CBSE Class 12 Business Studies Organising Assignment

ORGANISING
Meaning of Organising :-

Meaning of Organising :-
After laying down the plans and objectives the next function to be performed by the managers is organising. It determines what activities and resources are required and decides who will do a particular task, where it will be done and when it will be done.
* Thus organising means establishing relationship between various factors of production and it in concerned with establishing relationship amongst jobs, sections, department & position.
Organising is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives.

Step Involved in the Process of Organising :-
1. Identification and Division of Work :- It involves identification and dividing the total work to be done into specific activities (called jobs) in accordance with previously determined plans. By dividing the work the burden of work can be shared among the employees.
It facilitates specialisation of work & skills. Duplication of work can be avoided by dividing the work into manageable activities.
2. Departmentalisation :- The second step in organising is to combine or group similar or related jobs into larger units, called departments, divisions or sections. They can be grouped on the basis of functions which an organisation undertakes to achieve its objective. For example departments may be created for manufacturing, marketing, financing etc.
Departmentalisation is done to achieve coordination & to facilitate unity of efforts.
3. Assignment of duties :- Once departments have been formed each of them is placed under the charge of an individual called departmental head (e.g., production manager, finance manager etc.) Jobs are then allocated to the members of each department according to their skills and qualifications.
4. Establishing Reporting Relationships :- Merely allocating work is not enough. Each individual should also know from whom he has to take orders and to whom he is accountable. It helps in coordination amongst various departments.

Importance of Organising :-
1. Benefits of specialisation : - In organising every individual is assigned a part of total work and not the whole task. Due to this division of work into smaller units and repetitive performance leads to specialisation. Thus organising promotes specialisation which in turn leads to efficient & speedy performance of tasks.
2. Clarity in working Relationship :- It helps in creating well defined jobs and also clarifying the limits of authority and responsibility of each job.
The superior, subordinate relationship is clearly defined in organising.
3. Effective Administration : It provides a clear description of jobs and related duties which helps to avoid confusion and duplication. Clarity in working relationships enables proper execution of work which results in effective administration.
4. Optimum Utilisation of resources : The proper assignment of jobs avoids overlapping/duplication of work. This helps in preventing confusion and minimising the wastage of resources and efforts.
5. Adaptation of change :- It allows a business enterprise to adapt itself according to changes in the business environment. Organisational structures can be suitably modified according to changes.
6. Development of personnel : Sound organisation encourages initiative & creative thinging on part of employees.
7. Expansion and growth : It helps in growth & diversification of an enterprise by adding more job positions & department.

Meaning of Organisational Structure :-
It seeks to establish relations among all the persons working in the organisation. Under the organisational structure various posts are created to perform dif ferent activities for the attainment of the objectives of the enterprise. Relations among persons working on dif ferent posts are determined. The structure provides a basis or framework for managers and other employees for performing their functions.
The organisation structure can be defined as the frame work within which managerial and operating tasks are performed.

Relation between Span of Management and Organisation structure- Span of mangement refers to the number of subordinates that can be effectively managed by a superior. The Span of management to a large extent gives shape to the organisation structure. This determines the levels of management in the structure.

Advantages :
1. Specialisation - Better division of labour takes place which results in specialisation of functions and its consequent benefits.
2. Coordination is established :- All the persons working within a department are specialist of their respective jobs. It makes the coordination easier at department level.
3. Helps in increasing managerial efficiency : Managers of one department are performing same type of function again and again which makes them specialised and improves their efficiency.
4. Minimises cost - It leads to minimum duplication of effort which results in economies of scale and thus lowers cost.

Disadvantages
1. Ignorance of organisational objectives - Each departmental head works according to his own wishes. They always give more weight to their departmental objectives. Hence overall organisation objectives suffer.
2. Difficulty in Inter-departmental Coordination - All departmental heads work as per their own wishes which results coordination within the
department but it makes inter-departmental coordination difficult.
3. Hurdle in complete development - because each employee specialises only in a small part of the whole job.

Suitability :-
1. Where the size of business unit is large.
2. Where specialisation is required.
3. Where there is mainly only one product in sold.

II. DIVISIONAL ORGANISATION STRUCTURE :

Dividing the whole enterprise according to the major products to be manufactured (like metal, plastic, cosmetics etc) in known as divisional organisation structure. 

Advantages :-
1. Quick decision making :- Divisional manager can take any decision regarding his division independently which makes decisions quick and effective.
2. Divisional results can be Assessed :- Divisional results (profit/loss) can be assessed easily. On this basis unprofitable division can be closed.
3. Growth and Expansion :- It facilitates growth and expansion as new divisions can be added without disturbing existing departments.

Disadvantages :-
1. Conflicts - among different divisions on allocation of resources
2. Duplicity of Functions : - Entire set of functions is required for all divisions. It gives rise to duplicity of efforts among divisions.
3. Selfish Attitude :- Every division tries to display better performance even sometimes at the cost of other divisions. This shows their selfish attitude.

Suitablity :-
1. Where the number of main products are more than one.
2. Where the size of the concern is large enough.

FORMAL ORGANISATION

This structure is designed by the management to achieve organisational goals in which the responsibilities, authority and mutual relationships among all the employees working in an enterprise are clearly defined. It can be functional or divisional.

