CBSE Class 12 Business Studies: Directing NCERT Solutions

Reviewed by NCERT Help Editorial Team · Updated on 29 Jul 2026

NCERT Solutions PDF Class 12 PDF

This chapter, "Directing," for CBSE Class 12 Business Studies, delves into a crucial managerial function. The NCERT Solutions provided cover key concepts such as informal communication, often referred to as the 'grapevine,' and its characteristics. It also explores different leadership styles, focusing on the 'Laissez Faire' or free-rein approach where power is used minimally. Furthermore, the solutions explain the communication process, specifically the 'encoding' step, where messages are converted into symbols. A significant focus is placed on 'motivation' as a directing element, detailing how supervisors can address employee unwillingness to work by identifying needs and employing financial or non-financial incentives. These solutions are designed to help students grasp these fundamental principles of management and prepare effectively for their examinations by offering clear explanations and practical examples.

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Quick info

Board	CBSE
Class	Class 12
Subject	Business Studies
Session	2026
Language	English
Type	NCERT Solutions
Chapter	Chapter 7

Chapter summary

Chapter 7, "Directing," of the CBSE Class 12 Business Studies syllabus focuses on the managerial function of guiding and influencing employees. The NCERT Solutions cover the nature of informal communication (grapevine), the characteristics of a Laissez Faire leadership style, and the encoding process in communication. A key aspect discussed is motivation, explaining its importance in overcoming employee reluctance and ensuring organizational goals are met through appropriate incentives.

Learning outcomes

Understand the concept and characteristics of informal communication (grapevine).
Identify and explain the Laissez Faire leadership style.
Define and explain the encoding process in the communication cycle.
Recognize the importance of motivation as a directing element.
Analyze how to motivate employees to overcome unwillingness to work.

Topics covered

Paper topics

Directing Function of Management
Informal Communication
Grapevine Communication
Leadership Styles
Laissez Faire Leadership
Communication Process
Encoding in Communication
Motivation
Financial Incentives
Non-Financial Incentives
Employee Performance
Organizational Goals

Important topics

Informal Communication (Grapevine)
Laissez Faire Leadership Style
Motivation as a Directing Element
Encoding Process
Financial and Non-Financial Incentives

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Questions and Solutions

Question 1

What is informal communication?

Solution: Informal communication refers to the communication that flows within an organization without following the officially defined channels or hierarchy. This system is commonly known as the 'grapevine'. In informal communication, information can spread in any direction, irrespective of the levels of authority. It emerges from the social interactions among employees and can take the form of rumours or gossip. For instance, a discussion among colleagues during a lunch break about a senior's behaviour is an example of informal communication. It is often challenging to pinpoint the original source of such information, and the message itself might get distorted as it spreads.

Question 2

Which style of leadership does not believe in use of power unless it is absolutely essential?

Solution: The leadership style that minimally believes in the use of power, only resorting to it when absolutely essential, is the Laissez Faire or free-rein leadership style. In this approach, the leader grants a high degree of autonomy and freedom to subordinates, allowing them to make decisions independently. There is a significant decentralization of authority, and subordinates are encouraged to manage their own tasks and responsibilities.

Question 3

Which element in the communication process involves converting the message into words, symbols, gestures etc.?

Solution: The element in the communication process that involves converting the message into words, symbols, gestures, or other forms is called Encoding. Encoding is the first step where the sender conceptualizes the message and translates it into a communicable form. This could involve choosing specific words, creating gestures, drawing pictures, or using other symbols to represent the intended meaning before transmitting it.

Question 4

The workers always try to show their inability when any new work is given to them. They are always unwilling to take up any kind of work. Due to sudden rise in demand a firm wants to meet excess orders. The supervisor is finding it difficult to cope up with the situation. State the element of directing that can help the supervisor in handling the problem.

Solution: In this scenario, the key element of directing that can help the supervisor is Motivation. The workers' unwillingness to take up new tasks indicates a lack of motivation. The supervisor needs to identify the underlying reasons for this reluctance, such as unmet needs or dissatisfaction. By understanding these needs, the supervisor can then employ various motivational techniques. These can include financial incentives, such as offering bonuses or profit-sharing schemes, or non-financial incentives, like enriching job roles, providing opportunities for growth, or offering recognition and appreciation, to encourage employees to perform effectively and meet the increased demand.

Common mistakes

Confusing informal communication with formal communication channels.
Misinterpreting the role of power in different leadership styles.
Not clearly distinguishing between the different elements of the communication process.
Failing to identify appropriate motivational techniques for specific employee issues.

Revision tips

Review the definitions and examples of informal communication and the grapevine.
Compare and contrast different leadership styles, focusing on the Laissez Faire approach.
Understand the sequence of the communication process, particularly the encoding step.
Identify various financial and non-financial incentives used for employee motivation.

Practice MCQs

Q1. What is the alternative name for informal communication?

Q2. Which leadership style involves minimal use of power?

Q3. The process of converting a message into words, symbols, or gestures is called:

Q4. When employees are unwilling to take up new work, what directing element is most crucial?

Q5. Which of the following is an example of informal communication?

Frequently asked questions

What is informal communication in Business Studies?

Informal communication, also known as the grapevine, is communication that flows freely in any direction within an organization, without adhering to the formal organizational structure or hierarchy. It often arises from social interactions among employees.

What is the Laissez Faire leadership style?

The Laissez Faire leadership style, also called free-rein leadership, is one where the leader delegates most of the authority and decision-making power to subordinates, intervening only when absolutely necessary.

What does 'encoding' mean in the context of communication?

Encoding is the process in communication where the sender converts their thoughts, ideas, or messages into words, symbols, gestures, or pictures that can be understood by the receiver.

Why is motivation important in the directing function?

Motivation is crucial in directing because it involves influencing employees to perform to the best of their abilities. It helps overcome issues like unwillingness to work and ensures that organizational objectives are achieved.

How can a supervisor motivate unwilling employees?

A supervisor can motivate unwilling employees by identifying the root cause of their reluctance and then using appropriate financial incentives (like bonuses) or non-financial incentives (like job enrichment or recognition) to encourage them.

What is the difference between formal and informal communication?

Formal communication follows the official chain of command and established channels, while informal communication (grapevine) is spontaneous, arises from social interactions, and does not follow any predefined path.

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