Important Questions for CBSE Class 12 Business Studies Chapter 5 - Organising

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CBSE Class 12 Business Studies Important Questions Chapter 5 – Organising

1).Name the organization which is deliberately created? (1)
A: Formal Organisation
2).Enumerate the steps in the process of organizing? (3)
Ans: 1) Identification and division of work
2) Grouping Jobs and Departmentalization
3) Assignment of duties
4) Establishing authority relationship
3).Organizing helps in optimum utilization of resources. Which type of resources does it refer? (1)
Ans: All material, financial and human resources.
4).Give any one importance of organizing?(1)
Ans: Development of personnel.
5).Divisional structure is more suitable for the firms having several products and each product has distinct features. Do you agree? (1)
Ans: Yes, I do agree.
6).Distinguish between functional structure and divisional structure(4M)

BasisFunctional StructureDivisional Structure.
FormationIt is based on functionsIt is based on product lines
SpecialisationFunctional SpecialisationProduct Specialisation
ResponsibilityDifficult to fix on a
Easy to fix responsibility
Co ordinationDifficult for multi product
Easy, because all functions related
to a particular product are
integrated in one department.
Difficult, as each functional
manager has to report to the
top management
Easier, autonomy as well as the
chance to perform multiple
functions helps in managerial

7).What are the advantages and disadvantages of divisional structure? (5/6 )
Ans: Advantages:
1).All activities associated with one product. It can be easily integrated.
2).Decision making is faster.
3).Performance can be easily assessed remedial action can be taken
4). It facilitates expansion and growth as new divisions can be added.
1).This gives rise to duplication of effort among its divisions.
2).Manages in each department focus on their own product without thinking the rest of the organization.
3).There may not be full utilization of different equipment’s
4).Conflict may arise among different division.
8) Name the type of organization in which: (1)
Ans. Friendly relationship exists among the members.
b. Official relationship exists among the members.
A: a) Informal Organisation b) Formal Organisation.
9).Distinguish between formal and informal organizations on the basis of( 5/6)
a) Formation b. Purpose c. structure d. Behavior of members e. stability and f. adherence to rules.


BasisFunctional StructureDivisional Structure.
FormationDeliberately PlannedEmerges Spontaneously
among people
PurposeTo achieve organizational
To satisfy social and cultural
StructureWell defined structureDoes not have a clear-cut
Behavior of membersStandards of behaviorMutual consent among
StabilityIt is stableNeither stable nor predictable.
Adherence to rulesViolation of rules may lead
to penalties
No such punishment.

10). Which term denotes “The number of subordinates that can be effectively managed by a superior? (1M)
Ans: Span of control.
11) What are the elements of delegation of authority? (1)
Ans: Responsibility, Authority, Accountability.
12) Distinguish between authority and responsibility on the basis of:( 3)
Ans. Direction of flow b. Delegation c. Origin

Direction of flowAuthority flows
Responsibility flows
DelegationAuthority can be delegatedResponsibility is absolute
and cannot be delegated.
OriginArises from lawArises from authority.

13) “A manager is of the view that he is not responsible for the quality of work that he has delegated to his subordinate”. Do you agree with his view points? Justify your
answer by giving arguments. (4)

Ans: No I do not agree with managers view point.
The reasons are as follows:
i) Principle of delegation by results expected.
ii) Principle of parity of authority and responsibility
iii) Principle of absolute responsibility.
iv) Authority level principle
14) Scope of decentralization of authority is wider than delegation. Why? (1)
Ans: Decentralization implies extension of delegation to the lowest level of management.
15) Distinguish between ‘delegation’ and ‘decentralization’ of authority on the basis of
i) purpose ii) parties involved and iii) withdrawal of authority.(3)


PurposeIt means getting things done
through subordinates
To prepare the organization for
handling major expansion of its
It is confined with manager and
his immediate subordinate
It indicates relationship between top
management and various other
Withdrawal of authorityThe delegated authority can be
withdrawn by the delegator
Withdrawal of authority is difficult

1. Name of the function of management which co-ordinates the physical, financial
and human resources and establishes productive relations among them for
achievement of specific goals. (1)

Ans: Organising
2. Name and explain the two steps in the process o organizing which come after
‘Identification and division of work’ and ‘Departmentalization’. (3)

Ans: Identification and division of work: Dividing the total work into jobs is necessary because the entire work cannot be done by individual (ii)departmentalization: In this step combine or group similar jobs into larger units called departments.
3. Organising leads to a systematic allocation of jobs amongst the workforce. Which
importance of organizing is stated here? (1)

Ans: Benefits of specialization .
4. Organising clarifies lines of communication and specifies who is to report to whom. Mention the importance of organizing indicated here. (1)
Ans: Clarity in working relationships.
5. Aman Ltd. Is manufacturing toys and has production, sales, Purchase and Finance
Departments. Which type of organization structure would you suggest to them? State
any three advantages of this organization structure.(3)

Ans: I would suggest functional structure for Aman Limited.
Advantages of this structure:
i. Supervision is facilitated.
ii. Coordination with in the department is easier.
6. Hindustan Ltd. , is manufacturing computers, soaps and textiles. Which type of
organizational structure would suit the requirements of such organization? State any
three advantages of this organization structure.( 4)

Ans: Divisional structure would shoot the requirements of Hindustan limited.
i. All activates associated with one product can be easily integrated.
ii. Decision making is faster and effective.
iii. Performance of individual product can be easily assessed.
7. It is a network of personal and social relations not established or required by the
formal organization but arising spontaneously as people associate with one another.
Name this organization and give its three advantages. (4)

Ans: Informal organization:
1. It brings feeling of belongingness.
2. Informal organization satisfies social and cultural needs.
3. It provides useful channel of communication.
8. It merely means the granting of authority to subordinates to operate within
prescribe limits. Mention the concept referred here. (1)

Ans: Delegation of Authority
9. Delegation provides a ready workforce to take up leading positions in new ventures. Which importance of delegation is stated here?( 1)
 Facilitation of growth
10. “Authority can be delegated but accountability cannot.” Explain the statement.(3)
Ans: According to the principle of absolute responsibility, authority can be delegated but
responsibility cannot be delegated by a manager. The manager remains responsible to his
own superior for the task which he may assign to his subordinates. Every superior is
responsible for the acts of this subordinates to whom he delegates authority for any work.
11. The Marketing Manager of an organization has been asked to achieve a target sales of 100 generators per day. He delegates the task to 10 sales managers working under him. Two of them could not achieve their respective targets. Is the marking manager responsible? Briefly explain the relevant principle in support of your answer.( 4)
Ans: Yes, Marketing manager is responsible for the non-achievement of the target sales to his superior.
The principle related to this statement is absolute responsibility. It states that authority can
be delegated but responsibility cannot be delegated by manager. The manager remains
responsible are accountable to this own superior for the task which he may have assigned to his subordinate.
12. It refers to the systematic delegation of authority from top management to the
lower level managers. Mention it.( 1)

Ans: Decentralization of authority.
13. If we delegate the authority we multiply it by two, If we decentralize it, we
multiply it by money. (3)

Ans: Scope of delegation of authority is limited. It is clear that if we delegate the authority
we multiply it by 2 that is delegator and his subordinate to whom authority is delegated.
Scope of decentralization of authority is wider than delegation. It involves many people from to level to bottom lower level of authority.