CBSE Class 12 Business Studies Organising And Staffing Worksheet Set A

ORGANISING is the process of identifying and grouping various activities and bringing together physical, financial and human resources and establishing productive relations among them for the achievement of specific goals.

Steps in the process of organizing

1. Identification and Division of Work – It means dividing total work into specific activities, these activities are then grouped into jobs and assigned to different individuals or departments. This brings specialization and productivity.

2. Departmentalization – In this 2nd step, combine similar or related jobs into larger units called departments. This grouping of activities called departmentalization. E.g. manufacturing department, marketing department etc.

3. Assignment of duties – After forming departments each employee should be placed in their respective positions under a manager and allocate them the duties based on their skill and knowledge.

4. Establishing reporting relationship – Various positions in the organization are arranged in a hierarchy with a clear definition of authority and responsibility. Each employee should know from whom he has to take orders and to whom he is accountable. This will facilitate the smooth functioning of the enterprise.

STEPS IN ORGANISING PROCESS
1 Identification and Division of Work
2 Departmentalization
3 Assignment of duties
4 Establishing reporting relationship

Importance of Organizing

1. Benefits of Specialization – Organizing helps to increase productivity and efficiency due to specialization because it involves division of labour.

2. Clarity in working relation – Organization structure allocates authority and responsibility. It specifies who is to direct whom. It minimizes conflicts and confusion about the respective powers and privileges of managers.

3. Optimum utilization of resources – Organizing helps to avoid duplication of work because specific jobs are assigned to individuals and departments, which leads to optimum utilization of resources.

4. Adaptation to change – A sound organization facilitates adjustments to changes due to changing conditions in the external environment with respect to technology, markets, products etc.

5. Effective administration – Clarity in authority – responsibility relationships, assignment of duties etc. enables the management to effectively administer the activities in the organization.

6. Development of Personnel – Organizing provides creativity among managers. Through delegation of authority, superiors can be engaged in exceptional matters and the lower level managers get an opportunity to develop.

7. Expansion and growth – Organizing helps in the growth and expansion of an enterprise by bringing an order for everything instead of chaos, removes conflict among people over work and creates a suitable environment for team work.

IMPORTENCE OF ORGANISING
1 Benefits of Specialization
2 Clarity in working relation
3 Optimum utilization of resources
4 Adaptation to change
5 Effective administration
6 Development of Personnel
7 Expansion and growth

Organization Structure
Organization structure is the established pattern of relationships among various parts of the enterprise. It states the relationship among various positions and activities. The structure provides a framework for managers and employees for performing their functions. The span of management, to a large extent gives shape to the organizational structure. Span of management refers to the number of subordinates that can be effectively managed by a superior. This determines the levels of management in the structure. A proper organization structure is essential to ensure a smooth flow of communication and better control over the operations of a business enterprise.

Types of Organization Structure
a. Functional Structure – This organization structure is formed on the basis of different functions or work to be done in the enterprise. For example, Production, Marketing, Finance, Human Resource etc.

Advantages
i. Specialization – In this structure, employees perform the same work repeatedly which will lead to specialization and high performance.
ii. Better control and coordination – Since the tasks in a department are similar, this kind of structure promotes better control.
iii. Increased profit – Increased managerial and operational efficiency leads to high profit.
iv. Cost reduction – This structure helps to minimize the duplication of work, so that cost of production can be reduced.
v. Training becomes easier – As focus is only on a specific function, it makes training of employees very easier.
vi. Due attention – It ensures due attention to different functions.

Disadvantages
i. Less importance to organizational interest – This structure gives more emphasis to functional heads or departments. So that only a least importance may be given to the overall objectives of the organization.
ii. Coordination problem – Coordination is quite difficult in this structure, as the information may be passed among various departments.
iii. Interdepartmental conflicts – There may be conflict between two or more departments. E.g., Production department insisting on increase in production may cause difficulties for purchase department to procure materials in time.
iv. Inflexibility in promotion – Functional heads may not get training for top management positions, hence they may not be promoted.

