TAGORE PUBLIC SCHOOL

Class: XII A
Ch-4 ORGANISING
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Q1 Write the meaning and concept of organising.
Meaning of Organising
Once the objectives and plans are laid down, management has to identify and
establish productive relationships between various activities and resources for
implementing plans. In general words organising refers to arranging everything in
orderly form and making the most efficient use of resources. The aim of organizing
is to enable people to work together for a common purpose.

‘Organizing is the process of identifying and grouping the work to be performed,

defining and delegating responsibility and authority and establishing relationships
for the purpose of enabling people to work most effectively together in
accomplishing objectives.’

Q2 Explain the process of organising in brief.

Steps Involved in the Process of Organizing

Step 1 Identification & Division Of Work

Step 2. Departmentalization

Step 3. Assignment Of Duties

Step 4. Establishing Reporting Relationships

1. Identification & Division Of Work: –

The total work to be done should be divided into specific jobs as according to
predetermined plans.
 Job = a set of related tasks that can be performed by an individual. It should
have specific and definite tasks to be performed. As far as possible, it should
define expected results along with the job.
 Division of work → specialization of efforts and skills + avoids duplication of
work.
 Management must ensure that all the activities required to achieve
organizational objectives are identified.

2. Departmentalization:

 Grouping similar and related jobs into larger units called departments,
divisions or sections and placing them under a department head.
 It facilitates specialization.
 The departments are linked together and are interdependent.
 Aims at achieving co-ordination and facilitate unity of action.

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Departmentation can be done on the basis of:
•Functions: marketing, personnel, finance etc.
•Products: Textiles, chemical, power division etc.
•Territories: Western, northern, central, eastern etc.

3. Assignment Of Duties:
 Define the work of different job positions and allocate work accordingly.
 Once departments are formed, the dept is placed under the charge of an
individual.
 Jobs are assigned to an individual best suited to perform it.
 Qualifications, experience, ability and aptitudes of people should be matched
with duties.
– E.g. activities of finance should be assigned to persons having qualifications
and experience in finance e.g. C.A‘s.

4. Establishing Reporting Relationships:

 Granting requisite authority to enable employees to perform the job
satisfactorily.
 Superior subordinate relations between different people and job positions
created, so that everybody knows from whom he is to take orders and to whom
he can issue orders.
 Creates management hierarchy = a chain of command from the top manager to
the individual at the lowest level.
 This helps in coordination.

Q3 Explain the importance of organizing in brief?

Importance of Organizing
1. Benefits of specialization:
In organizing every individual is assigned apart of total work and not the whole task. This
division of work into smaller units and repetitive performance leads to specialization. Thus
organizing promotes specialization which in turn leads to efficient & speedy performance of
tasks.

2. Clarity in working relationship:

It helps in creating well defined jobs and also clarifying the limits of authority and
responsibility of each job. The superior-subordinate relationship is clearly defined in
organizing.

3. Effective Administration:
It provides a clear description of jobs and related duties which helps to avoid confusion and
duplication. Clarity in working relationships enables proper execution of work which results
ineffective administration.

4. Optimum utilization of resources:

The proper assignment of jobs avoids overlapping/duplication of work. This helps in
preventing confusion and minimizing the wastage of resources and efforts.

5. Adoption to Change:

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A properly designed organizational structure is flexible which facilitates adjustment to
changes in workload caused by change in external environment related to technology,
products, resources and markets.
6. Development of Personnel:
Sound organization encourages initiative and relative thinking on part of the employees.
When managers delegate their authority, it reduces their workload so they can focus on more
important issues related to growth & innovation. This also develops the subordinates’ ability
and helps him to realize his full potential.

7. Expansion and growth:

It helps in growth & diversification of an enterprise by adding more job positions,
departments, products lines, new geographical territories etc.