Features :-
1. It in deliberately created by the top management.
2. It is based on rules and procedures. Which are in written form
3. It is impersonal - Does not take into consideration emotional aspect.
4. It clearly difines the authority and responsibility of every individual.
5. It is created to achieve organisational objectivies.

Advantages :-
1. Easier to fix responsibility since mutual relationships are clearly defined.
2. No overlapping of work - because things move according to a definite plan.
3. Unity of command through an established chain of commands.
4. Easy to achieve objectives - because of coordination and optimum use of human and material resources.
5. Stability in the organisation - because behaviour of employees can be fairly predicted since there are specific rules to guide them.

Disadvantages :
1. The work is based by rules which causes unnecessary delay.
2. Lack of initiatives - because the employees have to do what they are told to do and they have no opportunity of thinking.
3. Limited in scope - It is difficult to understand all human relationships in an enterprice as it places more emphasis on structure and work.

Informal Organisation :
An informal organisation is that organisation which is not established deliberately but comes into existence because of common interests, tastes and religious and communal relations.

Features :
1. It originates from within the formal organisation as a result of personal interaction among employees.
2. It has no written rules and procedures.
3. It does not have fixed lines of communication.
4. It is not deliberately created by the management.
5. It is personal - means the feelings of individuals are kept in mind.

Advantage
1. Speed : Prescribed lines of communication are not followed which leads to faster spread of information.
2. Fulfillment of social needs - enhances job satisfaction which gives them a sense of belongingness in the organisation.
3. Quick solution of the problems - because the subordinates can speak out their mind before the officers which helps the officers to understand the problems of their subordinates.

Disadvantages :-
1. It creates rumours :- All the persons in an informal organisation talk carelessly and sometimes a wrong thing in conveyed to the other person.
2. It resists change and lays stress on adopting the old techniques.
3. Priority to group Interests - Pressurises members to confirm to group expectations.

Difference between Formal & Informal organisationģ Delegation of Authority 

Basic	Formal organisation	Informal organisation
1. Meaning	If refers to the structure  of well defined authority and and responsibility.	It refers to the network of social relationships which develops automatically
2. Nature	Rigid	Flexible
3. Authority	Arises by virtue of positions in management	Arises out to personal qualities.
4. Adherence to rules	Violation of rules may lead to penalties and punishments	No such punishments.
5. Flow of communication	Takes place through the scalar chain	Not through a planned route It can take place in any direction.

Meaning - It means the granting of authority to subordinates to operate within the prescribed limits. The manager who delegates authority holds his subordinates responsible for proper performance of the assigned tasks. To make sure that his subordinates perform all the work effectively and efficiently in expected manner the manager creates accountability.

Elements of Delegation :-
1. Authority - The power of taking decisions in order to guide the activities of others. Authority is that power which influences the conduct of others.
2. Responsibility : It is the obligation of a subordinate to properly perform the assigned duty. When a superior issues orders it becomes the responsibility of the subordinate to carry it out.
3. Accountability - When a superior assigns some work to a subordinate, he is answerable to his superior for its success or failure.
Principle of Absoluteness of Accountability - Authority can be delegated but responsibility / Accountability cannot be delegated by a manager. The authority granted to a subordinate can be taken back and re-delegated to another person. The manager cannot escape from the responsibility for any default or mistake on the part of his subordinates.

Importance of Delegation of Authority
1. Reduction of Executive work load - It reduces the work load of officers.
They can thus utilise their time in more important and creative works instead of works of daily routine.
2. Employee development - Employees get more opportunities to utilise their talent which allows them to develop those skills which will enable them to perform complex tasks.
3. Quick and better decision are possible - The subordinate are granted sufficient authority so they need not to go to their superiors for taking decisions concerning the routine matters.
4. High Morale of subordinates - Because of delegation of authority to the subordinates they get an opportunity to display their efficiency and capacity.
5. Better coordination - The elements of delegation - authority, responsibility and accountability help to define the power, duties and answerability related to various job positions which results in developing and maintaining effective co-ordination.

Difference - Authority, Resposibility and Accountability

Basic	Authority	Responsibility	Accountability
1. Meaning	Right to command	Obligation to perform an assigned task	Answerability for out come of the assigned task.
2. Origin	Arises from formal position	Arises from delegated authority	Arises from responsibility.
3. Flow	Downward - from Superior to Subordinate	upward - from Subordinate to Superior	upward - from Subordinate to Superior
4. Withdrawl	Can be withdrawn anytime by giving notice	Cannot be withdrawn once created	Cannot be withdrawn once created

Decentralisation :-
Meaning - It means to delegate authority to all levels of management for taking decisions. Under decentralisation all the authority except the one which is absolutely necessary for the superiors to hold is given to the subordinates permanently. Under decentralisation the number of centres for taking decisions increases because the managers belonging to the middle and lower level have the authority to take important decisions.

Centralisation and Decentralisation - represents the pattern of authority among managers at different levels. Centralisation of authority means concentrations of power of decision making in a few hands. In such an organisation very little authority is delegated to managers at middle and lowerlevels. No organisation can be completely centralised or decentralised. They exist together and there in a need for a balance between the two. As the organisation grows in size there is tendency to move towards decentralisation.
Thus every organisation characterised by both.