Suitability – Functional Structure is suitable in the following cases:
a. When the size of organization is large.
b. Where there are diversified activities.
c. Where a high degree of specialization is required.
2. Divisional Structure – It is suitable for large organizations having different products or having business in different areas.

Advantages
i. Skill development – Product specialization helps in the development of various skills of the divisional head which makes him suitable for higher positions.
ii. Fixation of responsibility – Divisional head can be made responsible for profit from his product or area.
iii. Quick decisions – Each division functions as an autonomous body, quick decisions can be taken.
iv. Expansion and growth – New divisions can be added without any disturbance to the existing ones.

Disadvantages
i. Conflicts among divisions – Allocation of funds to various divisions is a problem.
ii. Increased cost – Each division is having similar functions, e.g., production, finance, marketing etc. This leads to duplication of activities.
iii. Independent authority is harmful – The divisional manager is independent, so that he can do as he likes.

Suitability – Divisional structure is suitable to:
a. Where a large variety of products are manufactured.
b. Where an organization works in various parts of the country.
c. Where an organization grows and requires more departments.

Comparison – Functional and Divisional Structure

Formal and Informal Organization
Formal Organization
It refers to the structure of relationships deliberately designed by the top management to attain the objectives. Here the responsibility, authority etc. will be specified. Every subordinate is expected to obey his superior in the formal chain of command.
“An organization is formal when the activities of two or more persons are consciously
coordinated towards a common objective.” – Chester Bernard

Features
a. Superior Subordinate relationship – It is well defined in a formal organization and it clarifies as to who has t report to whom.
b. Rules and procedures – It lays down rules and procedures to attain the objectives.
c. Deliberately created – by the top management to facilitate smooth functioning of the organization.
d. Coordination is possible – Efforts of different departments are coordinated.
e. Emphasis on work – It gives priority to the work rather than the individuals.

Advantages
a. Easy to fix responsibility – as the superior subordinate relationship is clearly defined.
b. Avoidance of duplication of work – Since the role of each individual is clearly specified, there is no chance for duplication.
c. Unity of command – Communication through the chain of command ensures unity of command.
d. Accomplishment of goals – In a formal organization, there is a framework for the job to be performed by each employee and it ensures the attainments of goals.
e. Stability – Specific rules, behavior of employees etc. provides stability to the organization.

Disadvantages
a. Procedural delays – it is because the communication is passed through the official chain of command.
b. No creativity – Employees cannot deviate from the rules and procedures laid down by the top management, hence there no chance for creativity.
c. More emphasis on structure and work – It gives importance only to the job but not for human relations.
Informal Organization
Informal organization structure is developed within the formal organization spontaneously. The network of personal and social relationships on the basis of friendship and common interest is called informal organization.

Features
a. It originates from within the formal organization as a result of personal interaction among employees.
b. No official rules and regulations.
c. Independent channel of communication without specified direction.
d. It emerges spontaneously.
e. No definite structure.

Advantages
a. Speedy communication is possible as there is no official chain of command.
b. It fulfills social needs and provides job satisfaction for employees.
c. Supports formal organization – For instance, the reaction of employees towards plans and policies can be tested through informal organization.

Disadvantages
a. Since there is no prescribed line of communication, false news may be spread and its responsibility cannot be fixed on a particular person.
b. If the informal group is strong, they may oppose the plans of top manaement, which will lead to delay in growth of the business.
c. It gives priority to personal interest rather than organizational interest, which will be harmful to the organization.

Differences between formal and informal organization

Delegation of Authority
Delegation means assigning work to others and giving them authority to do it. In other words, it is the downward transfer of authority from a superior to the subordinate. It enables the managers to distribute their workload to others.

