directing is a Continuous Function

Directing is a continuous process. A manager cannot just rest after issuing orders and instructions. He has to continuously guide, supervise and motivate his subordinates. He must continuously take steps to make sure that orders and instructions are carried out properly.

Directing takes place at every Level of Managemen

Directing is a pervasive function as it is performed by managers at all levels and in all locations. The directing takes place wherever superior-subordinate relation exists. Every manager has to supervise, guide, motivate and communicate with his subordinate to get things done.

Directing Initiates Actions 

Other functions prepare a base or setting of action, i.e., how action has to be carried on , the directing initiate or start action. By giving directions or instructions the managers get the work started in the organization. 

Directing is Performance Oriented

Directing is a performance-oriented function. The main motive of directing is bringing efficiency in performance. Directing function direct the performance of individuals towards the achievement of organizational goal.  

Directing Flows from Top to Bottom

Directing is first initiated at the top level and flows to the bottom through organizational hierarchy.  Every manager can direct his immediate subordinate and take directions from immediate boss.  Directing starts from the top level and flows to lower level.   

Importance of Directing Function  ( Directing is heart of management process ) 

1) To Initiate Action : The employees in the organization start working only when they get instructions and directions from their superiors. For example : If a supervisor guides his subordinates and clarifies their doubts while performing a task, it will help the worker to achieve the work targets given to him. 

2) To Integrate Employees' Efforts : Directing integrates employees' efforts in the organization in such a way that every individual effort contributes to organizational performance. Thus, it ensures that the individuals work for organizational goals. For example : A manager with good leadership abilities will be in a position to convince the employees working under him that individual efforts and team effort will lead to the achievement of organizational goals.  

3) Means of Motivation / Guides Employees : Directing function does not mean giving orders only but through directions and instructions the superiors try to motivate the employees to perform to their best ability. Directing guides employees to fully realize their potential and capabilities by motivating and providing effective leadership. A good leader can always identify the potential of his employees and motivate them to extract work up to their full potential. 

4) To Facilitate Change : Directing facilitates the introduction of needed changes in the organization. Generally, people have a tendency to resist changes in the organization. Directing through motivation, communication and leadership helps to reduce such resistance and develop the required cooperation in introducing changes in the organization. For example : If a manager wants to introduce a new system of accounting, there may be initial resistance from the accounting staff. But, if manager explains the purpose, provides training and motivates them with additional rewards, the employees may accept change and cooperate with the manager.
 
5) Bring Stability and Balance in the Organization : Effective directing helps to bring stability and balance in the organization since it fosters cooperation and commitment among the people. It helps to achieve balance among various groups, activities and the departments. 


Elements of Directing


1. Supervision 

Supervision means instructing, guiding, monitoring and observing the employees while they are performing jobs in the organization. It is the process of guiding the efforts of employees and other resources to accomplish the desired objectives. It means overseeing what is being done by subordinates and giving instructions to ensure the optimum utilization of resources and achievement of work targets. It is a managerial position in the organization hierarchy at the operative level i.e., immediately above the worker.


2. Motivation (Will to Work) 

 Motivation can be defined as stimulating, inspiring and inducing employees to perform to their best capacity. Motivation is a psychological term which means it cannot be forced on employees. It comes automatically from inside the employees as it is a willingness to do work.  


3. Communication

Communication can be defined as the transmission or exchange of ideas, views, messages, information, facts, feelings etc. between two or more persons by different means to create a common understanding. Communication is a two-way process as it begins with the sender and ends when the feedback comes from the receiver to the sender. A minimum of two parties are involved in the process of communication, i.e., the sender and the receiver.


4. Leadership

Leadership is the art or process of influencing the behavior of people so that they will strive willingly and enthusiastically towards the achievement of group goals.   


Communication

Steps in the Process of Communication 


The communication process begins when the sender thinks of an idea or message to be conveyed to the other person. 


Sender : Sender is a person who conveys the message. The communication process begins immediately when the idea comes into the mind of the sender. 

Message : The content of ideas or message suggestions that the sender wants to share with the receiver is called a message. 

Encoding : The receiver cannot read the mind of the sender. So, the receiver converted the idea into language or other communication symbols such as pictures, gestures, etc. This is known as encoding. 

