CAIIB ABFM Module A Unit 5 : Directing

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Oct 4

CAIIB Paper 3 ABFM Module A Unit 5 : Directing (New Syllabus)

IIBF has released the New Syllabus Exam Pattern for CAIIB Exam 2023. Following the format of the current exam, CAIIB 2023 will have now four papers. The CAIIB Paper 3 (ADVANCED BUSINESS & FINANCIAL MANAGEMENT) includes an important topic called "Directing". Every candidate who are appearing for the CAIIB Certification Examination 2023 must understand each unit included in the syllabus.

In this article, we are going to cover all the necessary details of CAIIB Paper 3 (ABFM) Module A (THE MANAGEMENT PROCESS) Unit 5 : Directing, Aspirants must go through this article to better understand the topic, Directing and practice using our Online Mock Test Series to strengthen their knowledge of Directing. Unit 5 : Directing

Directing

Directing is an important function as people, working in the organisation, are guided, motivated, counselled, supervised, and led towards the achievement of organisation's goals through the practice of directing.

Characteristics

The initiator of action: In order to fulfil their responsibilities inside the organisation, managers are responsible for functions such as planning, staffing, organising, and controlling, in addition to guiding. While other verbs prepare the ground for action, "directing" actually gets things moving.
All-encompassing function: Direction is present at every level of an organisation when there is a hierarchy of superiors and subordinates. This means that guidance is always present. Every manager is responsible for supplying his staff with direction and inspiration.
Constantly occurring activity: It is considered a continuous function since it continues even after new managers or employees have been hired or removed from their positions within the firm.
Descending order of hierarchical structure: The process of guiding flows down from higher levels of management to lower levels of management. Every manager is responsible for performing this role for his or her own immediate subordinate.
The human factor: Directing is a crucial role since it ensures that the work is completed by the employees, and contributes to the expansion of the firm.

Elements of Directing

Leadership

The term "leadership" refers to both a set of behaviours and a set of attributes that can be acquired through training and development respectively. Leadership is the process of inspiring other people to work toward a common goal and organising their resources to make that objective a reality.

Importance of Leadership

Begins or starts the action: The responsibility of instruction is the activity that determines where each subordinate's workday actually begins. It is from this role that action is taken, and subordinates comprehend their work and perform it in accordance with the instructions that have been provided.
Co-ordinates efforts: Directing subordinates at work enables supervisors to advise, motivate, and instruct them to do their assigned tasks. Only by following the instructions will each department's efforts be able to be linked and linked to the efforts of the other departments. The integration of efforts is going to bring about efficiency and uniformity in the way that concerns are handled.
Provides motivation: Having a sense of direction is beneficial to the achievement of one's goals. The purpose of a manager is to improve the performance of their subordinates by providing incentives or compensation, whether this would be monetary or non-monetary, and this can act as a morale booster for their subordinates as well as help in development.
Helps maintain equilibrium: Stability and balance, which become highly crucial for the long-term sustainability of demand may be brought about by the management with the assistance of four instruments or elements of direction function:
A strategic combination of compelling leadership qualities
Communication that is clear and concise
Strict oversight
Efficient and effective motivation.
Adapts to changing circumstances: The ability to adapt lets a company withstand the planned growth and become the market leader despite the constantly shifting environment. That is the directing function that is utilised in order to accomplish the changes that are produced in the environment, both inside and outside.
Makes effective use of available resources: The only way that resources may be used effectively is if there is a minimal amount of waste, duplication of efforts, overlap of performance, etc. When a manager uses his talents in supervision, guiding, directing, and motivation in order to motivate subordinates, the function of subordinates becomes clearer as a result.

Leadership Roles And Responsibilities

Direction at all levels: It is critical to secure cooperation in the process of formulating plans and policies. It is necessary for the understanding and execution of plans and programmes developed by the top management at the intermediate and lower levels of the organisation.
Representative of the Organisation: The leader or manager of the business is the enterprise's representative and is responsible for doing things like representing the concern at meetings, conferences, and other events.
Helping Integration and Reconciliation of Personal Goals with Business Goals: The goal of a leader is to direct the activities of their followers toward the achievement of shared goals, and they do this by coordinating those efforts.
Garners support: A leader is someone who manages others and, in addition to that, he is someone who encourages the support and collaboration of subordinates and entertains them.
Acts as Friend, Philosopher and Guide: A good leader should have these three characteristics. He can also be a friend to his subordinates by being open and honest about his emotions, ideas, and desires with them. He can play the role of a philosopher by drawing on his intellect and life experiences to provide direction to the employees in times of crisis. Sometimes, he will also play the part of a counsellor, both from the perspective of providing therapy and of finding solutions to problems.

Leadership Qualities

Outward Look
Vision and foresight
Intelligence
Capabilities in Communication
Objective approach free from bias
Knowledge of work
Sense of responsibility
Self-confidence and the ability to exert one's will
Humanist

Leadership Models

Authoritarian Leadership

An authoritarian leadership style is described as being as leaders behavior that asserts absolute authority and control over subordinates and demands unquestionable obedience from subordinate.
Creativity would suffer as a result of limited input from the team if this method is implemented, despite the fact that it is effective in a short period of time.
Leadership methods based on authoritarianism are utilised whenever the members of a team require guidance.

Advantages of the authoritarian leadership style

It is possible to cut down on the amount of time needed to reach an important conclusion.
It is possible to clear the command chain and punctuate.
The amount of repetition that occurs during the execution of the plans can be reduced.
Implementing an authoritarian paradigm of leadership lead to the production of consistent results.

Disadvantages of the authoritarian leadership style

Management style that is overly authoritarian might provoke discontent among workers.
By utilising this paradigm, you run the risk of stifling the originality and innovation of your workforce.
It is detrimental to the coordination and cooperation of the group.
The amount of input from the group stands severely cut back.
The utilisation of this model significantly contributes to an increase in the employee turnover rate.

Participative Leadership

It is a style of leadership in which all members of the organization work together to make decisions. Participative leadership is also known as democratic leadership

Advantages of the participative leadership style:

The inspiration of workers and the gratification they got from their jobs rose.
It allows for a more efficient utilisation of the employees' creative potential.
It assists in the development of powerful teams.
It is possible to achieve high levels of productivity.

Disadvantages of the participative leadership style:

The process of making decisions takes some time.
Leaders are more inclined to apologise to their employees than employees themselves.
There would on occasion be problems with communication.
Because of the openness with which information is shared, potential security problems may emerge.
If staff lack the necessary skills, poor decisions may be made.

Delegative Leadership

The delegative leadership style, also known as the 'laissez-faire' leadership style, is an approach that gives subordinates the power to make most of the decisions regarding their day-to-day activities.
This strategy has the potential to be successful provided the members of the team are knowledgeable, willing to accept responsibility, and like the opportunity to work on their own.

Advantages of the delegative leadership style:

Employees with more experience are eligible for perks that are determined by their level of experience and credentials.
The originality of the concepts and the inventiveness are very much appreciated.
A productive working atmosphere that is the result of leadership that emphasizes delegation.

Disadvantages of the delegative leadership style

There is a lack of clarity regarding command accountability.
The representative leadership struggled to adjust to the changes that were occurring.

Transactional Leadership

Transactional leadership, also known as managerial leadership, is a leadership style where leaders rely on rewards and punishments to achieve optimal job performance from their subordinates.
Transactions between a leader and his followers, including incentives, admonition, and other commutations, are utilised by the transactional leadership model to accomplish the goal of getting the work done.
The leader makes sure that everyone is aware of the objectives, and everyone on the team is aware of how they will be rewarded for meeting the requirements. This type of giving and taking is more concerned with adhering to existing routines and procedures in an accomplished manner.

Advantages of the Transactional leadership style:

Time-bound, measurable, and detailed objectives that are within the employees' reach, which have been developed by the leaders.
Enhanced levels of motivation and output from staff members.
It can oust chaos in the chain of command or at least bring it to a manageable level.
The utilisation of this model results in the production of a system that is simple for managers to put into action and straightforward for workers to adhere to.
Employees have the ability to choose their own reward system.

Disadvantages of the Transactional leadership style:

There is a possibility of inhibiting inventiveness and creativeness.
Having empathy does not add any value.
It fosters the development of more followers than leaders among the workforce.

Transformational Leadership

It is a management philosophy that encourages and inspires employees to innovate and develop new ways to grow and improve the path to a company's future success. It's a management style that's designed to give employees more room to be creative, look to the future, and find new solutions to old problems.
the leader inspires his or her followers by providing them with a clear vision, and then the leader encourages and empowers the followers to work toward achieving the goal. The leader is also responsible for serving as an example of the vision.