Importance of Decentralisation :-

1. Develops initiat ive amongst subordinates - It helps to promote confidence because the subordinates are given freedom to take their own decisions.
2. Quick and better decisions - The burden of managerial decisions does not lie on a few individuals but get divided among various persons which helps them to take better and quick decisions.
3. Relieves the top Executives from excess workload - The daily managerial works all assigned to the subordinates which leaves enough time with the superiors which they can utilise in developing new strategies.
4. Managerial Development - It means giving authority to the subordinates upto the lower level to take decisions regarding their work. In this way
the opportunity to take decisions helps in the development of the organisation.
5. Better Control - It makes it possible to evaluate performance at each level which results in complete control over all the activities.

Difference between - Delegation & Decentralisationģ 

Basic	Delegation	Decentralisation
1. Nature	It is a compulsory act	It is an optional policy
2. Freedom of action	Less freedom to take decisions due to more control by the superiors	More freedom of action due to less control by the top management.
3. Status	It is a process of sharing tasks and authority	It is the result of policy decisions taken by top decisions taken by top management.
4. Scope	Narrow - as it is confined to a superior and his immediate subordinate.	Wide - It includes extensions of delegation to the lowest of management.
5. Purpose	To reduce the burden of the manager	To increase the role and autonomy of lower level management.

MCQ Questions for NCERT Class 12 Business Studies Organising

Question. Which of the following cannot be delegated ?
(a) Authority
(b) Responsibility
(c) Accountability
(d) None of these

Answer : C

Question. How many persons are involved in the process of delegation ?
(a) Two
(b) Three
(c) Ten
(d) Many

Answer : A

Question. The concept which helps a manager to extend his area of operations ,as without it his activities would be restricted -
(a) Delegation
(b) Decentralisation
(c) Centralisation
(d) None of these

Answer : A

Question. The type of Organisational Structure which promotes flexibility and initiative -
(a) Functional Structure
(b) Divisional Structure
(c) Decentralisation
(d) All of these

Answer : B

Question. Which function of management coordinates human efforts and assembles resources and integrates all for achieving organization objectives ?
(a) Planning
(b) organizing
(c) Directing
(d ) Controlling

Answer : B

Question. Which of the following is an ideal situation ?
(a) Authority > Responsibility.
(b) Authority < Responsibility.
(c) Authority = Responsibility .
(d) None of the above .

Answer : C

Question. Responsibility Flows-
(a) Upwards
(b) Downwards
(c) Diagonally
(d) None of these

Answer : A

Question. Span of Management refers to-
(a) Framework within which managerial activities are performed .
(b) Clearly defines Rules and Regulations .
(c) Number of subordinates that are effectively managed by a superior .
(d) None of these .

Answer : C

Question. The framework within which operating and managerial task are performed -
(a) Delegation of Authority
(b) Centralisation
(c) Decentralisation
(d) Organisation Structure

Answer : D

Question. The process of combining or grouping similar jobs into larger units called -
(a) Organizing
(b) Centalisation
(c) Departmentalisation
(d) Decentralisation

Answer : C

Question. Which type of Organisational Structure Facilitates occupational specialization ?
(a) Divisional Structure
(b) Functional Structure
(c) Formal Structure
(d) Informal Structure

Answer : B

Question. Arrange the Organising Process in correct order :-
1. Estabilishing reporting relationship .
2. Identification and division of work .
3. Departmentalisation .
4. Assignment of duties .
Correct order would be -
(a) 1 ,2 ,3 , 4 .
(b) 2 ,3 ,4 ,1 .
(c) 1 ,3 ,2 , 4 .
(d) 3 ,2 ,1 ,4 .

Answer : B

Assertion Reason Based Questions :

Question. Assertion :- It is essential for effective performance that a proper match is made between the nature of job and the ability of an individual.
Reason :- The work is divided into manageable activities which are similar in nature and then grouped together .
(a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion .
(b)Both Assertion and Reason are true but Reason is not the correct explanation of Assertion .
(c) Assertion is true but Reason is false .
(d) Assertion is false but reason is true .

Answer : B

Question. Assertion :Pursuing departmental interest at the cost of organizational interest can hinder the interaction between two or more departments .
Reason :- A manager when gain power in the organization and have independence ,may ignore organizational interest .
(a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion .
(b)Both Assertion and Reason are true but Reason is not the correct explanation of Assertion .
(c) Assertion is true but Reason is false .
(d) Assertion is false but reason is true .

Answer : B

Question. Assertion : Decentralisation is an optional policy .
Reason : Decentralisation is the outcome of the policy decision taken by the top management .
(a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion .
(b)Both Assertion and Reason are true but Reason is not the correct explanation of Assertion .
(c) Assertion is true but Reason is false .
(d) Assertion is false but reason is true .

Answer : A

Question. Assertion : Avoidance of duplication of work helps in preventing confusion .
Reason : Organising leads to proper usage of raw material , financial resources and human resources .
(a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion .
(b) Both Assertion and Reason are true but Reason is not the correct explanation of Assertion .
(c) Assertion is true but Reason is false .
(d) Assertion is false but reason is true .

Answer : A

 

(I.) One Markers:

Question. Name the function of management which co-ordinate the Physical, Financial, and Human resources and establishes productive relations among them for achievement of specific goals.
Answer: Organising

Question. Organising leads to a systematic allocation of jobs amongst the workforce. Which importance of organizing is stated here?
Answer: Benefits of specialisation .