Q4 Write the Meaning of Organizational Structure

It seeks to establish relations among all the persons working in the organization. Under the
organizational structure, various posts are created to perform different activities for the
attainment of the objectives of the enterprise. Relations among persons working on different
posts are determined. The structure provides a basis or framework for managers and other
employers for performing their functions. The organization structure can be defined as the
frame work within which managerial and operating tasks are performed.

Q5 Explain relation between Span of Management and Organization structure.

Span of management refers to the number of subordinates that can be effectively managed
by a superior. The Span of management to a large extent gives shape to the organization
structure. This determines the levels of management in the structure. Arrow span of
management results in tall structure whereas wider span of management results in flat
structure.

Q6. Write the name of types of organizations structures in brief and explain.

The organizational structure can be classified into following categories:

a) Functional structure
b) Divisional structure

A) FUNCTIONAL STRUCTURE: In functional structure activities are grouped and departments are
created on the basis of specific functions to be performed. For example, all the jobs related to
production are grouped under production department, sales departments etc.

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Suitability
(1) Large organizations producing one line of product.
(2) Organizations which require high degree of functional specialization with
diversified activities.
Advantage

1. Specialization: Better decision of labour takes place which results in specialization of

functions and its consequent benefits.

2. Coordination is established: All the persons working within a departmental are

specialists of their respective jobs. It makes the co-ordination easier at departmental level.

3. Helps in increasing managerial efficiency: Managers of one department are performing

same type of function again and again which makes them specialized and improves their
efficiency.

4. Minimizes cost: It leads to minimum duplication of effort which results in economies of

scale and thus lowers cost.

Disadvantages
1. Ignorance of organizational objectives: Each departmental head works according to
his own wishes. They always give more weight to their departmental objectives. Hence
overall organizational objectives suffer.

2. Difficulty in Inter-departmental Coordination: All departmental heads work as per

their own wishes which leads to coordination within the department easier but it makes
inter-departmental coordination difficult.

3. Hurdle in complete development – because each employee specializes only in a small

part of the whole job.

(B) DIVISIONAL ORGANIZATION STRUCTURE

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

Suitability: This structure is suitable in organizations producing multi product or different lines of
products requiring product specialization. Also growing companies which intend to add more lines
of products in future adopt this structure.
ADVANTAGES
1. Quick decision-making: Divisional manager can take any decision regarding his division
independently which makes decisions quick and effective.

2. Divisional results can be assessed: Division results (profit/loss) can be assessed easily. On
this basis any unprofitable division can be closed.

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3. Growth and Expansion: It facilitates growth and expansion as new divisions can be added
without disturbing existing departments.
DISADVANTAGES
1. Conflicts among different divisions on allocation of resources.
2. Duplicity of Functions: Entire set of functions is required for all divisions. It gives rise to
duplicity of efforts among divisions & increases cost.

3. Selfish Attitude: Every division tries to display better performance and sometimes even at
the cost of other divisions. This shows their selfish attitude.

Q7 Distinguish between Functional Structure and Divisional Structure.

BASIS FUNCTIONAL STRUCTURE DIVISIONAL STRUCTURE

FORMATION Formation is based on Formation is based on product lines
functions and is supported by functions.

SPECIALISATION Functional specialisation Product specialisation

COST Functions are not duplicated, Duplication of resources in various

hence economical. departments, hence costly.

COORDINATION Difficult for a multi-product Easy, because all functions related

company. to a particular product are
integrated in one division.

RESPONSIBILITY Difficult to fix responsibility Easy to fix responsibility for

on a particular department performance.

MANAGERIAL Difficult, as each functional Easier, autonomy as well as chance

DEVELOPMENT manager has to report to the to perform multiple functions helps
top management. in managerial development.

Q8 List the names of types of organisations

a) Formal Organisation
b) Informal Organisation

Q9 Explain the meaning, features, advantage and disadvantages of Formal

Organisation.
FORMAL ORGANISATION –
 It Refers to the organisation structure that is designed by the management to accomplish
organizational objectives.
 It specifies clearly the boundaries of authority & responsibility and there is a systematic
coordination among the various activities to achieve organizational goals.
– Louis Allen – System of well-defined jobs, each bearing a definite measure of authority,
responsibility & accountability.
Features
1. It is deliberately created by the top management.
2. It is based on rules and procedures which are in written form.
3. It is impersonal i.e., does not take into consideration emotional aspect.

