CHAPTER : ORGANISING

Q.N QUESTION MARK

O. S
1 Roles and duties of each member are clearly defined which 1
helps in avoiding confusion and duplication of work and
efforts in informal organisation. (T/F)
2 For effective administration, organising is the primary 1
function. (T/F)
3 Organising clarifies ________ and _________ for results and 1
logical grouping of activities. authority and responsibility
4 Selective dispersal of authority leads to _______. 1
5 Rishabh has joined as creative head in an entertainment 1
company. He always ensures that the work has been
divided into small and manageable activities and also the
activities of similar are grouped together. Identify the
related step in organising process mentioned here.
(a) Identification and division of work
(b)Departmentalisation
(c) Assignment of Duties
(d)Establishing Reporting Relationships
6 Which of the following is not a demerit of informal 1
Organisation?
(a) It leads to spreading of rumors .
(b)It gives more importance to structure and work.
(c) It may restrict implementation of changes.
(d)It puts psychological pressure on members to
conform to group expectations, even if they are
against the firm.
7 Being answerable to the final outcome is a phrase which 1
 can be associated with:
(a) Authority
(b)Duty
(c) Responsibility
(d)Accountability
8 ‘It is a process by which managers brings order out of 1
chaos, removes conflicts among people over work and
creates an environment suitable for teamwork.’ Identify it.
9 Sunidhi is a simple girl, who has recently joined an IT 1
company in Pune. She often observes that most of her
colleagues go for a party on weekends with their boss.
Identify the type of organisation being described in above
lines.
10 Soumya runs a chain of low cost fashion wear outlets in 1
various parts of the country. As the taste and preference of
people vary from one region to another, she hires
competent, capable and resourceful managers and gives
them an opportunity to work independently at local level.
At the same time they are expected to assume the
responsibility for effective implementation of their
decisions with regard to various aspects like colour,
texture, design etc. Related to the garments. Identify the
concept.
11 Shine spices Ltd.’ are the manufactures of different food 1+1+
spices like Rajmaah masala, chhole masala, paav bhazi 1=3
masala etc. Mr. Raghav the owner of the company has
created different departments like purchase, production,
marketing etc. There are 30 employees working in the
organisation. Mr. Raghav believes that effective planning is
of paramount importance and can help to achieve
organisational objectives. In order to make employees
 focus on objectives, he issued orders that during working
hours only official matters will be discussed. He made
certain rules and code of conduct for the employees,
according to which employees are not allowed to visit and
talk to the employees of other departments except for
official work. He emphasised on work performance.
 Identify and name the type of organisation
mentioned in above para.
 State one feature of the concept identified in part (1)
above.
 What was the purpose behind the formulation of the
rules for the employees that restricted the
personalcommunication.
12 You are working in HR department.Day-by-day you are 3
facing problems due to existence of informal groups. What
steps would you take to manage such informal groups?

13 The manager of M Ltd. Is overburdened with the work and 3

is unable to concentrate on core issues of the company. To
overcome this problem, he entrusted some of his authority
to his immediate subordinate to share some of his routine
work.

1. Which concept is used by the manager?

2. It is an extension of one of the principles of
management, Name the principle.
3. Give one benefit of the concept identified in part (1)
above
14 “If we delegate the authority we multiply by two and if we 3
decentralise we multiply authority by many”. Comment
15 The directors of Gunjan Limited, an organisis an extation 3
manufacturing colour televisions have asked their
 production manager to achieve the target production of
150 television per day, manager has asked his foreman to
achieve this target but he did not give him the authority
for requisition of tools and materials from the stores
department .The foreman could not achieve the desired
target. Can the directors blame the production manager
and can production manager blame his foreman for not
achieving the target?

Explain in brief the relevant principles relating to this

function in support of your answer
16 Atul joins as a Regional Sales Head in the export division of 1+1+
a FMCG (fast moving consumer goods) company. In a 1+1=
departmental meeting, he asks one of his subordinates, 4
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
his expectations. So he takes away the authority delegated
to him and re delegates the work 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 case:

 Why 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 person?
  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.
17 After completing a course in travel and tourism, Karan 4
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 the context of the above case:

A) Which function of management is being described in

the above lines?

B) Identify the framework created by Karan within which

all managerial and operating tasks are to be performed
in his organization.

C)Name the type of the framework as identified in part

(a) of the question. Also, give any two of its advantages.

