CBSE Class 12 Business Studies Organising Worksheet Set C

 

NCERT Solutions for Class 12 Business Studies Chapter 5 Organising Objective Type Questions

Question. Which of the following statement is true with respect to decentralisation
(a) helps to promote self-reliance and confidence amongst the subordinates.
(b) The management hierarchy can be looked upon as a chain of communication.
(c) diminishes the amount of direct supervision exercised by a superior over the activities of a subordinate.
(d) All of the above 
Answer: D

Question. An organisation is ________________when decision-making authority is retained by higher management levels.
(a) Centralised
(b) Decentralised
(c) Both (a) and (b)
(d) None of these 
Answer: A

Question. _______________is the obligation of a subordinate to properly perform the assigned duty.
(a) Authority
(b) Responsibility
(c) Accountability
(d) None of these 
Answer: B

Question. ___________________implies being answerable for the final outcome.
(a) Authority
(b) Responsibility
(c) Accountability
(d) None of these
Answer: C

Question. Which of the following importance of delegation establishes superior-subordinate relationships.
(a) Employee development
(b) Facilitation of growth
(c) Motivation of employees
(d) Basis of management hierarchy 
Answer: D

Question. Which of the following importance of organising reduces the workload as well as enhances productivity
(a) Clarity in working relationships
(b) Benefits of specialisation
(c) Adaptation to change
(d) Effective administration 
Answer: B

Question. Which of the following importance of organising stimulates creativity amongst the managers.
(a) Development of personnel
(b) Optimum utilization of resources
(c) Expansion and growth
(d) None of these 
Answer: A

Question. In ______________________organisation it is easier to fix responsibility since mutual relationships are clearly defined.
(a) Formal
(b) Informal
(c) Both (a) and (b)
(d) None of these 
Answer: A

Question. _____________________ organisation helps to fulfil the social needs of the members and allows them to find like minded people.
(a) Formal
(b) Informal
(c) Both (a) and (b)
(d) None of these
Answer: B

Question. Which of the following is an advantage of functional structure
(a) leads to occupational specialisation
(b) promotes control and coordination within a department
(c) helps in increasing managerial and operational efficiency
(d) all of the above 
Answer: D

Question. Which type of organisational structure is the most suitable when the size of the organisation is large and producing one line of product?
(a) functional
(b) divisional
(c) both (a) and (b)
(d) none of these 
Answer: A

Question. Which of the following is the disadvantage of divisional structure.
(a) Conflict may arise among different divisions with reference to allocation of funds
(b) More emphasis on departmental objectives
(c) Leads to inter departmental conjunct
(d) Leads to inflexibility 
Answer: A

Question. Which type of organisational structure is the most suitable for those business enterprises where a large variety of products are manufactured?
(a) functional
(b) Divisional
(c) both (a) and (b)
(d) none of these 
Answer: B

NCERT Solutions for Class 12 Business Studies Chapter 5 Organising One Word Answer Type Questions

Question. National Viritech 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 with the situation, CEO starts delegating some of his authority to the General Manager, who also felt overburdened. GM also disperses some of his authority to various levels throughout the organisation with the approval of CEO. Identify the concept of management discussed above.
Answer: Decentralisation.

Question. "It refers to the right of an Individual to command his/her subordinates and to take action within the scope of his/her position." What element of Delegation is being explained in the above statement.
Answer: Authority.

Question. "It refers to obligation of a subordinate to properly perform the assigned duty." What element of Delegation is being explained in the above statement.
Answer: Responsibility.

Question. Name the type of ‘Organisational Structure’ which promotes efficiency in utilisation of manpower.
Answer: Functional Structure.

Question. What type of organisational structure will you prefer, if you want flexibility in it.
Answer: Informal organisation. 

Question. "It is a network of jobs and positions with clearly defined functions and relationship." What type of organisational structure is being explained in the above lines.
Answer: Formal Organisational Structure.

Question. Ajanta Foods Ltd. is engaged in the trading of ‘Noodles’. It has its registered office in Kolkata, manufacturing unit in Solan and marketing department at Delhi. Which type of organisational structure the company should adopt to achieve its target?
Answer: Functional Structure.