Media : It is the way or means through which an encoded message is transmitted to the receiver. The common ways of transmission are phone, letter, internet, etc. 

Decoding : It refers to converting the encoded message into language and understanding the message.

Receiver : A receiver is a person who receives the communication and understands the message.

Feedback : After understanding the message the receiver sends his response to that idea or message to the sender. When the response reaches the sender then only the communication process ends. 
 
Noise : Noise means some obstruction or hindrance to communication. This hindrance may be caused to the sender, message or receiver. 
Some examples of noise are : 
a) A poor telephone connection. 
b) An inattentive receiver. 
c) Faulty decoding (attaching wrong meaning to message).

Forms of Organizational Communication


Formal Communication 

Formal communication refers to official communication taking place in the organization. The exchange of views or messages or information related to official matters such as the assignment of tasks, fixing of responsibilities, setting up of targets, objectives, etc. is known as formal communication. Under formal communication, verbal or oral channels are avoided and communication generally takes place in written form such as the issue of notice, letter, memo, and document.    

Types of Formal Communication 

Downward Communication  - The flow of information from the top level or the superiors to the lower level or subordinates is known as downward communication. It includes passing instructions from superiors to subordinates related to the organization.

Upward Communication -  When subordinates pass any information to superiors then it is known as upward communication. Upward communication generally consists of work performance, opinions, grievances and problems with the employees.

Horizontal Communication - The communication between two or more persons working at the same level of authority. Generally different departmental heads discuss the policy of their department with each other.

Diagonal Communication - Diagonal communication is a flow of information between the persons working in different departments and holding different levels of authority.  For example : The salesman may request the production manager to modify the product design according to the requirement of the customer.

Common Networks of Formal Communication


Wheel Pattern  
  • It is the most centralized way of communication. 
  • Under this pattern, all the information flows from one person only who is generally the leader of the group. 
  • The other members have no communication link with each other. 
  • It is the common pattern of centralised organisation.
Chain Pattern
  • Under the chain pattern, each person gets the information from one person that is their immediate boss and passes the information to one person who is their immediate subordinate. 
  • So, every member is attached to one person.  
Circular Pattern
  • In the circle pattern, each person communicates with two more people in a group. 
  • The person may receive or give information to two more people in the organization. 
  • Under this type of organization, every member participates equally in the flow of information which is why it is more decentralised.   
All Sources (Channel) Pattern / Free Flow 
  •  Under this pattern, there is no fixed pattern of communication. 
  • All the members in the organization are linked to each other and information can flow from anywhere in the organization. 
  • It is the most decentralised organisation. 
Inverted V
  • Under this network, a subordinate is allowed to communicate with his immediate superior and also with the superior of his superior. 
  • However, in the latter case, only limited communication can take place. 

Thursday, February 5, 2026

CBSE Class 11th Business Studies Test - t4a

Free Business Studies - Class 11th (CBSE) - Test - t4a - Business Services

Time1 hour                                                                                                                               Marks40

