2nd PUC Business Studies Question Bank Chapter 5 Organising

   

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Karnataka 2nd PUC Business Studies Question Bank Chapter 5 Organising

2nd PUC Business Studies Organising Text Book Exercises

2nd PUC Business Studies Organising Multiple Choice Questions With Answers

Question 1.
Which of the following is not an element of delegation?
(a) Accountability
(b) Authority
(c) Responsibility
(d) Informal organisation
Answer:
(d) Informal organisation is not an element of delegation.

Question 2.
A network of social relationship that arise spontaneously due to interaction at work is called
(a) formal organisation
(b) informal organisation
(c) decentralisation
(d) delegation .
Answer:
(b) Informal organisation implies social interaction amongst people.

Question 3.
Which of the following does not follow the scalar chain?
(a) Functional structure
(b) Divisional structure
(c) Formal organisation
(d) Informal organisation
Answer:
(d) Informal organisation does not follow the scalar chain.

Question 4.
A tall structure has a
(a) narrow span of management
(b) wide span of management
(c) no span of management
(d) less levels of management
Answer:
(a) A tall structure has a narrow span of management.

Question 5.
Centralisation refers to
(a) retention of decision making authority
(b) dispersal of decision making authority
(c) creating divisions as profit centres
(d) opening new centres or branches
Answer:
(a) Centralisation implies concentration of all decision making functions at the apex of the management.

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Question 6.
For delegation to be effective, it is essential that responsibility be accompanied with necessary
(a) Authority
(b) manpower
(c) incentives
(d) promotions
Answer:
(a) Authority refers to the right of an individual to command his subordinates Thus, it is essential that responsibility be accompanied with necessary authority.

Question 7.
Span of management refers to
(a) number of managers .
(b) length of term for which a manager is appointed
(c) number of subord inates under a superior
(d) number of members in top management
Answer:
(c) Span of management is the number of subordinates under a superior.

Question 8.
The form of organisation known for giving rise to rumours is called
(a) centralised organisation
(b) decentralised organisation
(c) informal organisation
(d) formal organisation
Answer:
(c) As in informal organisation, excess of interactions among people giving rise to rumours.

Question 9.
Grouping of activities on the basis of product lines is a part of
(a) delegated organisation
(b) divisional organisation
(c) functional organisation
(d) autonomous organisation
Answer:
(b) Divisional organisation implies grouping of activities on the basis of product lines.

Question 10.
Grouping of activities on the basis of functions is a part of
(a) decentralised organisation
(b) divisional organisation
(c) functional organisation
(d) centralised organisation
Answer:
(c) Functional organisation implies grouping of a activities on the basis of functions

2nd PUC Business Studies Organising Short Answer Type Questions With Answers

Question 1.
Define ‘Organizing’.
Answer:
Organising is the second function of management. Organising is the process of identifying and grouping the activities of the enterprise and establishing authority and relationship among them, (or) According to Henry Fayol “To organise a business is to provide it with everything, useful to its functioning – raw material, machines, tools, capital and personnel”.

Question 2.
What are the steps in the process of organising?
Answer:
Identification & Division of work.

Question 3.
Discuss the elements of delegation.
Answer:
There are three elements of delegation.

  1. Granting the authority to the subordinates
  2. Assigning responsibility to subordinates
  3. Accountability among subordinates.

Authority: Authority is the power to command employees and instruct them to perform a job. It flows from top to bottom. The subordinates execute the given jobs as per the instructions of the superior. Authority is always restricted by rules and regulation of the organization.

Responsibility: Responsibility is the obligation of a subordinate to perform the assigned duty. The responsibility flows upwards. It includes all the physical and mental activities to be performed by the employee for a job. Delegation starts when the superior transfers some of his responsibility to the subordinates.

Accountability: It is the obligation on the part of the subordinates to perform the assigned duties as expected by the managers. For this purpose, accountability is created. Accountability means being answerable for the final results. Accountability can never be delegated.