Elements of Delegation
1. Authority – Authority means the right of an individual to command his subordinates and to take action within the limits of his position.
2. Responsibility – It means the obligation of a subordinate to perform the duties assigned. It always moves upwards and it cannot be delegated. The authority granted must be in parity with the responsibility otherwise delegation of authority will become ineffective.
3. Accountability – Accountability means answerability for the final outcome of the assigned task. It cannot be delegated and flows upwards. Here a subordinate is accountable to his superior for his performance and at the same time the superior would still be accountable for the outcome.
Authority is delegated – Responsibility is assumed or accepted – Accountability is imposed. Responsibility is derived from authority while accountability is from responsibility.

A comparative study on the elements of delegation

Importance of Delegation
i.Effective management – By entrusting the tasks with subordinates, top executives are able to concentrate on important matters.
ii.Employee development – Through delegation, subordinates get tremendous opportunities to utilize their talents, which will lead to their ultimate development.
iii.Motivation of employees – Delegation motivates the subordinates to improve their performance.
iv.Facilitates growth – Delegation enables workforce to assume more responsibilities and take up leading positions, thus it helps the growth and expansion of the organization.
v.Delegation strictly follows the Managerial Hierarchy.
vi.Better coordination - Delegation ensures proper reporting, which will help to coordinate the activities of different employees and departments.

Decentralization
Decentralization refers to the systematic dispersal of authority to the lower levels oforganization. An organization is said to be decentralized when managers at middle and lower levels are given the requisite authority to take decisions and appropriate actions on matters relating to their respective areas of work. Suppose in a company, all leave applications are approved by the General Manager. When he feels that he is over burdened with this work, he may delegate it to the personnel manager. It is a case of delegation of authority. On the other hand, if the General Manager distributes this work to all the departmental managers, it is an instance of Decentralization.

Importance of Decentralization
i.Reduction of work load of top executives.
ii.Development of personnel
iii.Subordinates will be motivated
iv.Quick decision making
v.Promote initiative and creativity
vi.Better coordination of activities.
vii. Better control (evaluation of actual performance with the standard performance)

Distinction between Delegation and Decentralization

Very Short Questions Answer

Question. How informal organization is created? 
Answer: is created due to friendly and social interaction of employees

Question. To conduct the farewell party of class XII students of the school successful the co-curricular captain student(Boy & Girl) 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 co-curricular incharge teacher. Identify the function of management performed by the co-curricular captain student.
Answer: Organising

Question. What is meant by organisational structure? 
Answer: It is specific pattern of relationships which is created during organizing process OR it is a network of job  ositions, responsibilities and authority of different level.

Question. Name the function of management which coordinates the physical, financial and human resources and establishes productive relations among them for achievement of specific goals.
Answer: Organising function

Question. What is the objectives of decentralization?
Answer: To disperse authority to the lowest level.

Question. the no. of subordinates that can be effectively by a superior refers to which aspect of management?
Answer: span of management

Question. What is functional organisation structure? Write two advantages of this structure.
Answer: Meaning of Functional Structure :- When activities and jobs are grouped on the basis of functions (Finance, Purchases, Research, Production, Marketing, Human Resource) and departments are related to specific function then its is called functional structure. Department heads are responsible to general manager. 
1. Benefit of functional specialization: - In this structure, each department has to perform a specific function only. A worker does similar tasks within a department many times. Each department is headed by a manager who is
expert in that specific function. So all these things create functionalspecialization. 
2. Effective control and coordination:-All members of specific department perform only one function so its is easy to co ordinate and control their activities by a expert of specific function.

Question. State three steps in the process of organisaing. 
Answer: Steps of Organizing Process :- 

Question. Give difference between formal organization and informal organization on the basis of following topic
1. Authority
2. Leadership
3. Flow of communication
4. Behavior
Answer:
1. By position/personal qualities
2. manager are leader/chose by group
3. scalar chain/any direction
4. by rules/no pattern

Question. “An organization is manufacturing medicines, cosmetics, textiles and soaps.
What kind of organizational structure is suitable for this organization and why?
Answer: Divisional structure.
Importance of divisional structure
i. Help in the development of product
ii. Help in fixation of responsibility
iii. Flexibility and initiative

Question. Explain the meaning of ‘Staffing’. 1
Answer: It is a process of providing competent and trained manpower to an organization. In other words, it refers to filling and keeping filled the vacant posts with people.

Question. name the method of training suitable for plumbers, electriation, and iron workers.
Answer: Apprenticeship

Question. Give one advantage of Job Rotation training. 
Answer: This enables the trainee to gain a broader understanding of all parts of the business and how the organisation as a whole functions.

Question. State one objective of Preliminary screening. 
Answer: This interview is conducted to check the confidence level of the candidates.

Question. What do you mean by on the Job Training? 
Answer: When the employee s are trained while they are performing the job, then it is known as ‘On the Job Training’

Question. Explain any three types of selection Test.
Answer: 

Question. Write the difference between training and Development. 
Answer:  

Question. Describe briefly the steps involved in the process of staffing. 
Answer: 

Question. Despite internal sources of recruitment being economical why do companies not always use this source? State any five reasons.
Answer: Limitation of internal sources of recruitment: 
i. incomplete sources
ii. employees may become lethargic
iii. sprit of completion is hampered
iv. reduce productivity

Question. Apple India Ltd is a manufacturer of advanced category of mobile phones. The company trained its engineers from Japan. It market its mobile phones domestically as well as internationally. The company had a substantial market share and had a loyal customer following because of quality of its mobile phone. From the last financial year the company had been unable to achieve its target because of competition in the market. The company is planning to revamp its controlling system, i) Identify the concept of management involved in the above para.
ii) State the steps of the revamped controlling process to be followed by the company to solve this problem.
iii) Also state any one value which the company wants to communicate to the society.
Answer: 
i) Staffing & controlling
ii) Two steps are
a) analyzing deviation
b) taking corrective action
iii) values are (any one):-

MCQs for NCERT Class 12 Business Studies Organising

Question. ________ is more stable organisation.
(a) Formal
(b) Informal
(c) Both (a) and (b)
(d) None

Answer : A

Question. The advantage of formal organization is: ((remembering)
(a) Clarity of responsibility
(b) Fast communication
(c) Rigid policies
(d) Social relationship

Answer : A

Question. Which one is not correct in respect of formal organisation:
(a) Definite responsibility
(b) Definite authority
(c) Effective control
(d) Social popularity

Answer : D

Question. Delegation of authority merely means the granting of authority to subordinates to operate 
(a) Within the prescribed limits
(b) Without any prescribed limits
(c) To any extent
(d) As per post approval of managers

Answer : A

Question. Which one of the following is not a part of process of organisation:
(a) Grouping of activities
(b) Doing complete centralisation
(c) Defining inter-relationship
(d) Knowing the objectives of enterprise

Answer : B

Question. Which is not a feature of formal organisation:
(a) It is personal
(b) It is more stable
(c) It is deliberately created
(d) It is based on rules and procedures

Answer : A

Question. In which organisation structure do we find “group norms”?
(a) Formal
(b) Informal
(c) Both (a) and (b)
(d) None of these

Answer : B

Question. The form of organisation known for giving rise to rumors is called

(a) Centralised organisation
(b) Decentralised organisation
(c) Informal organisation
(d) Formal organisation

Answer : B

Question. Dividing work into smaller and manageable task as a part of
a. departmentalization.
b. i dentification and division of work.
c. Assigning duties.
d. Not assigning duties. 

Answer : B

Question. Grouping of activities in accordance to their nature.
a. division of work
b. departmentalization
c. Specialization
d. decetralization 

Answer : B

Question. It is a limitation of functional structure
a. functional empire
b. decentralization
c. fucntional specialization.
d. create chaos. 

Answer : A

True/False

1. Organising as a function of management responsible for successful implementation of plan. True 
2. Organising clarifies authority and responsibility. True
3. Organising never creates reporting relationship. False
4. Organising never ensures the optimum utilization of resources. False
5. Departmentalisation is not a part of process of organizing. False
6. For effective administration organizing is the primary function. False
7. Establishing reporting system is not the last step of organizing process. False
8. Specialization is not a part of organizing process. False
9. Organising is foremost function of management. False
10.Organising eliminate ambiguity among subordinates. True
11. Delegation allows managers to extend their area of operation. True
12. Delegation is compulsory, decentralization is optional. True
13. Delegation do not allows granting of authority to subordinate. False
14. Responsibility is one of the element of delegation. False

MCQs for NCERT Class 12 Business Studies Staffing

Question. What stage does the requisition of employees occupy in the process of recruitment?
(a) First
(b) Second
(c) Third
(d) Fourth

Answer : A

Question. What do we call keeping the employee temporarily away from the person appointing him?
(a) Demotion
(b) Promotion
(c) Transfer
(d) Lay off

Answer : D

Question. Which source of recruitment is not available to the new organisations?
(a) Internal
(b) External
(c) Both the above
(d) Direct Recruitment

Answer : A

Question. Which is not included in Internal Source of Recruitment?
(a) Transfer
(b) Trade Union
(c) Promotion
(d) Lay-off

Answer : B

Question. ________ is included in Internal Source of Recruitment.
(a) Promotion
(b) Transfer
(c) Both
(d) None of these

Answer : C

Question. ________ is included in External Source of Recruitment.
(a) Advertisement
(b) Employment Exchange
(c) Both
(d) None of these

Answer : C

Question. ________ is that process of examining the applicants which ensures that only the most appropriate persons have been appointed.
(a) Recruitment
(b) Selection
(c) Training
(d) Management

Answer : B

Question. The purpose of ________ interview is to find out whether the applicant is physically and mentally fit for the position.
(a) Preliminary
(b) Employment
(c) Both the above
(d) Collective (or Group)

Answer : A

Question.It refers to the learning opportunities designed to help employees grow 
a) Training
b) development
c)Education
d)Selection

Answer :  B

Fill in the blanks

1. The most popular & cheaper source of recruitment is Internal

2. Frequent transfer of employees will reduce the productivity of employees . 

3. Transfer of clerk from account department to purchase department is Internal recruitment. 

4. Management will get qualified & trained persons by using Extermal recruitment. 

5.Appointment of Unskilled workers & Labourers is frequently done through Private agencies.

6. Appointment of teachers are frequently done through casual callers method of recruitment. 

7. High rank & specific skilled job professional are recruited through Advertisement method of recruitment.

8. Compulsory notification of vacancies by Government institution is required to be done through Employment exchange.

9. In modern era the recruitment of employees like Naukri .com is done through Web publishing

10. By recruiting employees through outside agency it develops competitive spirit among existing employees.

11. Performance appraisal is evaluating an employees current and past performance.

12. Proper feedback of employees workhelps to improve their future productivity.

13. Promotion of employees place them with High responsibility increased.

14. Compensation paid to the employees must be just to satisfy their productivity ,sense of belongingness to the organization.

15. Unemployment rate of the country affects Negative lystaffing function of an organization

• A sound form of organisation is the answer to every business problem, that a poor organisation could run a good product in to the ground and that good organisation with a poor product could run a good product out of the market.

Key points to remember for Chapter 05 Organising

• Steps in the process of organising :
(i) Identification and division of work : The total work is divided into various activities.
(ii) Departmentalisation : The work of same nature are grouped together and assigned to particular department.
(iii) Assignment of duties : The responsibility of each individual or post is decided.
(iv) Establishing reporting relationships : Each individual should also know from whom he has to take orders and to whom he is accountable. It helps in coordination among various departments.

•Importance of organising : It helps in the growth and survival of an enterprise in a dynamic environment by providing the following benefits:
(i) Benefits of specialisations.
(ii) Clarity in working relationships.
(iii) Optimum utilisation of resources.
(iv) Adaptation to changes.
(v) Expansion and Growth.
(vi) Development of personnel.
(vii) Effective administration

• Types of Organisation Structure :

On the basis of Grouping of Activities

I. Functional Structure :
It is formed by grouping of activities of similar nature under one department. Suitability :
(i) Large organizations producing one line of product;
(ii) Organizations which require high degree of functional specialization with diversified activities.

Advantages :
(i) Leads to occupational specialisation.
(ii) Promotes coordination within a department.
(iii) Increases managerial and operational efficiency.
(iv) Leads to economies of scale which reduces cost.
(v) Makes training of employees easier.
(vi) Ensures that different functions get due attention. Disadvantages :
(i) More emphasis on departmental objectives rather than organisational objective.
(ii) Difficulty in inter-departmental coordination.
(iii) Leads to inter-departmental conflicts.
(iv) Leads to inflexibility in functioning of an organisation.

II. Divisional structure :
It is formed by grouping activities related to one product under one department/division. Suitability :
(i) Multi product (Tata, Reliance);
(ii) When an organization grows and needs to add more employees more departments or introduce new level of management.

Advantages :
(i) Leads to product specialisation.
(ii) Helps in fixation of responsibility for divisional performance.
(iii) Promotes flexibility, new initiatives and faster decision making.
(iv) Facilitates expansion and growth of organisation. Disadvantages :
(i) Divisional conflicts over funds allocation.
(ii) Increase in cost due to duplication of work.
(iii) Ignorance of organisational interest.

I. Formal Organisation :
It is a network of jobs and positions with clearly defined functions and relationships, designed by management to accomplish objectives of the enterprise. Features :
(i) Specifies working relationship.
(ii) Means to achieve the objectives of the organisation.
(iii) Coordinates and integrates diverse activities.
(iv) Emphasis on work rather than on interpersonal relationship.
(v) Deliberately created by top management.

Advantages :
(i) Easier to fix responsibility.
(ii) Avoids duplication of efforts.
(iii) Effective accomplishment of goals.
(iv) Stability of the organisation.
(v) Established chain of command.

Disadvantages :
(i) Leads to procedural delays in decision making.
(ii) Does not allow any deviations from rigidly laid down policies.
(iii) Ignores psychological and social needs of the employees.

II. Informal Organisation : It is a network of social relationships among the employees which emerges spontaneously within the formal organisation.

Features :
(i) Originates within the formal organisation.
(ii) Standards of behaviour evolves from the group norms.
(iii) Independent channels of communication are developed by the group members.
(iv) Emerges spontaneously, not deliberately created by the management.

Advantages :
(i) Faster speed of communication.
(ii) Fulfils social needs of the members.
(iii) Fills wide gaps of formal structure.

Disadvantages :
(i) Spreads rumours
(ii) Resists changes
(iii) Peer Pressure

• Elements of Delegation :
(i) Authority :
It is the right of an individual to command his subordinates and to take decisions and actions within the scope of his position.
(ii) Responsibility : It is the obligation of a subordinate to properly perform the assigned duty.
(iii) Accountability : It means being answerable for the final outcome.

• Importance of Delegation :
(i) Effective management : Managers get rid of routine work.
(ii) Employee development : Career prospects of subordinates improve.
(iii) Motivation of employees : Superior’s trust improves employee’s self-esteem and confidence.
(iv) Facilitation of growth : Provides ready workforce for leading positions in new ventures.
(v) Basis of management hierarchy : Establishes superior-subordinate relationship.
(vi) Better co-ordination : Clarifies powers, duties and answerability.

• Importance of Decentralisation :
(i) Develops initiative among subordinates.
(ii) Develops managerial talent for the future.
(iii) Quick decision making.
(iv) Relief to the top management.
(v) Facilitates growth.
(vi) Better control.