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4. It clearly defines the authority and responsibility of every individual.
5. It is created to achieve organizational objectives.

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

DISADVANTAGES
1. The Work is based on rules which causes unnecessary delays.
2. Lack of initiative: The employees have to do what they are told to do and they have no
opportunity of thinking.
3. Limited in scope: It is difficult to understand all human relationships in an enterprise as it
places more emphasis on structure and work.

Q10 Explain the meaning, features, advantage and disadvantages of Informal

Organisation.

INFORMAL ORGANISATION
An informal organization is that organization which is not established deliberately but
comes into existence because of common interests, tastes and religious and communal
relations. The main purpose of this organization, structure is getting psychological
satisfaction. For example, employees with similar interest in sports, films, religion etc. may
form their own informal groups.

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

ADVANTAGES
1. Speed: Prescribed lines of communication are not followed which leads to faster spread
of information.

2. Fulfilment of social needs – enhances job satisfaction which gives them a sense of
belongingness in the organization.

3. Quick solution of the problems – because the subordinates can speak without

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 Hesitation before the officers, it helps the officers to understand the problems of their
subordinates.

DISADVANTAGES
1. It creates rumours: All the persons in an informal organization talk careless and
sometimes a wrong thing is conveyed to the other persons.
2. It resists change and lays stress on adopting the old techniques.

3. Priority to group interests: Pressurizes members to conform to group expectations.

Q11 Write difference between Formal Informal Organisation

BASIS FORMAL ORGANISATION INFORMAL ORGANISATION

1. Meaning It refers to the structure of well- It refers to the network of social

defined authority and relationships which develops
responsibility. automatically.

2. Nature Rigid and stable Flexible and unstable

3. Authority Arises by virtues of positions in Arises out of personal qualities.

management.

4. Adherence to Violations of rules may lead to No such penalties’ and

rules penalties’ and punishments. punishments.

5. Flow to Takes place through the scalar Not through a planned route, it can
Communication Chain. take plane in any direction.

6. Purpose To achieve planned To satisfy social and cultural needs

organizational objectives. and fulfill common interests.

7. Formation/ Deliberately planned and created Emerges spontaneously as a result

origin by management. of social interaction among
employees.

8. Structure Well defined structure of tasks No clear cut structure because of

and relationships. complex network of relationships.

9. Flow of Authority flows from top to Authority flows vertically as well as

Authority bottom i.e. downwards. horizontally.

10. Independent. Depends on formal structure.

Interdependence

Q12 Write the meaning and concept of delegation

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

Q13 Explain the elements of delegation in brief.

Process/Elements of Delegation
1. Authority: The power of taking decisions in order to guide the activities of others. Authority
is that power which influences the conduct of others.
2. Responsibility: It is the obligation of a subordinate to properly perform the assigned
duty. When a superior issues orders, it becomes the responsibility of the subordinate
to carry it out.
3. Accountability: When a superior assigns some work to a subordinate, he is answerable
to his superior for its success or failure.

Q14 Explain the Principle of Absoluteness of Accountability.

Authority can be delegated but responsibility/accountability cannot be delegated by
a manager. The authority granted to a subordinate can be taken back and re-
delegated to another person. The manager cannot escape from the responsibility for
any default or mistake on the part of his subordinates. For example, If the chief
executive asks marketing manager to achieve a sales target of sale of 100 units/day.
The marketing manager delegates this task to deputy sales manager, who fails to
achieve the target. Then marketing manager will be answerable for the work
performance of his subordinates. Thus, accountability is always of the person who
delegates authority.

Process of Delegation of Authority

Q 15 Write the comparison between Authority, Responsibility and Accountability.

Difference between Authority, Responsibility and Accountability

Basis Authority Responsibility Accountability

1. Meaning Right to command Obligation to perform Accountability for the

an assigned task. outcome of the assigned task.

2. Origin Arises from formal Arises from delegated Arises from responsibility.
position. authority.

3. Flow Downward- from Upward- from Upward- from subordinate

superior to subordinate. subordinate to superior. to superior.

4. Can be withdrawn Cannot be withdrawn Cannot be withdrawn once

Withdrawl anytime by giving notice. once created. created.

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Q16 Explain the Importance of the Delegation of Authority.

1. Reduction of Executives’ work load: It reduces the work load of officers. They can thus utilize
their time in more important and creative works instead of works of daily routine.

2. Employee development: Employees get more opportunities to utilize their talent which
allows them to develop those skills which will enable them to perform complex tasks.
3. Quick and better decision are possible: The subordinate are granted sufficient authority so
they need not to go to their superiors for taking decisions concerning the routine matters.
4. High Morale of subordinates: Because of delegation of authority to the subordinates they get
an opportunity to display their efficiency and capacity.

5. Better coordination: The elements of delegation – authority, responsibility and

accountability help to define the powers, duties and answer ability related to various job
positions which results in developing and maintaining effective coordination.

Q17 Explain the concept of decentralisation.

 Decentralisation of authority means dispersal of authority to take decisions throughout
the organization, upto the lower levels.
 It implies reservation of some authority with the top level management and transferring
rest of the authority to the lower levels of the organization. This empowers lower levels
to take decisions regarding problems faced by them without having to go to the upper
levels.
 According to Allen,‘ Decentralisation refers to systematic efforts to delegate to the lowest
level, all authority except the one which can be exercised at central points.”

Q18 Explain the concept of centralization and how is it related to Decentralisation.

Centralization = authority retained at top level and

Decentralization = Systematic delegation of authority at all levels and in all departments of
a firm. Firm needs to balance the two.

 In case of a decentralized firm,

Top level retains authority for:

o Policies and decisions w.r.t the whole firm
o Overall control and coordination
Middle and lower levels have authority to take decisions w.r.t tasks allocated to them

Centralization and Decentralization:

 Represents the pattern of authority among managers at different levels.
 Centralization of authority means concentration of power of decision making in a few
hands. In such an organization very little authority is delegated to managers at middle
and lower levels.
 No organization can be completely centralized or decentralized.

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  They exist together and there is a need for a balance between the two. As the
organization grows in size, there is tendency to move towards decentralization.
Thus, every organization is characterized by both.

Q18 Explain the importance of Decentralization.

1. Develops initiative amongst subordinates: It helps to promote confidence because the
subordinates are given freedom to take their own decisions.
2. Quick and better decisions: The burden of managerial decisions does not lie in the
hands of few individuals but gets divided among various persons which helps them to
take better and quick decisions.
3. Relieves the top executives from excess workload: The daily managerial works are
assigned to the subordinates which leave enough time with the superiors which they can
utilize in developing new strategies.
4. Managerial Development: It means giving authority to the subordinates up to the lower
level to take decisions regarding their work. In this way the opportunity to take decisions
helps in the development of the organization.

5. Better Control: It makes it possible to evaluate performance at each level which results in
complete control over all the activities.

Q 19 Differences between – Delegation and Decentralization

BASIS DELEGATION DECENTRALIZATION

1. Nature It is a compulsory act. It is an optional policy.

2. Freedom Less freedom to take decisions due More freedom of action due to less
of action to more control by the superiors. control by the top management.

3. Status It is a process of sharing tasks and It is the result of policy decisions

authority. taken by top management.

4. Scope Narrow- as it is confined to a Wide- It includes extension of

superior and his immediate and delegation to all the levels of
subordinate. management.

5. Purpose To reduce the burden of manager. To increase the role and the
autonomy of lower level of
management.

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