CH-5

ORGANISING
 DEFINITION

 It is a process that initiates implementation of plans by clarifying jobs and

working relationships and effectively deploying resources for attainment of
identified and desired results( goals).
 It is a process of defining and grouping the activities of the enterprise and
establishing authority relationships among them.
Theo Haimman
 It is a process which coordinates human efforts , assembles resources and
integrates both into a unified whole to be utilised for achieving specified
objectives.
 It is a process by which the manager brings order out of chaos,
removes conflict among people over work or responsibility
sharing and creates an environment suitable for teamwork.
PROCESS OF ORGANISING
 ORGANISING PROCESS

1. Identification and division of work

 It involves identifying and dividing the work that has to be done in
accordance with previously determined plans.
 Work is divided into manageable activities so that duplication can be
avoided and burden of work can be shared among the employees.
2. Departmentalisation
 Once work has been divided into small and manageable activities then
those activities which are similar in nature are grouped together. This
grouping process is called departmentalisation.
 This facilitates specialisation
 Departments can be created using several criteria like on the basis of
territory( north, south, west etc) 0r on the basis of products( appliances,
clothes, cosmetics)
 ORGANISING
PROCESS(Contd.)
3. Assignment of duties
 Once departments have been formed, each of them is placed under the
charge of an individual. Jobs are then allocated to the members of
each department in accordance to their skills and competencies.
4. Establishing reporting relationships
 In this step, every employee is informed from whom he has to take
orders and to whom he is accountable.
 The establishment of such clear relationships helps to create a
hierarchical structure( scalar chain) and helps in coordination among
different departments.
 IMPORTANCE/SIGNIFICANCE
OF ORGANISING
1. Benefits of specialisation
 Organising leads to a systematic allocation of jobs amongst the workforce which enhances productivity as
repetitive performance of a particular task allows a worker to gain experience in that area and leads to
specialization.

2. Clarity in working relationships

 The establishment of working relationships clarifies lines of communication and specifies who is to report
to whom.
 This removes ambiguity in transfer of information and instructions
 It helps in creating a hierarchical order thereby enabling fixation of responsibility and specification of the
extent of authority to be exercised by an individual

3. Effective administration( key word- no duplication)

 Organising provides a clear description of jobs and related duties. This helps to avoid confusion and
duplication and execution of work becomes easy.
 Through organising management of an enterprise becomes easy and brings effectiveness in administration
 IMPORTANCE(Contd.)

4. Optimum utilisation of resources

 Organising leads to the proper utilisation of all material, financial and human
resources.
 It makes best possible use of resources and avoids any kind of wastage.
5. Development of personnel
Organising helps in development of personnel by delegation of work to
subordinates.
 It allows the manager to develop new methods and ways of performing tasks. It
gives them time to explore areas of growth and the opportunity to innovate
thereby strengthening company’s competitive position
 It also develops in the subordinate the ability to deal effectively with challenges
and helps them to realise their full potential.
 Delegation refers to downward transfer of authority from a superior to
subordinate.

A manager, no matter how capable he is, cannot manage to do every task on

his own. As a consequence , if he desires to meet the goals, focus on
objectives and ensure that all work is accomplished, he must delegate
authority.
 IMPORTANCE (Contd.)

6. Adaptation to change
 The process of organising allows the organisation structure to be suitably
modified according to changes in business environment. It thus provides
stability to the enterprise as it can continue to survive and grow inspite of
changes.
7. Expansion and growth
 Organising allows a business enterprise to add more job positions,
departments and even diversify their product lines
 New geographical territories can be added to current areas of operation
and this will help to increase customer base, sales and profit.
ORGANISATION STRUCTURE( key word-
framework, arrangement)
 ORGANISATION STRUCTURE

 It can be defined as the framework within which managerial and

operating tasks are performed.
 It specifies the relationship between people, work and resources
 The organisation structure of a firm is shown in an organisation chart.
 It allows coordination among human, physical and financial resources
and this enables enterprise to accomplish desired goals
 It ensures a smooth flow of communication
 Better control over the operations of a business enterprise( easy to fix
responsibility)
 It will lead to increased profitability of the enterprise.
 NEED FOR ORGANISATION
STRUCTURE
 Whenever an organisation grows in size or complexity,
coordination becomes difficult. Hence, structure needs to be
changed.

Business operates in a dynamic environment and those enterprises which fail

to adapt change are unable to survive. Hence, management must continuously
review its plans and objectives and accordingly the organisation structure of
the enterprise should also be subjected to review to determine if modification
is required.

ORGANISATION STRUCTURE IS AN INDISPENSABLE MEANS AND

THE WRONG STRUCTURE WILL SERIOUSLY IMPAIR BUSINESS
PERFORMANCE AND EVEN DESTROY IT
SPAN OF MANAGEMENT

 It refers to the number of subordinates that can be effectively

managed by a superior.
 This determines the levels of management in the structure
 A narrow span of management has tall organisation structure
whereas a wide span of management has short organisation
structure.
FUNCTIONAL STRUCTURE( key word- simple,
basic, leads to specialisation, managerial and
operational efficiency)
 It is an organisation structure formed by grouping of jobs of similar nature
according to functions and organising these major functions as separate
departments.
 For example, a company may be divided into departments such as
production, finance, marketing and human resource. These departments
may be further divided into sections
 All departments report to Managing Director
 Suitability
 Only one category of product
 Size of organisation is large
 It has diversified activities
 Operations require a high degree of specialisation
Advantages and disadvantages of
functional structure

Advantages Disadvantages
1. Specialisation(occupational 1. Functional empires
specialization)
2. Problems in coordination
2. Better control
3. Conflict of interest( sales
3. Managerial and operational
efficiency
department insist on giving
10 % discount while Finance
4. Economical (results in department wants to allow
economies of scale and low cost)
only 5% discount)
5. Ease in training employees
4. Inflexibility
6. Due attention to each function
 DIVISIONAL STRUCTURE

 A divisional structure is the organisation structure which comprises of separate business units or
divisions where divisions are made on the basis of different product manufactured.
 Each unit or division has a divisional manager responsible for performance and who has authority
over the unit or division.
 Each division is multi functional because within each division functions like production,
marketing, finance etc are performed. Within each division, functional structure tends to be
adopted.
 Each division works as a profit center where the divisional head is responsible for the profit or
loss of his division
 Each division is self contained as it develops expertise in all functions related to a product line.
 Suitability
 Where a large variety of products are manufactured
 An oganisation grows and needs to add more employees,
 create more departments and
 introduce new levels of management
Advantages and Disadvantages of
Divisional Structure

Advantages Disadvantages
1. Product specialisation 1. Conflicts
2. Greater accountability( due 2. Costly process( duplication)
to profit center concept)
3. Ignoring of organisational
3. Flexibility and initiative interests.
4. Expansion and growth
DELEGATION

 Delegation refers to the transfer of authority from a superior to a

subordinate, the entrustment of responsibility and the creation of
accountability for performance , which helps a manager to extend
his area of operations as without it, his activities would be
restricted to only what he himself can do.
 Delegation of authority merely means the granting of authority to
subordinates to operate within prescribed limits.
 It has dual benefits
 It enables a manager to use his time on high priority activities
 It also satisfies the subordinates’ need for recognition and provides
them with opportunities to develop and exercise initiative.
ELEMENTS OF DELEGATION
 AUTHORITY

 Authority refers to the right of an individual to command his

subordinates and to take action within the scope of his position
 ORIGIN: authority arises from established scalar chain. Authority
originates by virtue of an individual’s position and the extent of
authority is highest at the top management level and reduces
successively as we go down the corporate ladder.
 FLOW: authority flows from from top to bottom.
 Authority relationships helps to maintain order in the organisation by
giving the managers the right to exact( expect) obedience and give
directions to the workforce under them.
RESPONSIBILITY( Obligation)

 Responsibility is the obligation of a subordinate to properly

perform the assigned duty.
 ORIGIN: it arises from superior subordinate
relationship( authority) because the subordinate is bound to
perform the duty assigned to him by his superior.
 FLOW: responsibility flows upwards i.e. subordinate will always
be responsible to his superior.
 ACCOUNTABILITY( answerabili
ty)
 Accountability implies being answerable for the final outcome of the
assigned task.
 ORIGIN: once responsibility for performance of an assigned task is
accepted, one cannot deny accountability. Thus, accountability arises
from responsibility.
 FLOW: accountability flows upwards i.e. the subordinate will be
expected to explain the consequences of his actions or omissions.
AUTHORITY IS DELEGATED, RESPONSIBILITY IS ASSUMED,
ACCOUNTABILITY IS IMPOSED.

RESPONSIBILITY IS DERIVED FROM AUTHORITY AND

ACCOUNTABILITY IS DERIVED FROM RESPONSIBILITY
 COMPARISON
BASIS AUTHORITY RESPONSIBILIT ACCOUNTABILI
Y TY
MEANING Right to command Obligation to Answerability for
perform an assigned outcome of the
task assigned task

ORIGIN Arises from formal Arises from Arises from

position delegated authority responsibility

FLOW Flows downwards Flows upwards from Flows upwards from

from superior to subordinate to the subordinate to
subordinate superior superior

DELEGATION Can be delegated Cannot be entirely Cannot be delegated

delegated at all
 PRINCIPLES OF DELEGATION

 For effective delegation, the authority granted must be commensurate

with the assigned responsibility( Principle of authority and
responsibility)- if authority granted is more than the responsibility , it may
lead to misuse of authority and if responsibility assigned is more than
authority it may make a person ineffective.
 The authority granted to a subordinate can be taken back and
redelegated to another person
 Delegation does not mean abdication( Principle of absoluteness of
accountability)- it means that manager shall still be accountable for the
performance of the assigned tasks. Delegation of authority, empowers an
employee to act for his superior but the superior would still be accountable
to the same extent as before delegation.
 So it indicates that manager has to ensure the proper discharge of duties by
his subordinates. It is generally enforced through regular feedback on the
extent of work accomplished.
EXAMPLE

 Suppose the director of a company manufacturing computers

have asked their marketing manager to achieve a target of 100
computers per day. The marketing manager has delegated the task
to a sales manager working under him but the authority to give
discount was not given by him. The sales manager could not
achieve the target.

1. Marketing manager cannot blame sales manager since he was not

given the authority to give discount
2. However, the authority granted to the sales manager can be taken
back and redelegated.
3. Marketing manager shall still be accountable to the directors. The
process of delegation does not relieve the marketing manager of
his own accountability.
IMPORTANCE OF
DELEGATION( Delegation is a key element
in effective organising)
 Effective management-
 By empowering employees, the managers are able to function more
efficiently as they get more time to concentrate on important matters
 Freedom from doing routine work provides them with opportunities to
excel in new areas.
 Employee development
 As a result of delegation, employees get more opportunities to utilise
their talent, develop their skills and assume those responsibilities
which will improve their career prospects.
 It makes them better leaders and decision makers. Thus, delegation
helps by preparing better future managers.
IMPORTANCE(Contd.)
Motivation of employees
 Delegation not only helps in developing the talents of employees
but it has psychological benefits also. Responsibility for work
builds the self esteem of an employee and improves his
confidence. He feels encouraged and tries to improve his
performance further.
Facilitation of growth
 Delegation helps in expansion of organisation by providing a
ready workforce to take up leading positions.
 Trained and experienced employees are able to play significant
roles in the launch of new projects.
IMPORTANCE(Contd.)
 Basis of management hierarchy
 Delegation of authority establishes superior-subordinate
relationships which are the basis of hierarchy of management. It is
the degree and flow of authority which determines who has to report
to whom.
 Better coordination
 The elements of delegation namely authority, responsibility and
accountability helps to define power,duties and answerability related
to various positions in an organisation. This helps to avoid
overlapping of duties and duplication of efforts 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.
DECENTRALISATION
DEFINITION

 Decentralisation refers to systematic effort to delegate to the

lowest level all authority except that which can be exercised at
central points.
 Decentralisation refers to systematic delegation of authority
through all the levels of management and in all departments
except that which can be exercised only at central points
 Decision making authority is consequently placed nearest to the
points of action.
 Decision making authority is pushed down the chain of
command.
WHICH IS
BETTER??
Centralisation or decentralisation
 An organisation is centralised when decision making is retained
by higher management levels whereas it is decentralised when
such authority is delegated.
 Complete centralisation would imply concentration of all
decision making power at top level of management, hence there
will be no need for management hierarchy
 Complete decentralisation would imply delegation of all decision
making functions to the lower level of the hierarchy and hence
there will be no need for higher managerial positions.
 BOTH THE SCENARIOS ARE UNREALISTIC.
 As an organisation grows in size and complexity , there is a
tendency to move towards decentralised decision making. Hence,
there is a need for a balance between these co-existing forces.
Decentralisation is much more than mere transfer of authority. IT IS
A PHILOSOPHY THAT IMPLIES SELECTIVE DISPERSAL OF
AUTHORITY.

It has a belief that people are competent, capable and resourceful.

(KEY WORD) They can assume the responsibility for the effective
implementation of their decisions.
However, management needs to carefully select those decisions
which will be pushed down to lower levels and those that will be
retained for higher levels.

DECENTRALISATION MUST ALWAYS BE BALANCED WITH

CENTRALISATION IN AREAS OF MAJOR POLICY
DECISIONS.
BASIS DELEGATION DECENTRALISATI
ON
NATURE Compulsory act because no Optional policy decision. Done at
individual can perform all tasks the discretion of top management
on his own

FREEDOM OF ACTION More control by superiors hence Less control over executives hence
less freedom to take own greater freedom of action
decisions

STATUS Process followed to share tasks Result of policy decision of top

management

SCOPE Narrow scope as it is limited to Wide scope as it implies extension

superior and his immediate of delegation to lowest level of
subordinate management

PURPOSE To lessen the burden of the To increase the role of the

manager subordinates in the organisation by
giving them more autonomy.
 MR. A

MR. A

MR. B

MR. B

MR. C
IMPORTANCE OF
DECENTRALISATION
 Relief to top management
 It diminishes the amount of direct supervision exercised by superior as employees
are given the freedom to act and decide within the prescribed limits.
 It also leaves the top management with more time which they can devote to
important policy decisions rather than occupying their time with policy as well as
operational decisions.
 develops initiative among subordinates
 It helps to promote self reliance and confidence amongst the subordinates. This is
because when lower managerial levels are given freedom to take their own
decisions they learn to depend on their own judgement.
 It also keeps them constantly challenged and have to develop solutions for the
various problems they encounter
 It helps to identify those executives who have the necessary potential to become
dynamic leaders.
IMPORTANCE(Contd.)

 Develops managerial talent for the future

 Decentralisation gives subordinates a chance to prove their abilities and creates a
reservoir of qualified manpower who can be considered to fill up more challenging
positions through promotions.
 It also identifies those who may not be successful in assuming greater
responsibility.
 So it is a means of management education as well as an opportunity for trained
manpower to use its talent in real life situations.
 Quick decision making
 Decisions are taken at levels which are nearest to the points of action and there is
no requirement for approval from many levels, the decision making process is
much faster.
 There are also less chances of information getting distorted because it does not
have to go through long channels
IMPORTANCE(Contd.)

 Facilitates growth
 It gives greater autonomy to 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 with each department doing its best in a bid to outdo
other, the productivity level increase and organisation is able to
generate more returns which can be used for expansion purpose.
• Better control
 Decentralisation makes it possible to evaluate performance at each
level and the departments can be individually held accountable for
their results.
FORMAL ORGANISATION

 The formal organisation is a system of well defined jobs, each

bearing a definite measure of authority, responsibility and
accountability.
 It refers to the organisation structure which is designed by the
management to accomplish a particular task. It specifies
clearly the boundaries of authority and responsibility and
there is systematic coordination among the various activities
to achieve organisational goals.
FEATURES

 It is deliberately designed by the top management to facilitate the

smooth functioning of the organisation.
 It is a means to achieve the objectives specified in the plans as it
lays down rules and procedures essential for their achievement.
 It specifies the relationships among various job positions and the
nature of their interrelationship. This clarifies who has to report
to whom.
 Efforts of various departments are coordinated, interlinked and
integrated through the formal organisation.
 It places more emphasis on work to be performed than
interpersonal relationships among the employees.
ADVANTAGES

 Fixation of responsibility- it is easier to fix responsibility since mutual

relationships are clearly defined.
 Clarity of roles- there is no ambiguity in the role that each member has to
play as duties are specified. This also helps in avoiding duplication of
efforts.
 Unity of command- unity of command is maintained through an
established chain of command.
 Effective accomplishment of goals- it leads to effective accomplishment
of goals by providing a framework for the operations to be performed and
ensuring that each employee knows the role he has to play.
 Stability to the organisation- it provides stability to the organisation.
This is because behaviour of employees can be fairly predicted since there
are specific rules to guide them.
LIMITATIONS

 Procedural delays- it may lead to procedural delays as the

established chain of command has to be followed which increase
the time taken for decision making.
 Inadequate recognition of creativity-poor organisation practices
may not provide adequate recognition to creative talent, since it
does not allow any deviations from rigidly laid down policies.
 Limited in scope- it is difficult to understand all human
relationships in an enterprise as it places more emphasis on
structure and work.
INFORMAL ORGANISATION

 Informal organisation is a network of personal and social

relations not established or required by the formal
organisation but arising simultaneously as people associate
with one another.
 Interaction among people at work gives rise to a ‘network of
social relationships among employees’ called the informal
organisation.
FEATURES

 It emerges spontaneously and is not deliberately created by the

management.
 It originates within the formal organisation as a result of personal
interaction among employees.
 The standards of behaviour evolve from group norms rather than
officially laid down rules and regulations.
 Independent channels of communication without specified direction
of flow of information are developed by group members. It does not
have fixed lines of communication.
 It has no definite structure because it is a complex network of social
relationships among members. It has no written rules and is fluid in
form and scope.
ADVANTAGES

 Speed- prescribed lines of communication are not followed.

Thus, the informal organisation leads to faster spread of
information as well as quick feedback.
 Fulfillment of social needs-it helps to fulfil the social needs of
the members which enhances their job satisfaction since it gives
them a sense of belongingness in the organisation.
 Fills inadequacies of formal structure- it contributes towards
fulfilment of organisational objectives by compensating for
inadequacies in the formal organisation. For example, employees
reactions towards plans and policies can be tested through the
informal network.
DISADVANTAGES

 Disruptive force- when an informal organisation spreads

rumours, it becomes a destructive force and goes against the
interest of the formal organisation.
 Resistance to change- the management may not be successful in
implementing changes if the informal organisation opposes them.
Such resistance to change may delay or restrict growth.
 Priority to group interests- it pressurises members to confirm to
group expectations. This can be harmful to the organisation if the
norms set by the group are against organisational interests.
BASIS FORMAL ORGANISATION INFORMAL ORGANISATION

MEANING Structure of authority relationships Network of social relationships arising

created by the management out of interaction among employees

ORIGIN Arises as a result of company rules and Arises as a result of social interaction
policies

AUTHORITY Arises by virtue of position in Arises out of personal qualities

management

BEHAVIOUR It is directed by rules There is no set behaviour pattern

FLOW OF COMMUNICATION It takes place through scalar chain Communication is not through a planned
route. It can take place in any direction

NATURE Rigid Flexible

LEADERSHIP Managers are leaders Leaders may or may not be managers.
They are chosen by the group
Roasted Coffee Corporation is a coffeehouse chain operating in
seven states of India. Through its effective organisational
structure, it has grown despite pressure from competitors in
national market. The company has a Purchase and Production
department, Supply cha, management and logistics department,
Brand management department and Sales department.This
structure has facilitated operational efficiency, as employees
became specialists within their own realm of expertise. They
could be imparted specialised training as the focus was on
limited range of skills. Identify the organisational structure of
Roasted Coffee Corporation •, Also state the three advantages of
this structure other than those discussed in the above paragraph.
(CBSE, OD 2019)
Functional structure is being followed by Roasted Coffee
Corporation. The three advantages of this structure other
than those discussed in the above paragraph are stated
below:

Due to the similarity in the tasks being performed it

promotes control and coordination within a department.

It results in increased profit with the improvement in

managerial and operational efficiency.

It leads to minimal duplication of effort and leads to

economies of scale thereby reducing cost
1.Alliance Ltd. is engaged in manufacturing plastic buckets. The objective
of the company is to manufacture 100 buckets a day. To achieve this, the
efforts of all departments are coordinated and interlinked and authority-
responsibility relationship is established among various job positions.
There is clarity on who is to report to whom. Name the function of
management discussed above. (CBSE, 2015)

2.Sharda Ltd is pursuing diversified activities which require high degree of

specialisation. Identify the type of structure that should be followed by
Sharda Ltd.
After completing a course in travel and tourism, Karan started his own travel
agency. In order to ensure smooth functioning of his business, he decided to
create fourteen job positions divided into four departments on the basis of functions namely, front office
department including online queries, reservations department for airways, railways and roadways,
accommodation booking department, and securing payments department. In order to avoid any
interdepartmental conflicts he decides to specify clearly the lines of authority and areas Of responsibility
for each job position.

In context of the above case:

(a) Which function of management is being described in the above lines?

Identify the framework created by Karan within which all managerial and operating tasks are to be
performed in his organisation.

Name the type of the framework as identified in part (a) of the question. Also, give any two of its
advantages.
Organisational structure is the framework created by Karan within which all managerial
and operating tasks are to be performed in his organisation.

Karan has created a functional structure as job positions are divided into four
departments on the basis of functions namely, front office department including online
queries, reservations department for airways, railways and roadways, accommodation
booking department, and securing payments department. The two advantages of
functional structure are as follows:

(1) A functional structure promotes work-related specialisation since it places emphasis

on specific functions. This helps to increase efficiency in utilisation of manpower as
employees perform similar tasks within a department and are able to improve
performance.

(it) It facilitates control and coordination within a department because of similarity in the
tasks being performed.
1.Ecstatic Ltd. is a well known company dealing in office furniture. Over the years the
business of the company has grown manifolds. It now plans to expand its business and
venture into home furniture segment. At present the company is following functional
structure. Does the company need to modify its organisational structure keeping in view
its expansion plans Why or why not?

2. Sprightly Ltd. is a reputed company offering varied kinds of energy drinks. The
company now plans to launch a new range of sports wear. At present the company is
following functional structure. Does the company need to modify its keeping in view
its expansion plan' why or why not?
Atul joins as a Regional Sales Head in the export division of a FMCG (fast moving consume goods) company.
In a departmental meeting, he asks one of this subordinates, Manik, to take charge of the company's new office
in Dubai. He allocates the work to him and grants the necessary authority. However, within a month by seeking
regular feedback on the extent of work accomplished from Manik, Atul realises that Manik is not doing the
work as per expectations. So he takes away the authority delegated to him and re delegates it to Prakrit. Due to
the time wasted in this switch over, the work at the Dubai office suffers tremendously and the company is not
able to meet its desired goals.

In context of the above ease:

is Manik supposed to give regular feedback about work to Atul?

Can the authority granted to a subordinate be taken back and re-delegated to another?

Can Manik be held responsible for not meeting the work related expectations of Atul? give  a suitable reason
in support of your answer. 
Differentiate between authority, responsibility and accountability on the basis of origin and flow.
(a)Manik is to give regular feedback about work to Atul as he
has been granted authority and entrusted responsibility, so he
remains answerable for the outcome. 

(b)Yes, the authority granted to a subordinate can be taken

back and re-delegated to another person.

(c) Yes. Manik can held responsible for not meeting work
related expectations of Atul as it is the obligation of a
subordinate to perform the assigned duty to best of his ability
and skill.
Karan and Arjun are first cousins. After completing a course in journalism,
both of them join a leading newspaper company as sub-editors. Over the
years, due to their consistent hardwork, they are promoted to the post of
chief editors in different divisions. However, way of their functioning is
totally different. Karan believes in the capabilities of his subordinates and
therefore follows the philosophy of selective dispersal of authority
throughout all the levels in his division. On the other hand, Arjun prefers to
function through strict controls and retains all the decision-making authority
with himself. 

In context of the above case:

How do Karan and Arjun differ in their policies related to the extent of
delegation of authority? Explain.
Karan has adopted a decentralisation policy as he believes in the capabilities
of his subordinates. He follows the philosophy of selective dispersal of
authority throughout all the levels in his division. 

Whereas Arjun follows a policy of centralisation as he prefers to function

through strict controls and retains all the decision-making authority with
himself.
"E—Solution Ltd." Started its operations in the year 2000. At the time of its Inception the Company had
only 10 Employees with Two Departments, a "Production Department" and an "Administration
Department". The products supplied and the services provided by the company started gaining
popularity over the years. The Management had faith in the abilities of the employees and thus they
allowed them freedom of action. The management recognized that the decision makers at different
levels of the organization need to be given more autonomy They took a policy decision that there will
be less control of superiors over subordinates. This Increased the role Of the subordinates in the
organization and now they were in a position to take numerous as well as important decisions. As a
result, its business has diversified into many areas. Presently, it has its operations throughout the
country with seven branches Overseas. its organizational structure has now changed into divisional
structure and 10,000 People are working with the company.

Identify the concept of management which helped the Company to Diversify many Areas and Branches
Abroad.
Explain five points of importance of the concept identified in (a) above (CBSE, . OD 2019)
OR

One of the questions that needs to be answered in the organizing function is 'At what level are
decisions made'? Decision making authority in an organization can be pushed down to the lower levels
or it may lie with the top management. However it is not an 'either or, concept. When an organization
grows in size or complexity, there is a tendency towards sharing decision making authority with the
lower levels. This is because in large organisations employees who are closely involved with certain
operations tend to have more knowledge about them than the top management. An important concept
of organising function is discussed above. Identify the concept and state any three points of its
importance.(CBSE, OD 2019)
The concept of Decentralisation is discussed above. Decentralisation refers to the process systematic dispersal of authority up to the
lowest level within an organisation so as to enable the managers at each level take those decisions and actions which line within their area
of jurisdiction. The five points of its importance are stated below:

Develops initiative among subordinates: Decentralisation seeks to develop initiative in the subordinates by promoting self-reliance and
confidence amongst them. It also helps to identify those executives who have the necessary potential to become dynamic leaders.

Relief to top management: Decentralisation provides relief o the top level management as it eliminates the need for direct supervision.
This enables the top level management focus on other important policy formulation issues rather than merely being con about the
operational matters. Thus, by widening their approach the managers able to excel in new avenues

Better control: Decentralisation facilitates better control by ensuring continuity evaluation of performance at each level and the
contribution of each department towards the achievement of organisational objectives. The decentralised department expected to provide
regular feedback. This further helps to establish their individual accountability for their results.

Facilitates growth: Decentralisation enables the superiors to focus on important issues by delegating the work to the subordinates. And on
the other hand, when responsibilities are vested with the subordinates it provides them with opportunities to exhibit there competence.
Thus, the growth of the organisation is facilitated by increase in its productivity and profitability through assigning greater autonomy the
lower levels of management as well as divisional or departmental heads.

Quick decision making: Decentralisation facilitates quick decision making as managers are provided freedom to take independent
decisions and actions autonomy enables an organisation to take benefits of the situation where quick d making is required. Moreover it
helps to minimise the probability of information distorted as all the information does not need to be shared through many levels
Kavita Ghai was the Managing Director of a restaurant in Lucknow called 'Healthy Kitchen'. The
restaurant was doing well and the volume of work started increasing slowly and steadily Kavita Ghai was
not able to manage all the work on her own. The increasing magnitude of work made it impractical for her
to handle it all by herself. Moreover her objective is to open more branches of this restaurant at different
places.

She appointed Nikhil Gupta, as a General Manager of 'Healthy Kitchen', Lucknow and gave him the right
to command his subordinates and to take action within the scope of his position. For smooth running of
the restaurant she also gave him authority to hire and train the staff as per the requirements.

Kavita Ghai was satisfied with the work of Nikhil Gupta and was able to open other branches of the
restaurant in Agra and Kanpur also.

Identify the concept followed by Kavita Ghai which helped her to open the new branches of the restaurant.

Also, explain briefly the two points of importance of the concept identified in (a) above. (CBSE, on, 2019)
(a) The concept of delegation has been followed by Kavita
Ghai which helped her to the new branches of the
restaurant.

(b) The two points highlighting the importance are described

below:

(i) Effective management: delegation leads to effective

management of a enterprise this is because it enables the
managers to utilise their competence and the potential of
their subordinates optimally.

(ii) Employee development: When the subordinate are

entrusted with more opportunities to utilise their talent,
perform complex tasks and assume those responsibilities
which is likely to improve their career prospects.