Question. Organising clarifies lines of communication and specifies who is to report to
whom. Mention the importance of organizing indicated here.
Answer: Clarity in working relationships.

(II.) Three/Four Markers:

Question. Name and explain the two steps in the process of organizing which comes after identification and division of work and departmentation.
Answer: Assignment of duties and establishing reporting relation ships.

Question. Aman Ltd. is manufacturing Toys and has Production Sales, Purchase and finance Department, which type of organization structure would you suggest to them? State any three advantage of this organization structure.?
Answer: I would suggest functional structure fro aman ltd.

Question. Hindustan Ltd. is manufacturing computers, soaps and textile . Which type of organizational structure would suit the requirement of such organization?
State any three advantages of this organization structure?
Answer: Divisional Structure would suits the requirement of Hindustan ltd.

Question. It is a System of consciously coordinated activities of two or more person towards a common objectives. Mention this system of organization and explain its two features.
Answer: Formal organization

Question. It is a network of personal and social relations not established or required by the formal organization but arising spontaneously as people associate with one another. Name this organization and give its three advantages.
Answer: Informal organization

Question. The directors of Narmada Ltd. An organization manufacturing computer have asked their marketing manager to achieve a target rate of 100 computers per day. The marketing manager has delegates the task to his deputy sales manager working under him. The deputy sales managers could not achieve he target. Is the marketing manager responsible for the failure of his deputy sales manager? Explain in brief , the relevant principle in support of your answer.?
Answer: Yes, marketing manager is responsible for non- achievement of he target sales.

Question. The Director of Kamal Ltd, an organization manufacturing computer want to double the sales and given this responsibility to their sales manager. The Sales Manager has no authority either to increase , sales expense or appoint new salesman. Hence, he could not achieve this target. Is the sales manager responsible for not achieving the target? Explain in brief , the relevant principal in support of your answer.?
Answer: No, sales manager is not responsible for not achieving the target. The principle involved is purity of authority and responsibility.

Question. It refer to the systematic delegation of authority from top management to the lower level managers. Mention the name of it.
Answer: Decentralization.

Question. “If we delegate the authority, we multiply it by two if we decentralize it, we multiply it by many “ how?
Answer: Scope of delegation of authority is limited as it is confined to a manager and his immediate subordinate in work unit. Scope of decentralization- It involves systematic delegation of authority at all levels and in all functions of the organization.
It is an extension of delegation to the lowest levels in the organization.

Question. The employee of ABC Ltd. Take part in volleyball matches on Sunday. Name the types of organization formed.
Answer: Informal organization.

Question. “The first Step in the process of organizing is identification and division of work” Why is he work divided into manageable activities?
Answer: The work is divided into manageable activities so that duplication of efforts and resources can be avoided and the burden of work can be shared among the employees.

Question. While allocating work to various employees how the work must be assigned?
Answer: The work must be assigned to those who are best fitted to perform it well.

Question. Which Function of management is concerned with building a stable frame work or structure of various parts of an enterprise?
Answer: Organizing.

Question. How can department or division be created?
Answer: It can be created on the basis ofa ) territory and b) products

Question. How does an informal organization emerge?
Answer: Informal organization emerges from within the formal organization when people interact beyond their officially defined roles.

Question. Name the organization which has the benefit of Easy to fix responsibility?
Answer: Formal organization.

Question. Name the type of organization which does not have predetermined objectives?
Answer: Informal organization.

Question. A Fashion design house has the following main job:-
(1) Manufacturing (2) Finance (3)Marketing (4) Personal (5) Research and Development
Which organizational structure will you prefer for this type of a company and why?
Answer: Functional organizational structure will be suitable.

Question. Rina runs a shoe manufacturing factory. She wants to expand her business. For expansion she contemplated to enter into the manufacturing of leather bags and western formal wear apart from the running business of shoes. By doing this her company will be able to provide many products to working women under one roof. Which organization structure will you suggest her and why?
Answer: In this situation, Divisional Structure will be suitable as it provides equal importance to all products. Also describe the advantages of divisional organization structure.

Question. Name the activity which increase the importance of the role of subordinates?
Answer: Decentralization.

Question. For which kind of enterprises functional structure is more suitable?
Answer: When the size of the organization is large, has a diversified activities and operations require a high degree of specialization.

(III) Five/Six Markers:

Question. What are the advantages and disadvantages of divisional structure?
Answer:
A) Advantages:
1) All activities associated with one product. It can be easily integrated.
2) Decision making is faster.
3) Performance can be easily assessed remedial action can be taken
4) It facilitates expansion and growth as new divisions can be added.
Disadvantages:
1) This gives rise to duplication of effort among its divisions.
2) Manages in each department focus on their own product without thinking the rest of the organization.
3) There may not be full utilization of different equipments
4) Conflict may arise among different division.