18 It is a network of personal and social relations not 4

established or required by the formal organisation but
arising spontaneously as people associate with one
another. Name the organisation and give its three
 advantages.

19 ‘No Organisation can be completely centralised or 4

decentralised’ Comment.

20 One of the questions that needs to be answered in the 4

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

tendency towards sharing decision making authority with
the lower levels. This is because in large organizations,
employees who are closely involved with certain
operations tend to have more knowledge about them than
the top management. An important concept of organizing
function is discussed above. Identify the concept and state
any three points of its importance.
21 Rakesh joins as a Head Librarian of a newly constructed 1+1+
medical college in Pune. A team of four librarians is placed 3=5
under him for the smooth functioning of the library.
Besides, he has been assigned eight people as support
service staff. On the second day of his joining, he is told to
get a shipment of new books unloaded, stock the
bookshelves, and then get all waste (packaging, paper
etc.) disposed off within a weeks time. In order to ensure
orderliness and speed in the process of setting up of the
library, he makes each of the four librarians in charge of
five different subjects. Keeping in mind their competence
and experience he decides to give them more authority so
 that they can make autonomous plans and assume the
responsibility for the effective implementation of their
decisions.
In context of the above case:
1) Identify and explain the concept used by Rakesh
keeping in mind the competence and experience of the
other librarians.
2) Describe briefly any three advantages of using the
concept as identified in part (a) of the question.
22 Ishita works as a corporate event coordinator in an event
management company. She has been made an overall
official in charge for organizing a painting exhibition for
one of the clients of the company. For ensuring that the
exhibition takes place successfully, she identifies the
various activities involved and divides the whole work into
various task groups like marketing committee, decoration
committee and reception committee. In order to facilitate
coordination within and among committees, she appoints a
supervisor of each group. Each member in the group is
asked to report to their respective supervisor of each
group. Each member in the group is asked to report to
their respective supervisors and all the supervisors are
expected to work as per Ishita’s orders.

In context of the above case:

A) Identify the function of management being

performed by Ishita.

B) Describe briefly the various steps involved in the

performance of the function of management as
identified in part (A) of the question.
23 A company manufacturing consumer goods has grown in 5
size. It was a market leader but with changes in economic
environment and with the entry of MNCs its market share
is declining. The company was following a centralized
business model as even the minor decisions were in the
hands of top level. Before 1991 this model was suitable for
company but now the company is under pressure to
reform.

What changes should the company bring about in order to

retain its market share? Give its three points of
importance.
24 A Steel Manufacturing Company has the following main 5
jobs:

1. Manufacturing, (ii) Finance, (iii) Marketing, (iv) Personal

and, (v) Research and development.

A) Which type of organizational structure will you

choose for this type of a company and why?

B)State any six advantages that this structure offers to an

organization.
25 Voltage fluctuations have been common and quite high in 5
India. They harm our electrical appliances like television,
refrigerators and air conditioners, often leaving them in a
permanently damaged condition.

N-Guard Company decided to manufacture stabilizers for

North India where the voltage fluctuation ranges from
220V-230V. Once the demand for the North India was
taken care of, they decided to launch stabilizers of varying
voltages from 90 V -260V for meeting the requirements of
 voltage fluctuations in other regions of India also.

Three engineers were appointed for South, West and East

regions of India, as the voltage was different in all the
three regions. Though all the engineers were appointed to
manufacture stabilizers but the product differed from
region to region.

(a) Identify the organisational structure of NGuard

Company.

(b) State any two advantages and two limitations of the

structure identified in the above para.
26 Company manufacturing Sewing Machines set up in 1946 2+2+
follows formal organisation structure. It is facing a lot of 2=6
problems such as delay in decision making, result, it is not
able to adapt to the changing business environment. The
workforce is also not motivated, the problem of red
tapeism and employees turnover is very high.
 Advise the company with regard to change it should
bring about in 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 sector can the company diversify keeping
in mind the declining market for the product the
company is manufacturing?
27 Tanushree runs a factory wherein she manufacturers 2+4=
shoes. The business has been doing well and she intends 6
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 shop for working
women. Which type of structure would you recommend for
the expanded organization and why? State any four
advantages of this organization structure.
28 Kiran Industries is a company manufacturing office 3+3=
furniture. The company chose to diversify its operations to 6
improve its growth potential and market share. As the
project was important, many alternatives were generated
for the purpose and were thoroughly discussed amongst
the members of the organisation. After evaluating the
various alternatives, Rohan , the Managing Director of the
company decided that they should ass ‘Home Interiors and
Furnishings’ as a new line of business activity.
A) Name the framework, which the diversified organisation
should adopt, to enable it to cope with the emerging
complexity? Give two reasons in support of your answer.
B) State any three limitations of this framework.
29 Aradhna and Gandharv are heads of two different 6
departments in ‘Yumco Ltd.’ They are efficient managers
and are able to motivate the employees of their respective
departments to improve performance. However, their drive
to excel in their own sphere of activity instead of giving
emphasis on objectives of the enterprise has hindered the
interaction between the departments that Aradhana and
Gandharv are heading. Often there are inter-departmental
conflicts and they have become incompatible. This has
proved to be harmful in the fulfillment of the organizational
objectives. The situation has deteriorated to such an
extent that the CEO of ‘Yumco Ltd.’ Has hired a consultant,
Rashmi, to resolve the problem. After studying the
situation closely, Rashmi found that the problem has
 arisen due to inflexibility and a narrow perspective on the
part of both Aradhana and Gandhrav. She is of the view
that this situation is a result of the type of organizational
structure ‘Yumco Ltd.’ has adopted.

From the above information, identify the organizational

structure adopted by ‘Yumco Ltd.’ And state advantages of
the structure so identified.

30 Aman Chadha started ‘Bulls Eye’ a company for providing 6

cyber security solutions to businesses. Its objective is to
prevent, detect and respond to cyber attacks and protect
critical data. He was a hardworking software engineer and
anexpert in cyber security. His reputation grew by leaps
and bounds as he was not only a person of integrity but
also did his work with utmost honesty and sincerity. The
business started growing day by day.He was delighted
when he was offered a big project by the Ministry of
Defence. While working on the project, he found that the
volume of work made it impractical for him to handle all
the work by himself. He decided to expand the team. The
company maintained a close liaison with a local
engineering college. During a campus placement, Ishan
and Vrinda were appointed to work for the new project.

He found the new employees capable, enthusiastic and

trustworthy. Aman Chadha was thus, able to focus on
objectives and with the help of Ishan and Vrinda, the
project was completed on time. Not only this Aman Chadha
was also able to extend his area of operations. On the
other hand Ishanand Vrinda also got opportunities to
develop and exercise initiative.
 (i) Identify and briefly explain the concept used by Aman
Chadha in the above case which helped him in focusing on
objectives.

(ii) Also, state any four points of importance of the concept

identified in (i) above.

ANSWERS

Q.NO ANSWER MARK

. S
1 False 1
2 False 1
3 authority and responsibility 1
4 Decentralisation 1
5 B) Departmentalisation 1
6 B) It gives more importance to structure and work. 1
7 D) Accountability 1
8 Organising 1
9 Informal Organisation. 1
10 Decentralisation. 1
11 1. Formal Organisation 1+1+
2. Focus on objective and work performance 1=3
3. Avoidance of emergence of informal organisation which
may obstruct the fulfillment of organisational goals.
12 Following steps should be taken to manage such informal 3
groups:

1. Management should use group based approaches for

decision making and conflict handling.

2. Management should ensure that informal groups

follow the rules, laid down in an organisation
 3. Managers should assist informal groups for the
betterment of organisation
13 1. Delegation of authority 3
2. Division of work
3. Motivation to employees
14 It is true , because the scope of delegation is limited, 3
when authority is delegated , only two person are involved
I.e. Delegator and delegatee (immediate subordinate).
Authority gets shared by two people. Delegator has to
keep a regular check on the delegatee as the
accountability of superior is not delegated.

While scope of decentralisation is wider, as here authority

is systematically delegated upto the lowest level.
Decentralisation increases the role of subordinates in
decision making and provide relief to top management.
15 Yes ,the Director can blame the production manager 3
although he has delegated the task to his foreman and
because accountability cannot be delegated by manager.
The production manager shall still be accountable for the
performance of the assigned task (principle of
absoluteness of accountability)

However the production manager cannot blame his

forman for not achieving the target because it did not give
him the authority for the requisition of tools and materials
from the stores department. Responsibility with authority
will make the subordinates ineffective ,that is he will not
able to perform his duties well (principle of authority and
responsibility)

16  Manik is supposed to give regular feedback about 1+1+

 work to Atul as he has been granted authority and 1+1=
entrusted responsibility, so he remains answerable 4
for the outcome.

 Yes, the authority granted to a subordinate can be

taken back and re-delegated to another person.

 Yes, Manik can be held responsible for not meeting

the work related expectations of Atul as it is the
obligation of a subordinate to perform the assigned
duty to the best of his ability and skill.

4. Authority arises from the job position of person in

the organisation, responsibility originates from authority
and accountability originates from responsibility
17 A)The Organizing function of management is being 4
described in the above lines.

B)Organizational structure is the framework created by

Karan within which all managerial and operating task
are to be performed in his organization.

C)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, reservation department for
airways, railways and roadways, accommodation
booking department, and securing payments
department.

The two advantages of functional structure

18 Informal Organisation 4

Advantages
 It brings feeling of belongingness

Informal organisation satisfies social and cultural needs

It provides useful channels of communication

19 Centralisation and Decentralisation are relative terms, i.e. 4
absolute or complete centralisation or decentralisation is
not possible.

Complete centralisation means concentration of all

decision making powers at top level. It is not possible as it
remove the need for management heirarchy. A manager
cannot retain all the authority and yet have subordinates
in the organisation. It is possible in one- man business.
Manager cannot concentrate on important matters, if he
tries to handle everything by himself.

Complete decentralisation means delegation of all

decision making functions to the lower levels. This is also
not possible as it would obviate the need for higher
managerial positions. A manager cannot delegate all his
authority without surrendering his position as a manager.

So, an organisation can never be completely centralised

or decentralised. An organisation moves towards
decentralisation as it grows in size and complexity. In
order to increase effectiveness and to improve overall
functioning, the organisation maintain a balance between
centralisation and decentralisation.
20 Decentralisation 4

Importance of decentralisation: (Any three)

(i) It gives relief to the top management as, when the

 subordinates are given the freedom to act, the top

management gets more time to devote on important

policy decisions rather than handling operational
decisions.

(ii) It develops initiative amongst subordinates by

promoting self reliance and confidence among them. This
is because when lower managerial levels are given
freedom to take their own decisions they learn to depend
on their own judgement.

(iii) It develops managerial talent for the future by giving

the subordinates a chance to prove themselves, thus,
creating reservoir of qualified manpower to fill up
challenging positions in future.

(iv) It facilitates growth by fostering competition amongst

the departments leading to increase in productivity,
thereby generating to higher profits which can be used for
growth and expansion.

(v) It helps in quick decision making as there is no

requirement for approval from many levels. There are also
less chances of information getting distorted as it doesn’t
have to go through many levels.

(vi) It leads to better control by evaluating performance

at each level of management. The departments can be
held accountable for their results.
21 1)Rakesh has used the concept of decentralization 2+3=
keeping in mind the competence and experience of the 5
other librarians.
2)The three advantages of using decentralization are
 as follows:
 Decentralization helps to promote initiative amongst
the subordinates
 Relief to top management
 Quick decision making (explanation to be given)
22 A) The Organizing function of management is being 5
performed by Ishita.

B) The steps involved in the process of organizing are

as follows:

1.Identification and division of work: It means

identifying various activities to be done and dividing
those activities in to sub tasks keeping in mind the
qualification, experience and skills required to do those
tasks.

2.Departmentalisation: It involves grouping of

activities which are similar in nature. This process is
called departmentalization. Departments can be
created on the basis of products and functions.

3.Assignment of Duties: Jobs are allocated to

individuals according to their knowledge and skill.
There should be proper match between the nature of
job and the ability of an individual.

4.Establishing Reporting Relationships: In order to

perform the duties assigned, it is necessary that some
authority is granted for the same. Each employee has
some authority as well as responsibility. It is necessary
that every individual must know whom he has to take
orders from and to whom he is answerable. This
 creates superior- subordinate relationship.

23 The top management of the company must share 5

decision-making authority with middle level land
supervisory level also. It should introduce the concept of
‘Decentralization’ instead of following complete
centralization. In the current scenario of business
environment, there is need for fast action and quick
decision-making which is possible only with
decentralization.

Importance of decentralization:

1. Relief to top management:

2. Develops initiative amongst subordinates

3. Quick decision-making:

24 A) Functional structure; because the company has 5

diversified activities and operations require a high
degree of specialization.

B) Advantages of functional structure:

I) Functional structure leads to occupational

specialization.

II) It promotes control and coordination within the

department.

III) It helps in increasing managerial and operational

efficiency and this results in an

IV) increase in profits.

V) It leads to minimum duplication of effort.

 VI) It makes training of employees easier.

VII) It ensures that different functions get due

attention.

25 Functional Structure 5

Advantages of Functional structure: (Any two)

(a) It leads to occupational specialisation since emphasis

is placed on specific functions.

(b) It promotes control and coordination within a

department because of similarity in the tasks being
performed.

(c) It increases managerial and operational efficiency

resulting in increased profit.

(d) It lowers cost as it reduces duplication of effort.

(e) It makes training of employees easier as it focuses on

a limited range of skills.

(f) It ensures that different functions get due attention.

Two limitations of Functional structure are: (Any two)

(a) Creation of functional empires where less emphasis is

placed on overall objectives of the enterprise and more on
the objectives pursued by a functional head.

(b) Problems in coordination as information has to be

exchanged across functionally differentiated departments.

(c) Inter-departmental conflicts may arise when the

interest of two or more departments are not compatible.
 (d) Inflexibility as people with the same skills and
knowledge may develop a narrow perspective.
26 1. The company should give due importance to 2+2+
informal organisation structure along with the formal 2=6
structure. It enhances the job satisfaction. This will
overcome the problem of lack of motivation, It also
provide useful communication channels which may
help to transmit Useful information quickly.
2. benefits of informal organisation structure:
a) fastest speed of information.
b) fulfillment of social needs.
c) fill inadequacies of formal structure.
3.The company can diversify its activities by
introducing embroidery machines. it can also design
special machines keeping in mind the requirement of
readymade garment manufacturers etc. ,by
diversifying in the same field it can get maximum
utilisation of existing. Resources
27 ‘Divisional structure’ is suitable for the expanded business 2+4=
since it will produce multiple products – shoes, leather 6
bags and western formal wear. That means, the
organization will grow; and will need to add more
employees; create more divisions; and introduce new
levels of management.
By adopting divisional structure, the company will get the
following advantages:
1)It will facilitate growth and expansion. Now the business
of Tanushree will have multiple divisions shoes, bags and
formal wear. Within division, functions like production,
marketing finance, purchase, etc. will be performed to
 achieve the objectives of the business.
2)Greater accountability will be possible because the
divisional managers can be held separately accountable
for their respective division’s profits, costs, etc.
3)Product specialization: A divisional head gains
experience in all functions related to a particular product.
4)Flexibility and initiative: It promotes flexibility and
initiative because each division functions as an
autonomous unit which leads to faster decision-making.
28 A) Divisional Structure 3+3=
Reason: 6
 Product specialisation : It helps in the development
of varied skills in divisional head and this prepares
him for higher positions.
 Greater Accountability: In divisional structure , each
product is treated as a ‘profit centre’ and is
accountable for its own profit or loss. This provides a
base for measuring performance and helps in fixing
responsibility in case of poor performance.
B) Limitations:
1. Departmental conflicts:Conflicts may arise among
different divisions with refernce to allocation of funds.
2. Costly: It is costly as each division has to maintain its
own facilities, equipments and personnel.
3.Ignore organisational interests: In Divisional structure,
managers focus on their own product without thinking of
the rest of the organisation. Thus organisational objectives
suffer and become difficult to achieve.
29 Functional Structure is the organizational structure 6
adopted by ‘Yumco Ltd.’
 Advantages of Functional Structure: (any five)

(a) It leads to occupational specialization since

emphasis is placed on specific functions.
(b)It promotes control and coordination within a
department ecause of similarity in the tasks being
performed.
(c) It increases managerial and operational efficiency.
(d)It lowers cost as it reduces duplication of efforts.
(e) It makes training of employees easier as it focuses
on a limited range of skills.
It ensures that different functions get due attention.
30 (i) Delegation. 6

Delegation is the transfer of authority from superior to

subordinate, entrustment of responsibility and creation of
accountability for performance which helps a manager to
extend his area of operations.

(ii) Importance of delegation of authority: (Any four)

(i) Effective management : It helps in effective

management as the managers get more time to
concentrate on important matters.

(ii) Employee development : It helps in development of

employees as the employees get more opportunities to
utilize their talent.

(iii) Motivation of employees : It helps to motivate

employees as the employees feel encouraged and try to
improve their performance further.

(iv) Facilitation of growth : It facilitates growth by

providing a ready workforce to take up leading positions in
new ventures.

(v) Basis of management hierarchy : It establishes a

management hierarchy through clear superior subordinate
relationships.

(vi) Better co-ordination : It helps in better co-ordination

by avoiding overlapping of duties.