Q. 1. 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:
Q. 2. As the head boy and head girl of ‘Prakashay Public School’, Deepak Chugh and Deepika Chawla have been given the responsibility of hosting the teacher’s Day programme in the school. In order to conduct the programme in a systematic way, Deepak and Deepika first called a meeting of the student council. In the meeting the decided about the content of the programme after taking into consideration the different available alternatives and choosing the best alternative among them. Then the various tasks required to be performed were identified and divided in accordance with predetermined schedule made by them. After that they grouped the similar activities into main groups as skit group, choir group, instrumental music group and contemporary dance group. Then each group was placed under the charge of a council member in accordance with his/her skills and competencies. These council members were in turn informed that they have to take orders and will be accountable only to Deepak and Deepika so as to facilitate coordination amongst various groups.
In context of the above case:
Organizing is the process of defining and grouping the activities iof the enterprise and establishing authority relationships among them.
The importance of the organizing function of management is described below:
Q. 3. Rishu, Ashu and Ravi have decided to start a business of manufacturing toys. They identified the following main activities which they have to perform;
In order to facilitate the work they thought that four managers should be appointed to look after
‘In order to facilitate the work they thought that four managers should be appointed to look after
Q. 4. Tanushree runs a factory wherein she manufacturers shoes. The business has been doing well and she intends to expand by diversifying into leather bags as well as western formal wear, thereby making her company a complete provider of corporate wear. This will enable her to market her business unit as the one 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. (6 marks)
Ans. ‘Divisional structure’ is suitable for the expanded business since it will produce multiple products – shoes, leather 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:
Q. 5. The directors of Gunjan Ltd. an organization manufacturing colour televisions, have asked their production manager to achieve a target production of 150 televisions per day. They production manager has asked his foreman to achieve this target, but he did not give him the authority for the 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 the production manager blame his foreman for and achieving the target? Explain in brief the relevant principles relating to this situation in support of your answer. (4 marks)
Ans. Yes, the directors can blame the production manager, although he had delegated the task to his foreman because accountability cannot be delegated by a manager. The production manager shall still be accountable for the performance of the assigned tasks. (Principle of absoluteness of accountability)
However, the production manager cannot blame his foreman for not achieving the target because he did not give him the authority for the requisition of tools and materials from the stores department. Responsibility with authority will make the subordinate ineffective, i.e., he will not be able to perform his duties well. (Principle of authority and responsibility)
Q. 6. Home Creations Ltd.’ is a well known chain of large department store offering various types of products under one roof. The company owns fifty stores in various parts of the country. Each store is placed under the charge of a manager who is allowed to run their stores autonomously by deciding about the products which may be promoted, appointment of staff, ways to handle customer complaints etc. As these managers have a deeper knowledge of the local situations, it enables them to take these decisions effectively keeping in view the local circumstances and consumers’ needs. This approach helps to improve customer service and at the same time serves to boost morale and increase the job satisfaction of the store managers as it empowers them to innovate and use their initiatives.
In the context of above case:
Q, 7, Sudhir is working as a purchase manager in a power sector company. All his subordinates hold him in high regard for his exceptional managerial skills. On one hand, as a manager, he is a tough task master and expects strict compliance to the organizational rules and procedures from his subordinates. On the other hand, he makes conscious efforts to develop rapport with his subordinates by interacting freely with them during the lunch breaks I the cafeteria. Many a times these chit chats helps him to get an insight into the views and opinions of his team members about the policies of the organization.
In the context of the case:
Formal organization is the structure of authority relationships created deliberately by the management to achieve its objectives.
Informal organization is a network of social relationships arising out of the interaction among employees within an organization.
Q. 8. Rajeev, the owner of Pathway constructions decided to start a campaign to create awareness among people for developing clean surroundings in their area. He formed a team of 10 members to list the different ways for cleaning the surroundings. One suggested to take the help of local residents, another suggested that they may involve school going children in their venture. One more suggestion was to take the help of unemployed youth. On evaluation of different ways, it was decided to take the help of local residents. To achieve the desired goal various activities were identified like
After identification of different activities the work was allocated to different members.
Lines for planning:
‘one suggested …. Unemployed youth’
‘on evaluation …. Local residents’
‘campaign to create awareness …. Surroundings’
Lines for organizing:
‘To achieve …. Disposal of garbage etc.’
‘after identification of different activities … different members’
Q. 9. A company manufacturing sewing machines set up in 1946 follows formal organization structure. It is facing a lot of problems such as delay in decision-making. As a result, it is not able to adapt to the changing business environment. The workforce is also not motivated, there is problem of red tapism and employees’ turnover is very high.
Q. 10. A company manufacturing consumer goods has grown in 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. (5 marks)
Ans. The top management of the company must share 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:
Q. 11. National Vritech Ltd. has grown in size. It was a market leader but with changes in business environment and with the entry of MNCs its market share is declining. To cope up with the situation CEO starts delegating some of his authority to the General Manger, who also felt himself overburdened and with the approval of CEO disperses some of his authority to various levels throughout the organization. Identify the concept of management discussed above. (1 mark)
Q. 12. A Steel Manufacturing Company has the following main jobs:
Q. 13. Identify and state the type of organization structure that should be followed by the company in each case:
It is an organization structure comprising of separate business units or divisions, created on a certain basis, e.g. product lines.
It is an organization structure formed by grouping of jobs of similar nature under functions and organizing these functions as separate departments like production, finance, marketing, etc.
Q.1 4. Kiran Industries is a company manufacturing office furniture. The company chose to diversify its operations to improve its growth potential and increase market share. As the project was important many alternatives were generated for the purpose and were thoroughly discussed amongst the members of the organization. After evaluating the various alternatives Sukhvinder,, the Managing Director of the company decided that they should add ‘Home Interiors and Furnishings’ as a new line of business activity.
Reason in support of the answer (any one)
Q. 15. Samir Gupta started a telecommunication company, ‘Donira Ltd.’ to manufacture economical mobile phones for the Indian rural market with 15 employees. The company did very well in its initial years. As the product was good and marketed well, the demand of its products went up. To increase production the company decided to recruit additional employees. Samir Gupta, who was earlier taking all the decisions for the company had to selectively disperse the authority. He believed that subordinates area competent, capable and resourceful and can assume responsibility for effective implementation of their decisions. This paid off and the company was not only able to increase its production but also expanded its product range.
Q. 16. ‘Himalaya Ltd.’, is engaged in manufacturing of washing machines. The target of the organization is to manufacture 500 washing machines in a day. There is an occupational specialization in the organization which promotes efficiency of employees. There is no duplication of efforts in such type or organization structure.
Identify the type of organization structure described above. (1 mark)
Ans. Functional structure.
Q. 17. Steelo Ltd. decided to set-up its steel manufacturing factory in the backward area of Orissa where very less job opportunities were available. People of that area welcomed this effort of Steelo Ltd. To attract people to work in its factory, it also decided to provide many other facilities like a school, hospital, market, etc. in the factory premises.
Steelo Ltd. started earning huge profits. Another competing company asked its production manager Aslam to investigate the reasons of earning huge profits by steelo Ltd.
Aslam found that in both the companies, there was systematic coordination among the various activities to achieve the organizational goals. Every employee knew who was responsible and accountable to whom. The only difference was that in his organization, communication took place only through the scalar chain whereas Steelo Ltd. was allowing the flow of communication in all the directions as per the requirement which led to faster spread of information as well as quick feedback.
Q. 18. A company is manufacturing washing machines. There is a well-defined system of jobs with a clear and definite authority, responsibility and accountability in the company. But people are not allowed to interact beyond their officially defined roles. As a result,, the company is not able to adapt to the changing business environment. The workforce is also not motivated due to lack of social interaction. The company is facing problems of procedural delays and inadequate recognition of creative talents.
Q. 19. 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 the context of the above case:
The two advantages of functional structure
Q. 20. Atul joins as a Regional Sales Head in the export division of a FMCG (fast moving consumer 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 for Manik, Atul realizes 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:
Q. 21. Rakesh joins as a Head Librarian of a newly constructed medical college in Pune. A team of four librarians is placed 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:
Q. 22. A truck manufacturing company has its registered office in Delhi, manufacturing unit at Gurgaon and marketing department is located at Faridabad. The company manufactures different types of trucks. Which type of organizational structure should it adopt to achieve its target? Give reasons. State any four any advantages of this organization structure. (6)
Ans. The company should adopt ‘Functional Structure’ since it manufactures trucks only (a single product). The company has separate departments like manufacturing unit (Gurgaon), marketing and sales department (Faridabad), etc. That means, the size of the organization is large, it has diversified activities and operations require a high degree of specialization. So, it should adopt functional structure.
By adopting functional structure, the company gets the following advantages:
Q. 23. A company is manufacturing washing machines. There is a well defined system of jobs with a clear and definite authority, responsibility and accountability in the company. But people are not allowed to interact beyond their officially defined roles. As a result the company is not able to adapt to the changing business environment. The workforce is also not motivated due to lack of social interaction. The company is facing problems of procedural delays and inadequate recognition of creative talents.
Q. 24. The Employees of Manik Ltd., a software company, have formed a dramatic group for their recreation. Name the type of organization so formed and state its four features. (4)
Ans. The type or organization formed by employees of Manik Ltd. is informal organization Features of Informal Organization:
Q. 25. Ravi runs a locks manufacturing factory. He manufactures locks used in houses. He wants to expand his business. For this, he wants to enter into the manufacturing of locks for cars and motorcycles.
Which type of organizational structure will he choose for his factory and why? (1 mark)
Ans. Functional structure; because the company produces a single product (locks used in houses) or a small number of related products (locks for cars and motorcycles).
Q. 26. Neeta Ltd. is engaged in the production of marble articles. The members of the organization have friendly relationships among them. What type of organization is Neeta Ltd.? (1 mark)
Ans. Informal organization
Q. 27. Sherya Ltd. has been awarded recently with the ‘Best Employer of the Year Award’. The company has believed in the ideas and suggestions of its employees. There is systematic dispersal of decision making at all levels. There is no delay in delivery of orders to customers due to prompt decisions taken by employees.
It refers to systematic delegation of authority through all the levels of management and in all the departments except that which can be exercised only at central points.
Q. 28. An electronic company manufacturing TV and Refrigerators wants to bring two new Washing machines and ACs in the market. For each product separate division is to be set up. In charge of washing machine division and ACs division will be females and disabled person respectively.
Q. 29. A manager has kept all right of decision making with himself. Each and every employee has to come to him for orders again and again.
It means transfer of authority from a superior to a subordinate to operate within the prescribed limits.It has three elements – authority, responsibility and accountability.
Q. 30. At Alpha Ltd. all expenses bills of employees are processed by general manager himself. He feels quite overburdened. He decided to delegate this work to deputy general manager. But after sometime the deputy general manager, disperses this authority to various levels throughout the organization. Now all bills for travelling are processed through respective department supervisor;
Name the concept of management highlighted in above case before and after delegating the authority.
Ans. Before delegation of authority-centralization.
After delegating of authority-decentralization.