Question. Distinguish between formal and informal organizations on the basis of
a. Formation b. Purpose c. structure d. Behavior of members e. stability andf. adherence to rules.
Answer: 

Basis	Functional Structure	Divisional Structure.
Formation	Deliberately Planned	Emerges Spontaneously among people
Purpose	To achieve organizational goals	To satisfy social and cultural needs
Structure	Well defined structure	Does not have a clear-cut structure
Behavior of members	Standards of behavior	Mutual consent among members

Question. Distinguish between ‘delegation’ and ‘decentralisation’ of authority .
Answer: 

Basis	Delegation	Decentralisation
Purpose	It means getting things done through subordinates	To prepare the organization for handling major expansion of its activities
Parties involved	It is confined with manager and his immediate subordinate	It indicates relationship between top management and various other departments
Withdrawa l of authority	The delegated authority can be withdrawn by the delegator	Withdrawal of authority is difficult

Difference between Authority and responsibility 

Basis	Authority	Responsibility
Direction of flow	Authority flows downwards	Responsibility flows upwards
Delegation	Authority can be delegated	Responsibility is absolute and cannot be delegated.
Origin	Arises from law	Arises from authority.

CASE STUDIES

1. A company, which manufactures a popular brand of toys, has been enjoying good market reputation. It has a functional organisational structure with separate departments for Production, Marketing, Finance, Human Resources and Research and Development. Lately to use its brand name and also to cash on to new business opportunities it is thinking to diversify into manufacture of new range of electronic toys for which a new market is emerging.

Question. Prepare a report regarding organisation structure giving concrete reasons with regard to benefits the company will derive from the steps it should take.
Answer:
Divisional structure. The report is as under:
By : Ashok Kumar
Delhi
Wednesday, 22 January, 14
The organisation enjoys good market reputation. The company is encashingit’s brand name and reputation. It’s venturing into manufacture of a new range of electronic toys. This organisation has got multiple divisions, it should appoint divisional heads for each division. This will ensure product specialisation. Adapting such structure will ensure flexibility and easy fixation of responsibility. The change of structure will also help the business enterprise to make these divisional heads accountable. So, in a nutshell this new structure will ensure growth and expansion for the organisation.

2. A company manufacturing sewing machines set up in 1945 by the British promoters follows formal organisation culture in totality. It is facing lot of problems in delays in decisionmaking. As the result it is not able to adapt to changing business environment. The work force is also not motivated since they cannot vent their grievances except through formal channels, which involve red tape. Employee turnover is high. Its market share is also declining due to changed circumstances and business environment.

Question. You are to advise the company with regard to change it should bring about in its organisation structure to overcome the problems faced by it.
Answer: To overcome the problems faced, the company should encourage informal organisation.

Question. Give reasons in terms of benefits it will derive from the changes suggested by you.
Answer: The benefits it will derive are:
(a) Faster communication and quick feedback: It follows an independent channel of communication as there is no Prescribed lines of communication to be followed. Thus, the informal organisation leads to faster spread of information as well as quick feedback.
(b) Fulfill social needs: It helps to fulfill the social needs of the members and allows them to find like-minded people. This enhances their job satisfaction since it gives them a sense of belongingness in the organisation.
(c) Fulfillment of organisational objectives: It contributes towards fulfilment of organisational objectives by compensating for inadequacies in the formal organisation. For example, employees reactions towards plans and policies can be tested through the informal network.

Question. In which sectors can the company diversify keeping in mind the declining market for the product the company is manufacturing?
Answer: The company can diversify into interlocking machines, automatic buttoning units, embroidery machines.

A company X Limited manufacturing cosmetics, which has enjoyed a preeminent position in business, has grown in size. Its business was very good till 1991. But after that, new liberalised environment has seen entry of many MNC’s in the sector. With the result the market share of X Limited has declined. The company had followed a very centralised business model with Directors and divisional heads making even minor decisions. Before 1991, this business model had served the company very well as consumers had no choice. But now the company is under pressure to reform.

Question. What organisation structure changes should the company bring about in order to retain its market share?
Answer: The company should shift from centralised to decentralised structure. It would ensure quick decision-making, motivate the subordinates and ensure effective communication.

Question. How will the changes suggested by you help the firm? Keep in mind that the sector in which the company is FMCG.
Answer: Even in Fast moving consumer goods (FMCG) industry, there is need for decentralisation. By using decentralisation, a company gets following benefits.
(a) Develops initiative among subordinates 
♦ Decentralisation helps to promote self-reliance and confidence amongst the subordinates. This is because when lower managerial levels are given freedom to take their own decisions they learn to depend on their own judgment.
♦ It also keeps them in a state wherein they are constantly challenged and have to develop solutions for the various problems they encounter. A decentralization policy helps to identify those executives who have the necessary potential to become dynamic leaders.
(b) Develops managerial talent for the future:
♦ Formal training plays an important part in equipping subordinates with skills that help them rise in the organisation but equally important is the experience gained by handling assignments independently.
♦ Decentralisation gives them a chance to prove their abilities and creates a reservoir of qualified manpower who can be considered to fill up more challenging positions through promotions.
♦ It also helps to identify those who may not be successful in assuming greater responsibility. Thus, it is a means of management education as well as an opportunity for trained manpower to use its talent in real-life situations.
(c) Quick decision-making:
♦ The management hierarchy can be looked upon as a chain of communication.
In centralised organisation, every decision is taken by the top management, the flow of information is slow as it has to traverse many levels. Response also takes time. This reduces the speed of decision-making and makes itdifficult for an enterprise to adapt to dynamic operating conditions.
♦ In a decentralised organisation, however, since decisions are taken at levels which are nearest to the points of action and there is no requirement for approval from many levels, the process is much faster. There are also less chances of information getting distorted because it doesn’t have to go through long channels.
(d) Relief to top management:
♦ Decentralisation is required to reduce the burden of top executives when it increases due to increase in the size and complexity of the organisation.
♦ In a decentralised organization, top executives have enough time to plan ahead, develop new strategies and concentrate on coordination and control. Since they are not burdened by the routine problems and complexities of administrative details.

