Hi Pratibha, as we know that a Business Object can only be used via a Process, an Action stage allows us to use a Business Object in a Process. An Action stage is similar to a Page Reference in that it takes the flow of the Process down to another page. But instead of it being a page of the same diagram, it is the page of a Business Object, i.e., an entirely separate diagram.
In the Action stage you can specify the Business object name and then in the Action column you can select the name of the page from the business object.