Q1. Which Banking Service permits withdrawal of money more than the balance in the account?
  1. Saving Account
  2. Barker’s Cheque
  3. Bank Overdraft
  4. Fixed Deposit Account
Q2. Insurable interest must exist at the time of loss, but may be absent at the time of taking the policy, only in case of
  1. Life Insurance
  2. Fire Insurance
  3. Marine Insurance
  4. All of the above
Q3. "It is the duty of the insured to take preventive measures to minimize the loss of the property." Identify the principle of insurance in the given picture.
Image to suggest for class 11th students
  1. Mitigation of loss
  2. Subrogation
  3. Proximate cause
  4. Indemnity
Q4. Without disclosing that he is suffering from TB, Mr. A gets himself insured against death for ₹10,00,000. He lives for another 3-4 years and dies due to TB. The Insurance company came to know about Mr. A’s illness only after his death. Now, under these circumstances, the insurance company is not liable to pay anything to the dependents of Mr. A, as the contract between the insurance company and Mr. A is void.
Identify the principle of insurance to which the above example relates:
  1. Utmost Good Faith
  2. Insurable Interest
  3. Indemnity
  4. Subrogation
Q5. The charge by the insurer on account of providing services is called _____________.
  1. Profit
  2. Dividend
  3. Premium
  4. Installment
Q6. The person or firm who gets compensation through the insurance policy is called
  1. Insured
  2. Insurer
  3. Premium
  4. None of these
Q7. Mr. Rohan is the owner of a factory engaged in manufacturing crackers. He insured his factory against fire. While taking the insurance policy, he did not disclose the product being manufactured, as this would have led to paying a much higher premium. Once the factory was severely damaged by fire, but the Insurance Company refused to accept his claim. He filed a case against the company. The court favoured the Insurance Company on the ground that Mr. Rohan had not revealed the fact related to the type of product being manufactured. So, the contract of insurance is voidable at the discretion of the insurer.
Which principle of insurance has been violated by Mr. Rohan?
  1. Principle of Indemnity
  2. Principle of Utmost Good Faith
  3. Principle of Proximate Cause
  4. All of these
Q8. Banker's cheque is also known as ____________.
  1. Bank Draft
  2. Pay Order
  3. EFT
  4. USSD
Q9. The purpose of insurance is to bring the insured to the same financial position as he was before the loss. This is related to
  1. Principle of indemnity
  2. Principle of causa proxima
  3. Principle of utmost good faith
  4. Principle of insurable interest
Q10. Which principle of insurance lays down that the cause for the loss must be related to the subject matter of the insurance contract?
  1. Principle of Utmost Good Faith
  2. Principle of Indemnity
  3. Principle of Causa Proxima
  4. Principle of Mitigation of Loss
Q11. Write the difference between Insurance and Assurance.
Q12. Why is life insurance considered a contract of assurance?
Q13. Sikha is running a general store. The store was insured against natural disasters like flood, earthquake, and theft with Hindustan General Insurance Company for the amount of ₹50 lakh. Heavy rain in the city caused massive floods, and the store was looted by people, which was caught on CCTV. She filed the store insurance claim with the insurance company for the loss of ₹13 lakh for the material and furniture spoiled, and also ₹25 lakh for food and stock due to flood damage. The insurance company refused to accept the claim for ₹25 lakh as the flood damage occurred due to a natural disaster. Sikha argued that she is paying a premium only for ₹50 lakh, and the CCTV footage accepted the claim of ₹13 lakh. Sikha argued that the fundamental principle of insurance should be to pay the full claim of ₹43 lakh.
What is the principle of insurance to which the above example relates?
Q14. Mr. Ramanan hides a particular disease of his health from the insurance company. While getting his life insurance done, he was not truthful about his disease. Explain the concept of insurance to which the above example is related.
Q15. Two friends Mr. Narayan Mishra and Mr. Govind Rai got different types of Insurance policies done. Mr. Narayan Mishra got his house insured for ₹50,00,000 by ‘New India Insurance Company’. The Company thought that there was a great risk involved in it. It got the insurance for ₹30,00,000 out of it done by ‘National Insurance Company’. After some days there was an Earthquake and Mr. Mishra’s house was completely destroyed. ‘New India Insurance Company’ made the full payment of ₹50,00,000 to Mr. Mishra. Now ‘New India Insurance Company’ gets the payment of ₹30,00,000 from ‘National Insurance Company’. In this way, the first company (New India Insurance Company) got its risks reduced.
The other friend, Mr. Govind Rai got his life insured by ‘Reliance Life Insurance Company Ltd.’, and Life Insurance Corporation of India for ₹10,000 and ₹5,00,000 respectively. He survived up to the end of the fixed period.
  1. Identify the two types of insurance contracts entered into by both the friends in the above paragraph.
  2. Identify and explain the type of insurance is indicated in the insurance contract done by Mr. Narayan Mishra.
  3. Identify and explain the type of insurance contract is indicated in Mr. Govind Rai’s insurance contract in which two insurance companies are involved?

Q16. Chirag got his pen manufacturing factory insured against fire. His factory caught fire and some of his employees took advantages of the situation and stole stock of pens. Chirag made a claim of damages caused by fire including loss due to pens being stolen. The insurance company agreed to pay damages caused by fire only. It refused to pay for loss caused by stolen pens on the ground that loss by theft was a remote cause and not proximate one.

  1. What does principle of Cause Proxima State?
  2. Give the names and nature of two causes resulting in losses for Mr. Chirag.
  3. Is Mr. Chirag right in claiming loss due to stole pens?

Q17. Write a detailed note on various facilities offered by Indian Postal Department.

The End