MCQs for NCERT Class 12 Business Studies Organising

Question. It is defined as the framework within which managerial and operating tasks are performed.
(a) Span of management
(b) Organisational structure
(c) Informal organisation
(d) None of the above

Answer : B

Question. Identify the type of organisational structure which facilitates occupational specialisation,
(a) Functional structure
(b) Horizontal structure
(c) Network structure
(d) Divisional structure

Answer : A

Question. It refers to the number of subordinates that can be effectively managed by a superior,
(a) Organisational structure
(b) Informal organisation
(c) Span of management
(d) None of the above

Answer : C

Question. Uranus Limited is a company dealing in metal products. The work is mainly divided into functions including production, purchase, marketing, accounts and personnel. Identify the type of organisational structure followed by the organisation.
(a) Functional structure
(b) Relational structure
(c) Divisional structure
(d) None of the above

Answer : A

Question. This type of organisational structure is most suitable when the size of the organisation is large, has diversified activities and operations require a high degree of specialisation,
(a) Divisional structure
(b) Functional structure
(c) Network structure
(d) Matrix structure

Answer : A

Question. Which of the following is not an element of delegation?
(a) Responsibilty
(b) Authority
(c) Accountability
(d) Decentralisation

Answer : D

Question. Name the process which co-ordinates human efforts, assembles resources and integrates both into a unified whole to be utilised for achieving specified objectives,
(a) Management
(b) Planning
(c) Organising
(d) Directing

Answer : C

Question. Rishabh has joined as a Creative Head in an entertainment company. He always ensures that the work has been divided into small and manageable activities and also the activities of similar nature are grouped together. Identify the related step in organising process being mentioned in the above lines.
(a) Identification and division of work
(b) Departmentalisation
(c) Assignment of duties
(d) Establishing reporting relationships.

Answer : B

Question. It is defined as the framework within which managerial and operating tasks are performed.
(a) Span of management
(b) Organisational structure
(c) Informal organisation
(d) None of the above

Answer : B

Question. Paras Limited is a company dealing in metal products. The work is mainly divided into functions including production, purchase, marketing, accounts and personnel. Identify the type of organisational structure followed by the organisation.
(a) Functional structure
(b) Relational structure
(c) Divisional structure
(d) None of the above.

Answer : A

Question. Identify the correct sequence of steps to be followed in an organising process.
(a) Departmentalisation, Establishing reporting relationships, Assignment of duties, Identification and division of work
(b) Identification and division of work, Departmentalisation, Assignment of duties, Establishing reporting relationships.
(c) Identification and division of work, Assignment of duties, Departmentalisation, Establishing reporting relationships
(d) Identification and division of work, Establishing reporting relationships, Departmentalisation, Assignment of duties.

Answer : B

Question. It refers to the number of subordinates that can be effectively managed by a superior,
(a) Organisational structure
(b) Informal organisation
(c) Span of management
(d) None of the above.

Answer : C

Question. Name the process which co-ordinates human efforts, assembles resources and integrates both into a unified whole to be utilised for achieving specified objectives,
(a) Management
(b) Planning
(c) Organising
(d) Directing

Answer : C

Question. Under this type of organisational structure, manpower is grouped on the basis of different products manufactured.
(a) Divisional structure
(b) Functional structure
(c) Network structure
(d) Matrix structure.

Answer : A

Important for NCERT Class 12 Business Studies Organising

Very Short Answer Type Questions :

Question. Sharda Ltd. is pursuing diversified activities which require a high degree of specialisation. Identify the type of structure that should be followed by Sharda Ltd. 
Answer : Functional structure

Question. Alliance Ltd. is engaged in manufacturing plastic buckets. The objective of the company is to manufacture 100 buckets a day. To achieve this, the efforts of all departments are coordinated and interlinked and authority-responsibility relationship is established among various job positions. There is clarity on who is to report to whom. Name the function of management discussed above.
Answer : Organising.

Question. Alliance Ltd. is engaged in manufacturing plastic buckets. The objective of the company is to manufacture 100 buckets a day. To achieve this, the efforts of all departments are coordinated and interlinked and authority-responsibility relationship is established among various job positions. There is clarity on who is to report to whom. Name the function of management discussed above. 
Answer : Organising

Question. National Vritech Ltd. has grown in size. It was a market leader but with changes in business environment and with the entry of MNCs, its market share is declining. To cope up with the situation, the CEO starts delegating some of his authority to the General Manager, who also felt himself overburdened and with the approval of CEO disperses some of his authority to various levels throughout the organisation. Identify the concept of management discussed above.
Answer : Decentralisation

Question. National Vritech Ltd. has grown in size. It was a market leader but with changes in business environment and with the entry of MNCs, its market share is declining. To cope up with the situation, the CEO starts delegating some of his authority to the General Manager, who also felt himself overburdened and with the approval of CEO disperses some of his authority to various levels throughout the organisation. Identify the concept of management discussed above.
Answer : Decentralisation.