Question. To make the annual function of the school successful, the principal of the school divided all the activities into task groups each dealing with a specific area like rehearsals, decoration, stage management, refreshments, etc. Each group was placed under the overall supervision of a senior teacher. Identify the function of management performed by the Principal in doing so.
Answer: Organising.

Question. To make the sports day of the school successful, the Headmaster of the school divided all the activities into task groups each dealing with a specific area like holding of events, arrangement of medals, refreshments, etc. Each group was placed under the overall supervision of a senior teacher. The physical education teacher was made responsible for holding different events, the Home Science teacher for refreshments and the Maths teacher for medals. Identify the function of management performed by the Headmaster in doing so. 
Answer: Organising.

Question. An Indian information technology company presently employing 10,000 people, desires to expand its business in manufacturing, trading, etc. It wants to become a global company. To achieve its objectives, it has started shifting from a centralised to a decentralised management system. Identify
71the management function being performed by the company to become a decentralised company. 
Answer: Organising. 

Question. Name the organisational structure which helps in increasing managerial and operational efficiency. 
Answer: Functional Structure.

Question. ‘Himalaya Ltd.’, is engaged in manufacturing of washing machines. The target of the organisation is to manufacture 500 washing machines a day. There is an occupational specialisation in the organisation which promotes efficiency of employees. There is no duplication of efforts in such type of organisation structure. Identify the type of organisation structure described above. 
Answer: Functional Structure.

Question. Identify a suitable organisation structure for a large scale organisation, having diversified activities requiring high degree of specialisation in operations. 
Answer: Functional organisation structure.

Question. Name the type of ‘Organisational Structure’ which promotes flexibility and initiative.
Answer: Divisional 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 co-ordinated, interlinked, authority responsibility and 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.

NCERT Solutions for Class 12 Business Studies Chapter 5 Organising Very short Answer Type Questions

NCERT Solutions for Class 12 Business Studies Chapter 5 Organising Short Answer Type Questions 

Question. What is meant by ‘Divisional Structure’ of an organisation ? State any two advantages. 
Answer: Divisional structure refers to an organisational design which consists of separate business units or divisions. All the divisions have to report to a Divisional Head. Manpower is generally grouped on the basis of different products manufactured. Advantages of Divisional Structure :
(i) Product Specialisation : Divisional structure leads to product specialisations as the Divisional head is able to gain experience in all the functions related to a particular product. This helps in preparing the divisional heads for higher position.
(ii) Greater Accountability : Divisional heads can be held accountable for the profits as the revenues and costs related to different departments can be easily identified and assigned to them. This provides a proper basis for performance measurement.

Question. Distinguish between ‘delegation‘ and ‘decentralization’ on the basis of
(i) Freedom of action
(ii) Status and
(iii) Purpose.
Answer: Distinction between ‘delegation’ and ‘decentralisation’: 

Basis	Delegation	Dencentralisation
Freedom of Action	Delegation involves more control by supe- riors	Decentralisation involves less control over
	leading to less freedom to take own deci- sions by subordinates.	executives leading to greater freedom of action to subordinates.
Status	It is a process followed to share tasks.	It is the result of the policy decision of the top man-agement.
Purpose	The purpose of delegation is to lessen the burden of the manager.	The purpose of decentralization is to increase the role of the subordinates in the organisation by giv-ing them more autonomy.

Question. Distinguish between Delegation and Decentralisation on the basis of
(i) purpose,
(ii) scope,
(iii) status,
(iv) nature. 
Answer: Difference between Delegation and Decentralisation 

S. No.	Basis	Delegation	Decentralisation
(i)	Purpose	To lessen the burden of the managers.	To increase the role of the subordinates in an organisation by giving them more autonomy.
(ii)	Scope	It has a narrow scope as it is limited to the superior and his immediate subordinates.	It has a wider scope. It implies extension of delegation to the lowest level of management.
(iii)	Status	It is a process followed to share tasks.	It is the result of the policy decisions of the top management.
(iv)	Nature	It is a compulsory act because no individual can perform all tasks on his own.	It is an optional policy decision. It is done at the discretion of the top management.

Question. Explain how :
(i) Adaptation to change; and
(ii) Effective administration makes organising important ?
Answer: (i) Adaptation to Change : The process of organising allows a business enterprise to adapt itself according to the changes in the business environment.
(ii) Effective Administration : In organisation structure, the jobs of managers and non-managers are clearly defined, clarity in working relationship enables the proper execution of work. This brings effectiveness in administration.

Question. Rajeev, the owner of Pathways constructions decided to start a campaign to create awareness among people for developing clean surroundings in their area. He formed a team of 10 members to list the different ways for cleaning the surroundings. One suggested to take the help of local residents, another suggestion was to take the help of unemployed youth. After evaluating all options, it was decided to take the help of local residents. To achieve the desired goal various activities were identified like :
(i) Purchase of necessary items like dustbins, garbage bags, brooms, etc.
(ii) Collection of garbage.
(iii) Disposal of garbage, etc. After identification of different activities the work was allocated to different members. Identify the concepts of management involved in the above situation and quote the lines which help in their identification.
Answer: Concepts involved : Planning and Organising Lines for planning : ‘One suggested ……… unemployed youth’ ‘After evaluating ……… local residents’ ‘Campaign to create awareness …. surroundings’ Lines for organising : ‘To achieve ……… disposal of garbage, etc.’ ‘after identification of different activities ……… different members’.

Question. State any three advantages of Formal Organisa-tion. 
OR
State any three advantages of Formal Organisation to a large scale enterprise.
Answer: Advantages of Formal Organisation :
(i) It is easier to fix responsibility since mutual relationships are clearly defined.
(ii) It avoids duplication of efforts since there is no ambiguity in the role that each member has to play.
(iii) It maintains unity of command through an established chain of command.
(iv) It leads to the accomplishment of goals by providing a framework for the operations to be performed.
(v) It provides stability to the organisation because there are specific rules to guide behaviour of the employees.

Question. Bhuvan and Co. are running a shoe manufacturing company successfully. So they planned to expand their business activities by adding more line of products i.e., leather bags, belts and garments. Which type of structure would you recommend after expansion and why ?
Answer: Presently the company has a functional structure since it is a uni-product company but now it will go for divisional structure since it is suitable for a multi-product company.

Question. Samir Gupta started a telecommunication 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 products were good and marketed well, the demand of its products went up. To increase the production, the company decided to recruit additional employees. Samir Gupta, who was earlier taking all decisions for the company had to selectively disperse the authority. He believed that subordinates are competent, capable and resourceful and can assume responsibility for 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.
(i) Identify the concept used by Samir Gupta through which he was able to steer his company to greater heights.
(ii) Also explain any three points of importance of this concept.
Answer: (i) Decentralisation.
(ii) Importance : (a) Develops managerial talent for the future : Even lower level managers learn the art of exercising decision making authority. This prepares them for promotion to higher levels. (b) Quick decision making : Since decisions are taken at levels which are nearest to the point of action without seeking approval from many levels, the process is much faster.
(c) Facilitates growth : It provides greater autonomy to the middle and lower levels of management. It leads to more productivity, higher return, growth and expansion.
(d) Better control : It makes evaluation of performance at each level better. The departments can be individually held accountable for their results.

Question. Distinguish between functional and divisional organisational structure on the following basis:
(i) Formation, (ii) Managerial development,
(iii) Responsibility,
(iv) Suitability.
Answer: 

S. No.	Basis	Functional structure	Divisional Structure
(i)	Formation	It is based upon functions.	It is based upon product lines and is supported by functions.
(ii)	Managerial Development	Difficult, as each function manager has to report to the chief manager.	Easier, autonomy as well as the chance to perform multiple functions which help in managerial development.
(iii)	Responsibility	Difficult to fix on any one department.	Easy to fix responsibility for performance.
(iv)	Suitability	Suitable for medium sized firms having a single product or small number of related products.	Suitable for large firms having multiple products with distinct characteristics.

Question. State any two advantages and two limitations of informal organisation
Answer: Advantages of informal organisation :
(i) It leads to faster spread of information as well a quick feedback.
(ii) It fulfils the social needs of the members.
(iii) It contributes towards fulfilment of organisational objectives by compensating for inadequacies in the formal organisation.
Limitations of informal organisation :
(i) it leads to spread of rumours.
(ii) It may lead to resistance to change.

Question. A.V.M.Ltd. set-up its electric appliances manufacturing factory in a backward area of Himachal Pradesh where subsidies are provided by the government and labour is available at cheaper rates. A.V.M Ltd. was able to produce its products at low cost thereby generating enough profits in the first year itself. It was because of the fact that the limits of authority and responsibility of the employees were clearly defined and the activities of various departments were coordinated and integrated. The Production Manager of the company also came to know about the availability of raw material at cheaper rates from a vendor. For this, he wrote a letter to the Managing Director of the company for getting sanction. But because of procedural delays in getting this sanction and procuring funds from the Finance Manger, the order could not be placed.
(i) Identify the type of organization that led to procedural delays and because of which the company could not get the advantage of procuring raw material at cheaper rates.
(ii) State an advantage of the type of organization identified in above other than those discussed in the above case.
Answer:
(i) Formal organisation.
(ii) Advantage of formal organisation :
(a) It helps to maintain unity of command through an established chain of command.
(b) It leads to effective accomplishment of goals by ensuring that each employee knows the role he has to play.
(c) It provides stability to the organization as behaviour of employees can be fairly predicted.

Question. Aradhana and Gandharv are heads of two different departments in ‘Yumco Ltd.’ They are efficient managers and are able to motivate the employees of their respective departments to improve performance. However, their drive to excel in their own sphere of activity instead of giving emphasis on objectives of the enterprise has hindered the interaction between the departments that Aradhana and Gandharv are heading. Often there are inter-departmental conflicts and they have become incompatible. This has proved to be harmful in the fulfilment of the organisational objectives. The situation has deteriorated to such an extent that the CEO of ‘Yumco Ltd.’ has hired a consultant, Rashmi, to resolve the problem. After studying the situation closely, Rashmi found that the problem has arisen due to inflexibility and a narrow perspective on the part of both Aradhana and Gandharv. She is of the view that this situation is a result of the type of organisational structure ‘Yumco Ltd.’ has adopted. From the above information, identify the organisational structure adopted by Yumco Ltd.’ and state any three advantages of the structure so identified.
Answer: Functional Structure is the organisational structure adopted by ‘Yumco Ltd.’. Advantages of Functional Structure : 
(i) It leads to occupational specialisation since emphasis is placed on specific functions.
(ii) It promotes control and coordination within a department because of similarity in the tasks being performed.
(iii) It increases managerial and operational efficiency.
(iv) It lowers cost as it reduces duplication of effort.
(v) It makes training of employees easier as it focuses on a limited range of skills.
(vi) It ensures that different functions get due attention.

Question. Kiran Industries is a company manufacturing 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.
(i) 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.
(ii) State any two limitations of this framework.
Answer:
(i) Divisional Structure : Reason in support of the answer :
(1) Product Specialisation helps in the development of varied skills in a divisional head and this prepares him for higher positions.
(b) Divisional heads are accountable for profits, as revenues and costs related to different departments can be easily identified and assigned to them.
(c) It promotes flexibility and initiative because each division functions as an autonomous unit which leads to faster decision making.
(d) It facilitates expansion and growth as new divisions can be added without interrupting existing operations by merely adding another divisional head and staff for the new product line.

Question. State any four advantages of formal organisation.
Answer: Advantages of formal organisation :
(i) It is easier to fix responsibility since mutual relationships are clearly defined.
(ii) It avoids duplication of effort since there is on ambiguity in the role that each member has to play.
(iii) It maintains unity of command through an established chain of command
(iv) It leads to accomplishment of goals by providing a framework for the operation to be performed.
(v) If provides stability to the organisation because there are specific rules to guide behaviour of employees. 

NCERT Solutions for Class 12 Business Studies Chapter 5 Organising Long Answer Type Questions

Question. Decentralisation is an important philosophy that implies selective dispersal of authority.’ In the light of this statement, explain any four important points of decentralisation.
OR
Decentralisation plays an important role in an organisation. In the light of this statement, explain any three points of its importance.
OR
With the help of any four points, explain the importance of decentralisation.
Answer: Importance of decentralisation is explained as follows :
(i) Relief to top management : In a decentralised organisation, top managers are not burdened by common day-to-day problems. They have enough time to plan ahead and develop new strategies.
(ii) Develops managerial talent for the future : In a decentralised organisation, even lower level managers learn the art of exercising decision making authority. This prepares them for the promotion to the higher levels.
(iii) Quick decision making : In a decentralised organisation, decision making is not restricted in few hands only but decision power is entrusted with all the managers who perform the activities.
(iv) Develops initiative amongst subordinates :
Decentralisation helps to promote self-reliance and confidence amongst the subordinates. They learn to depend on their own judgement.
(v) Facilitates growth : Decentralisation provides greater autonomy to the lower levels of management as well as divisional or departmental heads. This allows them to function in a manner best suited to their department. Consequently, the productivity levels increase and the organisation is able to generate more returns which can be used for growth and expansion purposes.
(vi) Better control : Decentralisation makes it possible to evaluate performance at each level.
The departments can be individually held accountable for their results.

Question. ‘Organising involves a series of steps in order to achieve the desired goals.’ Explain these steps.
OR
Explain the steps in the process of Organising.
Answer: Organising as a process involves following steps :
(i) Identification and Division of Work : The first step in the organising process is identifying and dividing the whole work into manageable activities, so that duplication of work can be avoided and the burden of work can be reduced.
(ii) Departmentation : Departmentation refers to the process of grouping the activities of similar nature under the same department. Departmentalisation can be done on the basis of function, type of product, territory, etc. It facilitates specialisation in an organisation.
(iii) Assignment of Duties : This implies assigning duties to the workers according to their abilities and competencies. For getting best results, a proper match should exist between the nature of work and ability of the individual.
(iv) Establishing Reporting Relationships : Next step is to allocate authority and responsibility among employees in such a way that each person knows who is reporting to whom and for what, etc.

Question. ‘‘Delegation is the entrustment of responsibility and authority to another and the creation of accountability for performance.’’ Explain the elements of delegation in the light of this statement. Explain authority, responsibility and account-ability as elements of delegation.
Answer: Delegation is the entrustment of responsibility and authority to another and the creation of accountability for the performance. The essential elements of delegation are :
(i) Authority :
(a) It refers to the right of an individual to command her/his subordinates and to take action within the scope of her/his position.
(b) It arises from the established scalar chain which links the various job positions and levels of an organisation.
(c) It flows from top to bottom.
(ii) Responsibility :
(a) It is the obligation of a subordinate to properly perform the assigned duty.
(b) It arises from a superior-subordinate relationship.
(c) It flows upwards.
(iii) Accountability :
(a) It implies being answerable for the final outcome.
(b) It cannot be delegated.
(c) It flows upwards.

Question. Interaction among people at work gives rise to a network of social relationships among employees. This relationship emerges when people interact beyond their officially defined roles. When people have frequent contacts, they cannot be forced into a rigid formal structure. Rather, based on their interaction, and friendship, they tend to form groups which show conformity in terms of interest. Name the form of relationships mentioned in the above lines and state its any four characteristics.
Answer: Informal organisation : Characteristics of Informal organisation are :
(i) It originates from within the formal organisation.
(ii) It emerges spontaneously and is not deliberately created by the management.
(iii) The standards of behaviour evolve from group norms.
(iv) Independent channels of communication are developed by group members.
(v) It has no definite structure or form.

Question. A company has been registered under the Companies Act with an authorised Share Capital of ₹ 20,000 crore. Its registered office is situated in Delhi and manufacturing unit in a backward district of Rajasthan. Its marketing department is situated in Bhopal. The company is manufacturing Fast Moving Consumer Goods (FMCG).
(i) Suggest with the help of a diagram a suitable organisation structure for the company.
(ii) State any three advantages of this organisation structure.
Answer: (i) Divisional Structure : 

(ii) Advantages of Divisional Structure :
(a) Product specialisation helps in the development of varied skills.
(b) Helps in fixation of responsibility.
(c) Promotes flexibility as each division is autonomous.
(d) Facilitates expansion and growth.

Question. State any five points which highlight the importance of delegation of authority.
OR
What is meant by ‘Delegation’ ? State any four points which highlight the importance of delegation in an organisation.
OR With the help of any four points, explain the importance of ‘Delegation’ in an organisation.
OR ‘Delegation is a key element in effective organising’. How ? State by giving any six reasons.
OR
‘Delegation of Authority’ is necessary in all types of organisations ? Explain any four reasons in support of your answer.
OR
What is meant by ‘Delegation of Authority’? Explain any four points of importance of delegation of authority. 
Answer: Delegation of authority refers to the downward transfer of authority from a superior to a subordinate. Its main elements are authority, responsibility and accountability. Importance of delegation—
(i) Effective Management : By delegating routine work to the subordinates, the managers get more time to concentrate on important matters and excel in new areas efficiently.
(ii) Employee Development : Delegation empowers the employees by providing them the chance to use their skills, gain experience and develop themselves for higher position.
(iii) Motivation of employees : Responsibility for work builds the self-esteem of an employee and improves confidence. He/She feels encouraged and tries to improve his/her further performances.
(iv) Facilitation of growth : Trained and experienced employees are able to play significant roles in the launch of new projects by replicating the work ethos they have absorbed from existing units, in the newly set unit.
(v) Basis of management hierarchy : Delegation of authority establishes superior-subordinate relationships, which are the basis of managerial hierarchy.
(vi) Better coordination : Clarity in powers, duties and answerability helps in developing and maintaining
effective coordination amongst the departments, levels and functions of management.

Question. A company is manufacturing washing machines. There is a well defined system of jobs with a clear and definite authority, responsibility and account-ability in the company. But people are not allowed to interact beyond their officially defined roles. As a result, the company is not able to adapt to the changing business environment. The workforce is also not motivated due to lack of social interaction. The company is facing problems of procedural de-lays and inadequate recognition to creative talents.
(i) Suggest how the organisation can overcome the problems faced by it.
(ii) Give any two benefits it will derive from your suggestion. 
Answer:
(i) Introduction of informal organisation.
(ii) Two benefits the firm will derive are :
(a) Faster spread of communication and quick feedback.
(b) It helps to fulfil the social needs of the members and enhances their job satisfaction.
(c) Fulfilment of organisational objectives.

Question. Differentiate between ‘Functional’ and ‘Divisional’ structure of organizing on the basis of the following :
(i) Meaning
(ii) Formation
(iii) Specialisation
(iv) Responsibility
(v) Managerial development
(vi) Cost involved
(v) Proper attention : It ensures that different functions get due attention.
(vi) Ease in training employees : It makes training of employees easier as the focus is only on a limited range of skills. Disadvantages or Limitations :
(i) Functional empires : A functional structure places less emphasis on overall organisation than the departmental objectives. Such practices may lead to functional empires and the importance of a particular function (or department) may be over-emphasised.
(ii) Problems in co-ordination : Pursuing depart-mental interest at the cost of organisational interests can also hinder the interaction between two or more departments. It may lead to problems in co-ordination among different departments.
(iii) Conflict of interests : A conflict of interests may arise among departments when the interests of two or more departments are not compatible.
(iv) Inflexibility : It may lead to inflexibility as people with same skills and knowledge base may develop a narrow perspective and thus have difficulty in appreciating each others point of view.
OR
Differentiate between Functional structure and Divisional structure.
Answer: Difference between Functional and Divisional Structure. 

S. No.	Basis	Functional Structure	Divisional Structure
(i)	Meaning	Grouping of entire work into major functional departments is known as functional structure.	Grouping the jobs related to one product and organising them under a department creates a divisional structure.
(ii)	Formation	Formation is based on functions.	Formation is based on product lines and is supported by functions.
(iii)	Specialisation	Functional specialisation.	Product specialisation.
(iv)	Responsibility	Difficult to fix on a department.	Easy to fix responsibility for performance.
(v)	Managerial Development	Difficult, as each functional manager has to report to the top management.	Easier, autonomy as well as the chance to perform multiple functions helps in managerial development.
(vi)	Cost involved	Functions are not duplicated, hence economical.	Duplication of resources in various departments, hence costly.

Question. Anoop Gaur started ‘Cats Eye’, a company for providing cyber security solutions to businesses. Its objective is to prevent, detect 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 Science and Technology. While working on the project, he found that the volume of work made it impractical for him to handle all liaison with an engineering college in the State. During a campus placement, Aarav and Pranshi were appointed to work for the new project. He found the new employees were capable, enthusiastic and trustworthy. Anoop Gaur was thus, able to focus on the objectives and with the help of Aarav and Pranshi, the project was completed on time. Not only this, Anoop Gaur was also able to extend his area of operations. On the other hand, Aarav and Pranshi also got opportunities to develop and exercise initiative.
(i) Identity and explain briefly the concept used by Anoop Gaur in the above case which helped him in focusing on the objectives.
(ii) Also, explain any four points of importance of the concept identified in part (a).
Answer: Delegation : It refers to the downward transfer of authority from a superior to a subordinate. Importance of delegation :
(i) Effective Management : By delegating routine work to subordinates the managers are able to get more time to concentrate on important matters and excel in new areas efficiently.
(ii) Employee Development : Delegation empowers the employees by providing them the chance to use their skills, gain experience and develop themselves for higher position.
(iii) Motivation of employees : Responsibility for work builds the self-esteem of an employee and improves confidence. He/she feels encouraged and tries to improve his/her performance further.
(iv) Facilitation of growth : Trained and experienced employees are able to play significant roles in the launch of new projects by replicating the work ethos they have absorbed from existing units, in the newly set unit.
(v) Basis of management hierarchy : Delegation of authority establishes superior-subordinate relationships, which are the basis of managerial hierarchy.
(vi) Better coordination : Clarity in powers, duties and answerability helps in developing and maintaining effective coordination amongst the departments, levels and functions of management.

Question. With the help of any four points, explain the crucial role of ‘Organising’ function in an enterprise.
Answer: The importance of organising can be described as follows :
(i) Benefits of Specialisation : In organising, the whole work is divided into manageable activities and systematic allocation of work is done. It increases productivity and the efficiency of workers. As a result, due to repetitive work, workers get experience in particular fields which leads to specialisation.
(ii) Adaptation to changes : It facilitates business enterprise to accommodate changes in the
workload caused by business environment. In case of change, organisation paves the way for revision of relationships at organisational levels.
(iii) Clarity in working relationships : Authority and responsibility are clearly defined in such a way that every person knows as to who is reporting to whom and for what, etc.
(iv) Optimum utilisation of resources : Proper allocation of resources helps in avoiding overlapping of work and ensures optimum use of all human, physical and financial resources.
(v) Effective Administration : By clearly describing the jobs related duties, duplication of work and confusion can be avoided in the organisation. Thus, it ensures effective administration.
(vi) Development of the personnel : Delegation of authority reduces the work load of a manager and enables him to explore new areas of growth for his organisation. It enables the subordinates to effectively deal with the challenges and to realise their full potential.
(vii) Expansion and growth : Organising enables an enterprise to take up new challenges. For example, more job positions, departments, new product lines, new geographical territories, etc. to increase sales/profits, market share and growth of the enterprise.

Question. What is meant by “Divisional Structure” of an organisation ? For which type of business enterprise is this structure most suitable ? State any four advantages of this form of organisational structure.
Answer: Divisional structure is an organisational structure comprising of separate business units or divisions. It is suitable for those enterprises :
(i) Where two or more products are manufactured.
(ii) When an organisation grows and diversifies. Advantages of divisional structure :
(i) Product specialisation helps in the development of varied skills.
(ii) It helps in the fixation of responsibility as divisional heads who are accountable for profits, revenues and costs related to their departments.
(iii) It promotes flexibility, initiative and faster decision making as each division is an autonomous unit.
(iv) It facilitates expansion and growth as new divisions can be added without interrupting the existing operations.
(v) It reduces the problem of coordination between departments as all activities concerning a particular product line are integrated together.

Question. Differentiate between Formal and Informal Organisation on the basis of the following :
(i) Meaning
(ii) Origin
(iii) Authority
(iv) Behaviour
(v) Flow of Communication and
(vi) Leadership AE [Delhi Comptt.
OR
Distinguish between Formal organization and Informal organization.
Answer: 

S. No.	Basis	Formal Organisation	Informal Organisation
(i)	Meaning	It refers to the well defined structure of authority and responsibility created by the management.	It refers to the network of social relationships arising out of interaction among employees .
(ii)	Origin	It is deliberately created through a well defined policy of management.	It arises as a result of social interaction among the employees.
(iii)	Authority	Authority arises on the basis of position of management.	Authority arises on the basis of personal qualities.
(v)	Behaviour	Standards of behaviour are laid down by rules.	No set of behavioural pattern.
(v)	Flow of communication	Communication takes place through the scalar chain.	Communication does not take place through a planned route, it can take place in any direction.
(vi)	Leadership	Managers are leaders.	Leaders may or may not be managers. They are chosen by the group.
(vii)	Nature	Formal organisation structure is rigid in nature as it is formed deliberately.	Informal organisation structure is flexible in nature as there is no set behaviour pattern or rules and regulations and employees can change their friendly and social group whenever they desire.

Question. What is meant by ‘Informal Organisation’ ? State the features of informal organisation.
OR
Give the meaning of informal organisation and state any five features of it.
Answer: Informal organisation is a network of personal and social relations not established by the formal organisation but arising spontaneously due to people associating themselves with one another. Features of Informal Organisation are :
(i) Origin : It originates within the formal organisation.
(ii) Formation : It emerges spontaneously and is not deliberately created by the management.
(iii) Behaviour : The standards of behaviour evolve from group norms.
(iv) Communication : Independent channels of communication are developed by group members.
(v) Structure : It has no definite structure or form.

Question. What is meant by ‘Formal Organisation’ ? State any three advantages and any two limitations of ‘Formal Organisation’. 
Answer: Formal organisation refers to the organisation structure which is designed by the management to accomplish its objectives. Advantages :
(i) It is easier to fix responsibility since mutual relationships are clearly defined.
(ii) It avoids duplication of effort since there is no ambiguity in the role that each member has to play.
(iii) It maintains unity of command through an established chain of command.
(iv) It leads to the accomplishment of goals by providing a framework for the operations to be performed.

Question. What is meant by ‘Functional Structure’ of organisation ? Explain its any two advantages and two limitations.
OR
What is meant by ‘Functional Organisational Structure’ ? State any two advantages and two disadvantages of such structure.
Answer: Functional structure of organisation means an organisational structure which is formed by grouping jobs of similar nature or functions and organising such functions into separate departments such as production, marketing, finance, etc. Advantages :
(i) Specialisation : A functional structure leads to occupational specialisation since emphasis is placed on specific functions.
(ii) Efficiency : It helps in increasing managerial and operational efficiency and this result in increased profit.
(iii) Minimises costs : It leads to minimum duplication of effort which results in economies of scale and thus reduces cost.
(iv) Better control and coordination : It promotes control and coordination within a department because of similarity in the tasks being performed.

Question. The functional structure of organisation has certain advantages and disadvantages which an enterprise must take into consideration before adopting it. Explain any such three advantages and any three disadvantages of this structure 
Answer: Advantages of Functional Structure :
(i) Leads to occupational specialisation
(ii) Promotes control and coordination
(iii) Increases efficiency
(iv) Low cost
(v) Makes training easier
(vi) Due attention to different functions
Disadvantages of Functional structure are :
(i) Creation of functional empires
(ii) Problems in coordination
(iii) Inter-departmental conflicts
(iv) Lack of accountability
(v) Inflexibility
(vi) Restriction in managerial development
(v) It provides stability to the organisation because there are specific rules to guide behaviour of the employees. Limitations :
(i) It may lead to procedural delays as the established chain of command has to be followed which increases the time taken for decision making.
(ii) Poor organisation practices may not provide adequate recognition to creative talent, since it does not allow any deviations from rigidly laid down policies.
(iii) It is difficult to understand all human relationships in an enterprise, as it places more emphasis on structure and work.