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Question 4.
What does the term ‘Span of management’ refer to?
Answer:
It is the number of subordinates under a superior or we can say, it means how many employees can be effectively managed by a superior. The span of management, to a large extent gives shape to the organisational structure, e.g., if the number of subordinates under a superior keep increasing when we move downward, then the shape of the organisational structure will be as follows.
2nd PUC Business Studies Question Bank Chapter 5 Organising - 1

Question 5.
Under what circumstances would functional structure prove to be an appropriate choice?
Answer:
Functional structure would prove to be most suitable when the size of the organisation is large, has diversified activities and operations that require a high degree of specialisation. If promotes control and co-ordination within a department, increased managerial and operational efficiency, results in increased profits.

Question 6.
Draw a diagram depicting a divisional structure.
Answer:
Diagram of divisional structure
2nd PUC Business Studies Question Bank Chapter 5 Organising - 2

Question 7.
Can a large sized organisation be totally centralised or decentralised? Give your opinion.
Answer:
No large organisation can not be totally centralised or decentralised. Complete centralisation would imply concentration of all decision making functions at the apex of the management hierarchy. Such a scenario would obviate the need for a management hierarchy.

On the other hand, complete decentralisation would imply the delegation of all decision making functions to the lower level of the hierarchy and this would finish off the need for higher, managerial positions. Both the situations are unrealistic.

As an organisation grows in size and complexity, there is a tendency to move towards decentralised decision making. This is because, in large organisations those employees, who are directly and closely involved with certain operations tend to have more knowledge about them than the top management, which may only be indirectly associated with individual operations. Hence, there is a need for balance between these co-existing forces.

Question 8.
Decentralisation is extending delegation to the lowest level. Comment.
Answer:
Decentralisation is extending delegation to the lowest level Decentralisation explains the manner in which decision making responsibilities are divided among hierarchical levels. Decentralisation refers to delegation of authority through all the levels of the organisation.

Decision making authority is shared with lower levels and is consequently placed nearest to the point of action. In other words, decision making authority is pushed down the chain of command. Delegation is the process and decentralisation is the end result, e.g., If the director give the responsibility to production head to complete the target of20,000 units and authorise him to hire the workers, production head further shares his responsibility with manager to select the worker.

Manager shares his responsibility with supervisors, who are dealing with workers, authorise them to select workers. Here, the responsibility gets distributed at every level. That’s why we

say systematic delegation leads to decentralisation.

2nd PUC Business Studies Organising Long Answer Type Questions With Answers

Question 1
Why is delegation considered essential for effective organising?
Answer:
Effective delegation leads to the following benefits
1. Effective Management : By empowering the employees, the managers are able to function more efficiently as they get more time to concentrate on important matters. This makes the working of all the levels effective and efficient.

2. Employee Development: As a result of delegation, employees get more opportunities to utilise their talent and this may give rise to talent abilities in them. It makes them better leaders and decision makers. Delegation empowers the employees by providing them with the chance to use their skills, gain experience and develop themselves for higher positions.

3. Motivation of Employees: Delegation helps in developing the talents of the employees. It also has psychological benefits. Responsibility’ for work builds the self-esteem of an employee and improves his confidence. He feels encouraged and tries to improve his performance further.

4. Facilitation of Growth: Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures. Trained and experienced employees are able to play significant roles in the launch of new’ projects.

5. Basis of Management Hierarchy: Delegation of authority establishes superior- subordinate, which management. The extent of delegated are the basis of hierarchy of authority also decides the power that each job position enjoys in the organisation.

6. Better Coordination: Due to delegation, work, duties, power all becomes very clear. This helps to avoid overlapping of duties and duplication of effort as it gives a clear picture of the work being done at various levels. Such clarity in reporting relationships help in developing and maintaining effective coordination amongst the departments, levels and functions of management.

Question 2.
What is a divisional structure? Discuss its advantages and limitations.
Answer:
A divisional structure comprises of separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit. Generally, manpower, is grouped on the basis of different products manufactured.
Merits
1. Skill Development: Product specialisation helps in the development of varied skills in a divisional head and this prepares them for higher positions as they gain experience in all functions.

2. Accountability: Divisional heads are accountable for profits, as revenues and costs related to different departments can be easily identified and assigned to them. This provides proper basis for performance measurement.