Short Answer Type Questions :

Question. What is meant by span of management? 
Answer : Span of management refers to the number of subordinates that can be effectively managed by a superior. A narrow span of control would necessitate more number of levels in the organisation or vice versa.

Question. The activities and employees in ‘Elegance Pvt. Ltd.’, a footwear manufacturing company, can be broadly grouped into five departments namely; production, purchase, marketing, accounts and personnel. Over the years the company has grown and expanded its operations manifolds. The company now intends to diversify into leather bags segment. So its management has decided to restructure its operations. They plan to create separate product divisions for each product line wherein the functioning of each division will be further divided into five departments namely; production, purchase, marketing, accounts and personnel. In context of the above case: How is the company’s future organisational structures likely to be different from the existing one? State any three points of differences between the two types of organisational structures.
Answer : At present, the company is following functional structure and it intends to adopt a divisional structure in future. The difference between Functional organisational structure and Divisional organisational structure is as follows: 

Question. Ramdas, aged 49 is working in an aviation company. He is the senior most employee in his division. He is even senior to the division manager, Kanaputti. Ramdas is considered one of the most committed, capable and hard-working employees. As a result of his abilities and seniority, he generally received the work assignments of his choice. Although there was no formal designation of various „special’ projects assigned to Ramdas, he handled them as a matter of routine. A problem developed when an able and intelligent person Nagarjuna, aged 33, was appointed by Kanaputti. Nagarjun’s previous three years’ experience in the closely related work, made it possible for him to catch on to the routine work of his new job more rapidly than was customary for a new employee. On several occasions, Kanaputti noticed the tension developing between the two employees. However, he didn’t want to get involved in their personal issues as long as the work was completed effectively and efficiently by them. One day, the tension between them reached the boiling point and Ramdas complained to Kanaputti stating that his duties were being largely taken over by Nagarjun. Kanaputti issued the order stating the clear allocation of the jobs and related duties between the two. He further clarified the working relationship between them by specifying who was to report to whom. This helped in reducing the workload, enhancing productivity and removing ambiguity.
1. Identify and state the step of organizing process which has not been carried out properly and contributed to this problem.
2. State the two steps of the organizing process which have been taken by Kanaputti to respond to the complaint of Ramdas.
3. Also state two points of importance of organizing as reflected in the above case.
Answer: 1. The step of organizing process which has not been carried out properly and contributed to this problem is Assignment of duties. Assignment of Duties: Once departments have been created each of them is placed under the charge of an individual and then jobs are allocated to the members as per their job positions.
2. The two steps of the organizing process which have been taken by Kanaputti to respond to the complaint of Ramdas are listed below:
♦ Assigning the duties
♦ Establishing reporting relationship.
3. The two points of importance of organizing as reflected in the above case are described below:
♦ Optimum utilization of resources:
♦ Adaptation to change:

Question. Kiran Industries is a company dealing in office furniture. The company chose to diversify its operations to improve its growth potential and increase market share. As the project was important, many alternatives were generated for the purpose and were thoroughly discussed amongst the members of the organisation. After evaluating the various alternatives, Sukhvinder, the Managing Director of the company, decided that they should add ‘Home Interiors and Furnishings’ as a new line of business activity.
Name the framework, which the diversified organisation should adopt, to enable it to cope with the emerging complexity? Give one reason in support of your answer.
Answer : Divisional structure should be adopted by the diversified organisation to enable it to cope with the emerging complexity.
Reason: It leads to faster decision making, promotes flexibility and initiative because each division functions as an autonomous unit.

Question. Ishita works as a corporate event coordinator in an event management company. She has been made an overall official incharge for organizing a painting exhibition for one of the clients of the company. For ensuring that the exhibition takes place successfully, she identifies the various activities involved and divides the whole work into various task groups like marketing committee, decoration committee and reception committee. In order to facilitate coordination within and among committees, she appoints a supervisor of each group. Each member in the group is asked to report to their respective supervisors and all the supervisors are expected to work as per Ishita’s orders. In context of the above case:
1. Identify the function of management being performed by Ishita.
2. Describe briefly the various steps involved in the performance of the function of management as identified in part (1) of the question.
Answer : 1. The Organising function of management is being performed by Ishita.
2. The steps involved in the process of organizing are as follows:
♦ Identification and Division of Work:
♦ Departmentalisation:
♦ Assignment of Duties:
♦ Establishing Reporting Relationship:

Question. Smriti works as a marketing manager in a small company. The company has recently launched a new brand of room fresheners through aggressive promotion. However, the product is less in demand and its sales are low. Smriti decides to study the reasons for the poor likability of the product through a market research. Keeping in view the volume of work, she knows it will be impractical for her to handle it all by herself. In order to share her work, she deploys a team of executives. She gives them the necessary authority and assigns them the responsibility to conduct the research and report back to her so that she can make the decisions. In the context of the above case: Identify and explain the concept used by Smriti to share her work and authority with her subordinates.
Answer : The concept used by Smriti to share her work and authority with her subordinates is Delegation of authority. Delegation of authority merely means the granting of authority to subordinates to operate within prescribed limits.