Advantages of the Transformational leadership style

A decrease in the number of employees who leave their jobs as a result of utilising this methodology.
A strong emphasis by the transformational leadership on the importance of the business vision.
When utilising this technique, you will see that your employees have a good morale.
It uses several methods of motivation and inspiration in order to gain the support of the personnel.
This style to leadership is not one of compulsiveness.
The transformational leadership style places a high priority on the interaction between parties.

Disadvantages of the Transformational leadership style

It is possible for leaders to lie to their employees.
It's possible that you'll need continuous encouragement and continuous feedback.
The work cannot move further until the staff give their approval.
It has the potential to sometimes lead to a divergence of protocols and principles.

Motivation

The word "motivation" is derived from the Latin word "motive," which can be translated as "necessity," "incline," or "drive" within a person. People are motivated to take action so that the goal can be achieved. It is possible that psychological factors are what drives people's behaviour during the course of the task they are trying to accomplish.

Types of Motivation

Extrinsic Motivation (Motivation Derived from Outside Sources): The motivation that originates from factors external to the individual and typically results in positive outcomes such as praise, trophies, financial gain, or social recognition. Social psychological research has indicated that extrinsic rewards can lead to over justification and a subsequent reduction in intrinsic motivation.
Intrinsic Motivation (Motivation That Comes From Within): The motivation that arises from within an individual, such as the desire to solve a difficult puzzle for the purpose of attaining the personal satisfaction that comes from doing so.

Impact of Motivation

The following are the three primary components of motivation:

Conformational Changes: This is when the choice is made to carry out a behaviour.
Perseverance: It is a persistent effort in the direction of a goal, in spite of the presence of obstacles.
Intensity: Intensity is a visible manifestation of the dedication and enthusiasm with which one pursues a goal.

Theories Of Motivation

Alderfer's ERG Theory of Motivation

The ERG model was established by Clayton Alderfer, who took Maslow's Hierarchy of Needs and turned it into a three-factor model of what motivates people. Existence, relatedness, and development are the three distinct types of needs that are represented by the letters E, R, and G . The three demands listed above are what drive every single human being.
Existence, which essentially refers to both a person's physical and mental well-being, is the most tangible and motivating of Alderfer's three requirements, and it is also the need that comes first.
The need for Relatedness, a sense of community, and a healthy relationship with oneself are the next levels of importance.
The need for Growth, which essentially refers to self-development, fulfilment, and the feeling of realising your potential, is the one of the wants in the ERG model that is the least tangible, but it is still very important.

Herzberg's Theory of Motivation

The two factors known as the "Hygiene factor" and the "Motivating factor" have an impact on one's level of motivation in the workplace. If the hygiene factors are not present, the employee will put in less effort into their work. When present, motivation factors will inspire an employee to put forth their best effort in their work.

Motivational Factors: (a sense of accomplishment, challenging work, recognition, responsibility, promotion, growth) which give positive satisfaction.
Hygiene factors: (company policies, supervision, relationships, working conditions, compensation policies, status, job security, salary and fringe benefits) that do not motivate if present, but, if absent, result in demotivation.

McClelland's Needs Theory of Motivation

McClelland held the belief that an individual's unique needs are developed over the course of their lifetime and are shaped by the various experiences they have throughout their lives. McClelland's Needs Theory is also referred to as the Three Need theory and the Learned Needs Theory from time to time. McClelland has recognised three fundamentally important wants that motivate people:

Need for Power: The capacity to inspire or influence the behaviour of other people is the essence of power. People who have a strong desire for power often pursue leadership roles inside an organization. They tend to be vocal, assertive, demanding, practical and realistic rather than sentimental.
Need for Affiliation: People who have a strong need for affiliation gain pleasure from being loved by everyone and have a tendency to avoid the anguish of being rejected.
Need for Achievement: is the urge to excel, to accomplish in relation to a set of standards, to struggle to achieve success.
The individuals with high achievement needs are highly motivated by competing and challenging work. They look for promotional opportunities in job. They have a strong urge for feedback on their achievement.
Such individuals try to get satisfaction in performing things better. High achievement is directly related to high performance.
Such individuals look for innovative ways of performing job. They perceive achievement of goals as a reward, and value it more than a financial reward

Porter and Lawler's Motivation

The Porter and Lawler theory of motivation is predicated on the supposition that receiving rewards can lead to a sense of fulfilment, and that sometimes performing well can result in receiving rewards. They have a hypothesis that the correlation between performance and satisfaction is due to another variable that is rewarded in some way.
Porter and Lawler contend that performance is not necessarily a direct result of being satisfied. Instead, the opposite is true because once people have achieved their goals of satisfaction, they are more likely to become complacent. On the other hand, performance can result in a feeling of satisfaction if there is effective reward system.

Equity Theory

John S. Adams, a behavioural psychologist, was the first person to develop equity theory in the early 1960s. The core of the equity theory is the principle of balance or equity. As per this motivation theory, an individual's motivation level is correlated to his perception of equity, fairness and justice practiced by the management.
Higher is individual's perception of fairness, greater is the motivation level and vice versa. While evaluating fairness, employee compares the job input (in terms of contribution) to outcome (in terms of compensation) and also compares the same with that of another peer of equal cadre/category.

Vroom's Expectancy Theory of Motivation

The expectation theory of motivation, developed by Victor Vroom, states that an individual's expectations about the future have an effect on the individual's level of motivation.
According to Vroom, the specific factors that determine an individual's level of motivation are the degree to which they place a high value on any reward that is associated with a particular action (known as "Value"), the degree to which they believe that they will be able to achieve positive results as a direct result of the effort that they put into something (known as "Expectancy"), and the degree to which they believe that achieving positive results will result in a reward (known as "Belief (Instrumentality). A lack of motivation may be present if any one of these variables is absent.

Self Determination Theory

The work of psychologists Edward Deci and Richard Ryan was the foundation for the development of self determination theory. They came up with a theory about what motivates people, and it suggested that people are driven by a desire to improve themselves and find satisfaction in their lives.
Self-determination is a belief that each person possesses the capacity to choose their own path in life and take responsibility for managing their own affairs. This quality is very important in terms of a person's psychological health and well-being. People have the experience of regaining control over their lives and the choices they make when they practise self-determination.

Communication

Communication refers, in its most fundamental sense, to the act of conveying meaning from one individual to another by using a shared set of symbols.

Communication Models

Linear Model

Linear communication is one-way communication where a sender or speaker transmits a message to a receiver who reads or listens to the message but doesn't respond.
Larold Lasswell, a sociologist and psychologist, created this linear communication model in 1948. The model asks five basic questions: who, what, which channel, to whom, and to which effect? This model allows you to define any piece of communication easily.

The model, as it was first conceived, was made up of five components, all of which were arranged in a sequential fashion:

The origin of the information
Its transmission
The transmission channel
The receiver; and
The destination

Dynamic Model:

Other models of communication processes have been developed in order to cater to the requirements of students of communication whose interests differ from those of quantitatively oriented theorists such as Shannon, Weaver, and Wiener. This was done in order to meet the requirements of students of communication. The art of dynamic communication is one that is always developing, and it consists of the capabilities of interacting consciously and responding thoughtfully to others.

Levels of Communication

Communication Not Directed Toward Me
Communication Between Individuals
Intrapersonal Communication:
Organisational Communication
Mass Communication

Communication In Organisation

Organisational communication is a broad field that includes all forms of communication that allow businesses, government agencies, and non-profit organisations to function, grow, connect with stakeholders, and contribute to society. It allows us the following:-

Performing duties that are connected to particular functions and responsibilities within the realms of sales, services, and production.
Responding to new circumstances with innovative approaches at both the individual and organisational level.
Carry out responsibilities by upholding policies, procedures, or regulations that support day-to-day and ongoing operations.
Cultivate relationships in which "human messages are directed at people within the organization.
Management's role in coordinating, planning, and controlling how operations are carried out within the organization

Supervision

According to Vitiates – "Supervision refers to the direct and immediate guidance and control of subordinates in the performance of their task."

George R. Terry and Stephen G. Franklin have defined supervision as "Supervision is guiding and directing efforts of employees and other resources to accomplish stated work outputs."

Supervision is the process of interaction, guidance and control of subordinates by meeting them regularly about the performance of their work. It is intended at ensuring that the subordinates work according to the plans and policies of the organization. A supervisor plays two important roles:

Supervisor communicates the plans, policies, decisions and strategies of management to the subordinates.
If there are complaints, grievances and suggestions of the subordinates, he communicates the same to the management. Thus, the supervisor plays the role of link between the subordinates and the management.
A supervisor also acts as a guide to the subordinates. He helps them in their professional development by enhancing their knowledge and skills relating to their assigned jobs. He also acts as a motivator and mentor for the subordinates.

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CAIIB ABFM Module A Unit 5 Directing ( Ambitious_Baba )