3. Quick decision making: It promotes flexibility and initiative because each division functions as an autonomous unit which leads to faster decision making.

4. Facilitates Expansion: It facilitates growth as new divisions can be added without interrupting the existing operations, by merely adding another divisional head and staff for the new product line.

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Demerits
The divisional structure has certain disadvantages
1. Conflicts: Conflicts may arise among different divisions with reference to allocation of funds.

2. Higher cost: Providing each division with separate set of similar functions increases expenditure.

3. Ignoring organisational goals : It provides managers with the authority to supervise all activities related to a particular division. In course of time, sucn a manager may gain power and in a bid to assert his independence may ignore organisational interests.

Question 3.
Decentralisation is an optional policy. Explain why an organisation would choose to be decentralised.
Answer:
Decentralisation is much more than mere transfer of authority to the lower levels of management hierarchy. Its importance can be understood from the following points
1. Develops Initiative among subordinates: When lower managerial levels are given freedom to take their own decisions they learn to depend’ on their judgement. A decentralised policy helps to identify those executives, who have the necessary potential to become dynamic leaders.

2. 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. It gives them a chance to prove their abilities and creates a reservoir of qualified manpower.

3. Quick decision making: 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.

4. Relief to top Management: Decentralisation leaves the top management with more time, which they can devote to important policy decisions rather than occupying their time with both policy as well as operational decisions.

5. Facilitates growth: Decentralisation awards 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 and develops a sense of competition amongst the departments. Consequently, the productivity levels increase and the organisation is able to generate more returns, which can be used for expansion purposes.

6. Better control: Decentralisation makes it possible to evaluate performance at each level and the departments can be individually held accountable for their results. The extent of achievement of organisational objectives as well as the contribution of each department in meeting the over all objectives can be ascertained.

Question 4.
How does informal organisation support the formal organisation?
Answer:
The informal organisation offers many benefits Important among them are given as follows
1. Quick feedback: Prescribed lines of communication are not followed. Thus, the informal organisation leads to faster spread of information as well as quick feedback.

2. Social needs: It helps to fulfill 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.

3. Organisational objectives: It contributes towards fulfilment of organisational objectives by compensating for inadequacies in the formal organisation e.g., feedbacks on new policies etc can be tested through informal network.

Question 5.
Distinguish between centralisation and decentralisation.
Answer:
Difference between centralisation and decentralisation
2nd PUC Business Studies Question Bank Chapter 5 Organising - 3

Question 6.
How is a functional structure different from a divisional structure?
Answer:
Difference between functional and divisional structure.
2nd PUC Business Studies Question Bank Chapter 5 Organising - 4

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2nd PUC Business Studies Organising Case Problems

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 1.
Prepare a report regarding organisation structure giving concrete reasons with regard to benefits the company will derive from the steps it should take.
Answer:
In the given situation, organisation should shift from functional structure to divisional structure as the company wants to diversity, by adding a new product line. The reasons and benefits are

  • The performance of each unit can be easily assessed,
  • New product lines can be easily added without disturbing the existing units.
  • Decision making is faster.
  • Divisional structure maintains short line of communication with customers and provide better services to them.

Question 2.
A company manufacturing sewing machines set up on 1945 by the British promoters follows formal organisation culture in totality. It is facing a lot of problems in delays in decision making. 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 involves red tape. Employee turnover is high. Its market share is also declining due to changed circumstances and business environment.

You are to advise the company with regard to change it should bring about its organisation structure to overcome the problems faced by it. Give reasons in terms of benefits it will derive from the changes suggested by you. In which sectors can the company diversify, keeping in mind the declining market for the product the company is manufacturing?
Answer:
The suggestions are as follows :
1. To overcome the limitations of formal organisation, the management should encourage workers to interact and socialise with each other through get together outings. In this way, everyone will interact and like minded people will come closer. The net result will be more satisfied workforce.

2. The management should try to decentralise organisation structure.

3. The suggested area where the business can be diversified is textile machineries like embroidery units, sequencing units, buttoning units.

Question 3.
A company X limited manufacturing comsetics, which has enjoyed a pre-eminent 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.

What organisational structure changes should the company bring about in order to retain its market share? How will the changes suggested by you help the firm? Keep in mind that the sector in which the company is FMCG
Answer:
The company X Ltd is working in a centralised way, which is not giving enough time to the higher officials to think of better policies, strategies to handle the changes in the changing environment. The company should thus get decentralised so that the routine type of work, Involving minor decisions can be looked after by the lower levels. This will give/save more time for the directors and divisional heads to plan strategies to fight with competition.

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2nd PUC Business Studies Organising Additional Questions

2nd PUC Business Studies Organising One Mark Questions and Answers

Question 1.
Give the meaning of organizing.
Answer:
Organizing is the process of identifying, grouping the work to be performed for the people to work most efficiently together to achieve the objectives (or) defining and delegating authority and responsibility and establishing relationship among them for accomplishment of specific objectives.

Question 2.
Name any one type of organization structure.
Answer:
Functional structure

Question 3.
Give the meaning of formal organization,
Answer:
Formal organization is one which has a system of well defined Positions, Authority, responsibility, Policies, Principles etc.

Question 4.
Give the meaning of informal organization.
Answer:
Informal organization refers to the relationship between the people in the organization based on the personal attitude, prejudices, likes & dislikes etc.

Question 5.
Write any one element of delegation.
Answer:
Authority or Responsibility or Accountability.

Question 6.
Give the meaning of centralization.
Answer:
It refers to the concentration of authority of decision making by top level managers is called centralization.

Question 7.
State any one importance of organizing.
Answer:
Effective administration or Optimum Utilization of resources.

Question 8.
State any one suitability of functional organizational structure.
Answer:
Functional structure is suitable when the Size of the organization is large

Question 9.
State any one suitability of divisional organizational structure.
Answer:
Divisional structure is suitable when Organization have Centralized authority.

Question 10.
Give the meaning of authority.
Answer:
Authority is the power to command employees and instruct them to perform a job.

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Question 11.
State the importance of delegation.
Answer:
Better coordination & Quick decision making.

Question 12.
Name any one type of organisation structure.
Answer:
(a) Functional Structure
(b) Divisional Structure

Question 13.
Give the meaning of formal organisation.
Answer:
Formal organisation refers to structure of well-defined jobs each bearing a definite measure of authority, responsibility and accountability.

Question 14.
Give the meaning of centralisation.
Answer:
Centralisation refers to concentration of authority at top level for decision making with one or few manager.

Question 15.
Give the meaning of decentralisation.
Answer:
Decentralisation means dispersal of authority to take decision to the lower levels of organization.

Question 16.
What is meant by departmentalisation?
Answer:
The process of grouping the activities of similar nature under same department is known as Departmentalisation.

Question 17.
What is delegation?
Answer:
Delegation is a process of transferring authority from a superior to his subordinate.

Question 18.
State any one advantages of functional organisation structure.
Answer:
It helps in increasing managerial and operational efficiency

Question 19.
State any one limitation of functional organisation structure.
Answer:
Inflexibility

Question 20.
State any one limitation of divisional organisation structure.
Answer:
Increase in costs

Question 21.
State any one advantages of divisional organisation structure.
Answer:
Product specialisation

Question 22.
State any one advantages of formal organisation.
Answer:
It is easier to fix responsibility

Question 23.
State any one limitation of divisional organisation.
Answer:
Delay in decision making.

Question 24.
State any one feature of informal organization
Answer:
An informal organization originates from within the formal organization.

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2nd PUC Business Studies Organising Two Marks Questions and Answers

Question 1.
What is functional structure of an organization?
Answer:
Grouping the jobs based on similar nature and organizing them different departments isknown as functional structure. The functional structure enforces a clear chain of command within the organization. Here top level management act as a primary decision maker.

Question 2.
What is divisional structure of an organization?
Answer:
Grouping the activities on the basis of product is known as divisional Structure. The large organizations which have more than one product have this kind of organizational structure.

Question 3.
What is delegation?
Answer:
Delegation is the process of transferring authority from a superior to his subordinate. Delegation of authority is necessary for the smooth functioning of a business.

Question 4.
What is decentralization?
Answer:
Decentralization refers to even & systematic distribution of decision making power to lower level management. Decentralization motivate subordinates & increase their morale & team spirit as they are involved in decision making.

Question 5.
State any two importance of organizing?
Answer:
The importance of organizing are: Effective administration, Optimum Utilization of resources.

Question 6.
State any two differences between formal & informal organization?
Answer:
2nd PUC Business Studies Question Bank Chapter 5 Organising - 5

Question 7.
State any two importance of decentralization of authority.
Answer:
Importance of Decentralization are

  1. Reduces work load,
  2. Quick Decision Making

Question 8.
What is centralization of authority?
Answer:
It refers to the concentration of authority of decision making by top level managers is called centralization.

Question 9.
Give the meaning of organisation structure
Answer:
The organisation structure can be defined as the framework within which managerial and operating tasks are performed. It specifies the relationships between people, work and resources.

Question 10.
State any two importance of organisationing.
Answer:
a. Benefits of Specialisation
b. Clarity in Working Relationships

Question 11.
Define formal organisation
Answer:
According to Brown “Formal organisation refers to structure of well-defined jobs each bearing a definite measure of authority, responsibility and accountability”.

Question 12.
Define informal organisation
Answer:
According to Keith Davis “Informal organisation refers to the relationship between the people in the organisation based on the personal attitudes, likes and dislikes etc”.

Question 13.
Define Delegation
Answer:
According to Haimman “Delegation of authority merely means the granting of authority to subordinates to operate within prescribed limits”

Question 14.
Name any two basis for departmentalisation.
Answer:
a. On the basis of territory
b. On the basis of function
c. On the basis of type of product manufactured

Question 15.
Name any two element of delegation.
Answer:
a. Authority
b. Responsibility

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Question 16.
State any two advantages of functional organisation structure.
Answer:
a. Promotes efficiency in utilisation of manpower
b. It helps in increasing managerial and operational efficiency

Question 17.
State any two limitation of functional organisation structure.
Answer:
a. Inflexibility
b. Problems incoordination

Question 18.
State any two limitation of divisional organisation structure.
Answer:
a. Increase in costs
b. Ignorance organisational interests

Question 20.
State any two advantages of divisional organisation structure.
Answer:
a. Product specialisation
b. Facilitates expansion and growth

Question 21.
State any two advantages of formal organisation.
Answer:
a. It is easier to fix responsibility
b. Provides stability to the organisation

Question 22.
State any two limitation of divisional organisation.
Answer:
a. Delay in decision making.
b. Does not provide a complete picture

Question 23.
State any two feature of informal organization
Answer:
a. Formal communication channel is used.
b. It is created to achieve predetermined objectives.

Question 24.
State any two difference between delegation and decentralisation
Answer:
2nd PUC Business Studies Question Bank Chapter 5 Organising - 6

Question 25.
State any two difference between authority and responsibility Answer:
Answer:
2nd PUC Business Studies Question Bank Chapter 5 Organising - 7

Question 26.
Give the meaning of authority.
Answer:
Authority refers to the right of a superior to command his subordinates. It arises from formal position of individual.

Question 27.
Give the meaning of responsibility.
Answer:
Responsibility is the obligation of a subordinate to properly perform the assigned duty. It arises from delegated authority.

Question 28.
Give the meaning of accountability.
Answer:
Accountability implies being answerable for the final outcome. It arises from responsibility.

Question 29.
What do you mean by organising process?
Answer:
Organising process refers to identifying and grouping of activities to be performed, defining and delegating authority, casting responsibility and establishing relationships to enable people to work together effectively in accomplishing objectives.

Question 30.
State any two importance of delegation.
Answer:
a. Quick decision making
b. Effective management

Question 31.
State any two importance of decentralization.
Answer:
a. Relief to top management
b. Quick Decision-Making

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2nd PUC Business Studies Organising Four Marks Questions and Answers

Questi0n 1.
Explain the steps in organizing process.
Answer:
The organizing process involves the following steps:

  1. Identification and Division of work.
  2. Departmentalization
  3. Assignments of duties
  4. Establishment of reporting relationships

1. Identification and Division of work: This is the first step in the organizing process. Here the total work of the organization is divided into a number of small units and assigned to achieve the predetermined goals.

2. Departmentalization: It refers to the process of grouping the activities of similar nature under the same department. The department can be done on the basis of function, on the basis of type of product and on the basis of territory.

3. Assignment of duties: Here the jobs are assigned to the employees based on their skill and caliber to ensure effective performance. It is more important to balance the nature of job and the capabilities of the employee before assigning the duties.

4.Establishment of reporting relationships: After assignment of duties, it is necessary to establish an authority between superior and subordinates. The individuals should know from whom they can take the order and to whom they are accountable.

Question 2.
Explain the importance of delegation.
Answer:
Importance of delegation are as follows:
1. Effective Management: Delegation enables superiors to assign the routine activities to the subordinates and he can be relived and can concentrate on other important functions. Thus a manager can increase his efficiency.

2. Employee development: The manager delegates the work to subordinates according to the skill, ability & knowledge of the subordinates. This makes the employees to get an opportunity to use their skill and talent to perform the assigned work effectively.

3. Facilitates growth & Expansion: Delegation of authority is done on the basis of the ability of the employees which provides opportunity for them to perform better. This leads to specialization and increase in the productivity of employees which ultimately results in growth & expansion of the organization.

4. Better coordination: The systematic assignment of work gives clarity of work to everyone and avoids duplication of work. Delegation of work brings better coordination and help to reach the organization goal effectively.

5. Quick decision making: Delegation saves time by enabling the subordinates to deal with the problems promptly. They can take quick decisions with in their authority. They need not go to their superiors for the day to day routine matters.

6. Basis for management Hierarchy: Delegation of authority defines who has to report to whom. It creates a chain of superior and subordinate relationship which is the basis for hierarchy of management.

Question 3.
Explain the importance of decentralization.
Answer:
The Importance of Decentralization are:
1. Quick decision making: As the powers to make decisions are delegated throughout the organization, decisions are made quickly. Employees need not wait for the approval of the top level management. Decentralization makes the enterprise to enjoy quick decision making.

2. Relief to Top management: In the process of decentralization, top level management is relived form the burden of performing various activities. The authority to take decision is delegated to lower levels so that they can concentrate of more important functions.

3. Democratic system: Decentralization shares the authority and responsibility’between managers. Democratic system of delegation avoids the concentration of powers in few hands.

4. Incentive to workers: Decentralization delegates the power of decision making to lower level which boosts the morale of the employees. It provides them with job satisfaction by providing them independence, status and participation in the activities of the enterprises.

5. Facilitate growth: Decentralization enables mangers at lower level to perform to their full potential and develops a sense of competition among different department of the organization. Such positive spirit contributes towards the growth of organization.

6. Reduce work load: Decentralization is the technique of distributing authority, responsibility and duty among mangers. So the work load of the managers is reduced and restricted to the job assigned to them.

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Question 4.
Explain any five benefits of organizing.
Answer:
The benefits of organizing are:
1. Benefit of specialization: The total work of an organization is divided into different departments and responsibilities are assigned to different people. This leads to the specialization of work. Right man is placed for right job increase the efficiency of the organization.

2. Clarity in work relationship: Organising helps in establishing working relationship & clearly defines lines of communication and also’ specifies who need to report to whom. This further helps in responsibility of authority which an individual can exercise.

3.Optimum utilization of resources: Organising leads to proper use of materials, financial & human resources. Proper allocation of Jobs helps in avoiding over lapping of work & minimizing use of resources without any wastage.

4.Adaption to changes: Organizing helps in adopting & adjustingto the activities in response to the changes in the external environment. It brings stability & growth to the organization.

5. Effective administration: This helps to avoid confusion & duplication. Clarity in working relationships enables proper extraction of work. Thus management of an enterprise becomes easy & brings effectiveness in administration.

2nd PUC Business Studies Organising Eight Marks Questions and Answers

Question 1.
Define organizing. Explain the importance of organizing?
Answer:
Organizing is the process of identifying, grouping the work to be performed, delegating authority & responsibility, establishing a relationship & purpose for the people to work most efficiently together to achieve the objectives.
The importance of organizing are:
1. Benefit of specialization: The total work of an organization is divided into different departments and responsibilities are assigned to different people. This leads to the specialization of work. Right man placed in right job increase the efficiency of the organization.

2. Clarity in work relationship: Organising helps in establishing working relationship & clearly defines lines of communication and also specifies who need to report to whom. This further helps in responsibility of authority which an individual can exercise.

3. Optimum utilization of resources: Organising leads to proper use of materials, financial & human resources. Proper allocation of Jobs helps in avoiding over lapping of work & minimizing use of resources without any wastage.

Adaption to changes: Organizing helps in adopting & adjusting to the activities in response to the changes in the external environment. It brings stability & growth to the organization.

4. Effective administration: This helps to avoid confusion & duplication. Clarity in working relationships enables proper extraction of work. Thus management of an enterprise becomes easy & brings effectiveness in administration.

5. Development of personnel: Sound organizing ensures that every individual is placed on the job for which he is best suited. Such matching of jobs and individuals helps in better use of human talent. It also provides the benefits, which results in economy of organizations & reduction in cost.

6. Expansion & Growth: Organizing promotes growth & diversification of an enterprise. It enables the enterprise to take up new challenges. Organising can easily add more job positions & new product lines, this leads to increase in sales & profit.

Question 2.
Briefly explain the functional and divisional structure of an organization.
Answer:
Functional structure: Grouping the jobs based on similar nature and organizing them different departments is known as functional structure. The functional structure enforces a clear chain of command within the organization. Here top level management act as a primary decision maker.
Functional structure is suitable:

  • When the Size of the organization is large
  • When Organization have decentralized authority.
  • When the product line have only one product.
  • When there is a need for high degree of specialization in operations.

Divisional structure: Grouping the activities on the basis of product is-known as divisional Structure. The large organizations which have more than one product have this kind of organizational structure.
Divisional structure is suitable when:

  • When the size of organization is large or is growing.
  • When Organization have Centralized authority.
  • An enterprise produce more than one product
  • When organization need high degree of specialization in product.

Question 3.
Distinguish between formal and informal organization?
Answer:
2nd PUC Business Studies Question Bank Chapter 5 Organising - 8

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2nd PUC Business Studies Organising Five Mark Questions and Answers

Question 1.
Neha runs a factory wherein she manufactures shoes. The business has been doing well and she intends to expand by diversifying into leather bags as well as Western formal wear, thereby making her company a complete provider of corporate wear. This will enable her to market her business unit as the one stop for working women. Which type of structure would you recommend for her expanded organisation and why?
Answer:
Neha should decide for divisional structure because.

  1. She will diversify her unit now’into varied product lines.
  2. Such a structure would enable her to know the profit margins from each product line and accordingly, she can plan and select the specific product for future diversification.
  3. It will facilitate further expansion without disturbing the existing units.

Question 2.
The production manager asked the foreman to achieve a target production of 200 units per day, but he doesn’t give him the authority to requisition tools and materials from the stores department. Can the production manager blame the foreman if he is not able to achieve the desired target? Give Reasons.
Answer:
No, the production manager cannot hold the foreman responsible for the incomplete work as the foreman was not given enough authority by the manager. The principle of authority responsibility says that there should be a balance between the authority and responsibility. If the authority given is more, then it leads to misuse of authority and if responsibility is more, then the work will not be completed.

Question 3.
A manager enhances the production target from 500 units to 700 units per month, but the authority to draw raw material was not given by him. The production manager could not achieve the revised production target. Who is responsible and which principle was violated?
Answer:
The manager is responsible for work not being completed. The principle of authority responsibility

Question 4.
A company has its registered office in Delhi, manufacturing unit at Gurgaon and marketing and sales department at Faridabad. The company manufactures the consumer products. Which type of organisational structure should it adopt to achieve its target?
Answer:

  • As a company is performing separate functions in separate areas, then it should adopt functional structure
  • The services of experts are common to all products. It will be economical as no duplication will take place.
  • Span of management can be increased as workers will be doing the same type of work
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