Question. Kiran Industries is a company dealing in office furniture. The company chose to diversify its operations to improve its growth potential and increase market share. As the project was important, many alternatives were generated for the purpose and were thoroughly discussed amongst the members of the organisation. After evaluating the various alternatives, Sukhvinder, the Managing Director of the company, decided that they should add ‘Home Interiors and Furnishings’ as a new line of business activity.
1. Name the framework, which the diversified organisation should adopt, to enable it to cope with the emerging complexity? Give one reason in support of your answer.
2. State any two limitations of this framework 
Answer : 1. Divisional structure should be adopted by the diversified organisation to enable it to cope with the emerging complexity.
Reason: It leads to faster decision making, promotes flexibility and initiative because each division functions as an autonomous unit.
2. The two limitations of divisional structure are as follows:
♦ There may be conflicts among the different divisions heads as in pursuit of higher profits, each of them may seek maximum allocation of resources at the cost of other divisions.
♦ The cost is high as each division is provided with separate set of similar functions.

Question. After completing a course in travel and tourism, Karan started his own travel agency. In order to ensure smooth functioning of his business, he decided to create fourteen job positions divided into four departments on the basis of functions namely, front office department including online queries, reservations department for airways, railways and roadways, accommodation booking department, and securing payments department. In order to avoid any interdepartmental conflicts he decides to specify clearly the lines of authority and areas of responsibility for each job position. In the context of the above case:
1. Which function of management is being described in the above lines?
2. Identify the framework created by Karan within which all managerial and operating tasks are to be performed in his organisation.
3. Name the type of the framework as identified in part (1) of the question. Also, give any two of its advantages.
Answer : 1. The Organising function of management is being described in the above lines.
2. Organisational structure is the framework created by Karan within which all managerial and operating tasks are to be performed in his organisation.
3. Karan has created a functional structure as job positions are divided into four departments on the basis of functions namely, front office department including online queries, reservations department for airways, railways and roadways, accommodation booking department, and securing payments department. The two advantages of functional structure are as follows:
♦ A functional structure promotes work-related specialisation since it places emphasis on specific functions. This helps to increase efficiency in utilisation of manpower as employees perform similar tasks within a department and are able to improve performance.
♦ It facilitates control and coordination within a department because of similarity in the tasks being performed. 

Question. Aman Chadha started ‘Bulls Eye’ a company for providing cyber security solutions to businesses. Its objective is to prevent, detect and respond to cyber attacks and protect critical data. He was a hardworking software engineer and an expert in cyber security. His reputation grew by leaps and bounds as he was not only a person of integrity but also did his work with utmost honesty and sincerity. The business started growing day by day. He was delighted when he was offered a big project by the Ministry of Defence. While working on the project, he found that the volume of work made it impractical for him to handle all the work by himself. He decided to expand the team. The company maintained a close liaison with a local engineering college. During a campus placement, Ishan and Vrinda were appointed to work for the new project. He found the new employees capable, enthusiastic and trustworthy. Aman Chadha was thus, able to focus on objectives and with the help of Ishan and Vrinda, the project was completed on time. Not only this Aman Chadha was also able to extend his area of operations. On the other hand Ishan and Vrinda also got opportunities to develop and exercise initiative.
1. Identify and briefly explain the concept used by Aman Chadha in the above case which helped him in focusing on objectives.
2. Also, state any four points of importance of the concept identified in (i) above. 
Answer : 1. Delegation of authority is the concept used by Aman Chadha in the above case which helped him in focusing on objectives. Delegation of authority is the process of granting of authority to the subordinates to operate within prescribed limits.
2. The four points of importance of delegation of authority are described below:
♦ Effective management:
♦ Employee development:
♦ Motivation of employees:
♦ Facilitation of growth:

Question. Samir Gupta started a telecommunications company, ‘Donira Ltd.’, to manufacture economical mobile phones for the Indian rural market with 15 employees. The company did very well in its initial years. As the product was good and marketed well, the demand of the products went up. To increase production, the company decided to recruit additional employees. Samir Gupta, who was earlier taking all the decisions for the company, had to selectively disperse the authority. He believed that subordinates are competent, capable and resourceful and can assume responsibility for the effective implementation of their decisions. This paid off and the company was not only able to increase its production but also expanded its product range.
1. Identify the concept used by Samir Gupta through which he was able to steer his company to greater heights.
2. Also explain any three points of importance of this concept. 
          OR
Neeraj Gupta started a company ‘Yo Yo Ltd.’ with ten employees to assemble economical computers for the Indian rural market. The company did very well in its initial years. As the product was good and marketed well, the demand went up. To increase production, the company decided to recruit additional employees. Neeraj Gupta, who was earlier taking all the decisions for the company, had to selectively disperse the authority. He believed that people are competent, capable and resourceful and can assume responsibility for the effective implementation of their decisions. This paid off and the company was not only able to increase its production but also expanded its product range with different features.
1. Identify the concept used by Neeraj Gupta through which he was able to steer his company to greater heights.
2. Also explain any three points of importance of this concept.
Answer : 1. The concept used by Sameer Gupta/ Neeraj Gupta through which he is able to steer his company to greater heights is Decentralisation.
2. The three advantages of using decentralisation are as follows:
♦ Decentralisation helps to promote self-reliance and confidence amongst the subordinates:
♦ Relief to top management:
♦ Quick decision-making: