Important Questions : Organizing Class 12 Notes | EduRev

Class 12 : Important Questions : Organizing Class 12 Notes | EduRev

 Page 1


 
 
CHAPTER -5 
ORGANISING 
Concept Mapping:- 
1. Concept and importance. 
2. Organizing Process. 
3. Structure of organization – functional and divisional 
4. Formal and informal organization. 
5. Delegation: concept, elements and importance. 
6. Decentralization: concept and importance. 
KEY CONCEPT IN NUTSHELL 
Organizing is the process of defining and grouping, activities and establishing authority 
relationships among them. 
Process: the process of organizing consists of the following steps: 
(a).Identification and division of work 
(b).Departmentalization 
(c).Assignment of Duties 
(d).Establishing reporting relationships. 
Importance: Organising is considered important because it leads to division of work, clarity 
in reporting relationships, optimum utilization of resources, growth, better administration 
and greater creativity. 
Organisational structure is the framework within which managerial and operating tasks are 
performed. It can be functional or divisional. 
Span of management is the number of subordinates under a superior. 
Functional structure groups activities on the basis of functions. The advantages of such a 
structure are specialization, better control, managerial efficiency and ease in training 
employees. The disadvantages are functional empires, conflict of interest, inflexibility and 
restriction in managerial development. 
Divisional structure groups activities on the basis of Product. The advantages are 
integration, product specialization greater accountability, flexibility, better coordination and 
more initiative .The disadvantages are departmental conflicts, costly process, ignoring of 
organizational interests, and increase in requirements of general managers. 
Formal organization is designed by the management to achieve organizational goals. Its 
advantages are fixation of responsibility, clarity of roles,  unity of command and effective 
Page 2


 
 
CHAPTER -5 
ORGANISING 
Concept Mapping:- 
1. Concept and importance. 
2. Organizing Process. 
3. Structure of organization – functional and divisional 
4. Formal and informal organization. 
5. Delegation: concept, elements and importance. 
6. Decentralization: concept and importance. 
KEY CONCEPT IN NUTSHELL 
Organizing is the process of defining and grouping, activities and establishing authority 
relationships among them. 
Process: the process of organizing consists of the following steps: 
(a).Identification and division of work 
(b).Departmentalization 
(c).Assignment of Duties 
(d).Establishing reporting relationships. 
Importance: Organising is considered important because it leads to division of work, clarity 
in reporting relationships, optimum utilization of resources, growth, better administration 
and greater creativity. 
Organisational structure is the framework within which managerial and operating tasks are 
performed. It can be functional or divisional. 
Span of management is the number of subordinates under a superior. 
Functional structure groups activities on the basis of functions. The advantages of such a 
structure are specialization, better control, managerial efficiency and ease in training 
employees. The disadvantages are functional empires, conflict of interest, inflexibility and 
restriction in managerial development. 
Divisional structure groups activities on the basis of Product. The advantages are 
integration, product specialization greater accountability, flexibility, better coordination and 
more initiative .The disadvantages are departmental conflicts, costly process, ignoring of 
organizational interests, and increase in requirements of general managers. 
Formal organization is designed by the management to achieve organizational goals. Its 
advantages are fixation of responsibility, clarity of roles,  unity of command and effective 
 
accomplishment of goals. Its disadvantages are procedural delays, inadequate recognition of 
creativity, limited in scope. 
Informal organization arises out of interaction among people at work. Its advantages are 
speed, fulfillment of social needs, fills inadequacies of formal structure. Its disadvantages are 
disruptive force, resistance to change and priority to group interests. 
Delegation is the transfer of authority from superior to subordinate. It has three elements: 
Authority, Responsibility and Accountability. Importance of delegation is that it helps in 
effective management, employee development, motivation, growth and coordination. 
Decentralization is delegation of authority throughout the organization. Importance of 
decentralization is that it helps in development of managerial talent, quick decision making 
burden on top management, development of initiative, growth and better control. 
 
KEY CONCEPTS QUESTIONS WITH ANSWERS 
 
1).Name the organization which is deliberately created?    1M 
A:  Formal Organisation 
2).Enumerate the steps in the process of organizing?     3M 
A: 1) Identification and division of work  2) Grouping Jobs and Departmentalisation 
3) Assignment of duties   4) Establishing authority relationship 
3).Organizing helps in optimum utilization of resources.  Which type of resources does 
it refer?            1M 
A:  All material, financial and human resources. 
4).Give any one importance of organizing?      1M 
A:  Development of personnel. 
5).Divisional structure is more suitable for the firms having several products and each 
product has distinct features. Do you agree?      1M 
A:  Yes, I do agree. 
6).Distinguish between functional structure and divisional structure.  4M 
Basis Functional Structure Divisional Structure. 
Formation It is based on functions It is based on product lines 
Specialisation Functional Specialisation Product Specialisation 
Responsibility Difficult to fix on a 
departments 
Easy to fix responsibility 
Cost Economical Costly 
Page 3


 
 
CHAPTER -5 
ORGANISING 
Concept Mapping:- 
1. Concept and importance. 
2. Organizing Process. 
3. Structure of organization – functional and divisional 
4. Formal and informal organization. 
5. Delegation: concept, elements and importance. 
6. Decentralization: concept and importance. 
KEY CONCEPT IN NUTSHELL 
Organizing is the process of defining and grouping, activities and establishing authority 
relationships among them. 
Process: the process of organizing consists of the following steps: 
(a).Identification and division of work 
(b).Departmentalization 
(c).Assignment of Duties 
(d).Establishing reporting relationships. 
Importance: Organising is considered important because it leads to division of work, clarity 
in reporting relationships, optimum utilization of resources, growth, better administration 
and greater creativity. 
Organisational structure is the framework within which managerial and operating tasks are 
performed. It can be functional or divisional. 
Span of management is the number of subordinates under a superior. 
Functional structure groups activities on the basis of functions. The advantages of such a 
structure are specialization, better control, managerial efficiency and ease in training 
employees. The disadvantages are functional empires, conflict of interest, inflexibility and 
restriction in managerial development. 
Divisional structure groups activities on the basis of Product. The advantages are 
integration, product specialization greater accountability, flexibility, better coordination and 
more initiative .The disadvantages are departmental conflicts, costly process, ignoring of 
organizational interests, and increase in requirements of general managers. 
Formal organization is designed by the management to achieve organizational goals. Its 
advantages are fixation of responsibility, clarity of roles,  unity of command and effective 
 
accomplishment of goals. Its disadvantages are procedural delays, inadequate recognition of 
creativity, limited in scope. 
Informal organization arises out of interaction among people at work. Its advantages are 
speed, fulfillment of social needs, fills inadequacies of formal structure. Its disadvantages are 
disruptive force, resistance to change and priority to group interests. 
Delegation is the transfer of authority from superior to subordinate. It has three elements: 
Authority, Responsibility and Accountability. Importance of delegation is that it helps in 
effective management, employee development, motivation, growth and coordination. 
Decentralization is delegation of authority throughout the organization. Importance of 
decentralization is that it helps in development of managerial talent, quick decision making 
burden on top management, development of initiative, growth and better control. 
 
KEY CONCEPTS QUESTIONS WITH ANSWERS 
 
1).Name the organization which is deliberately created?    1M 
A:  Formal Organisation 
2).Enumerate the steps in the process of organizing?     3M 
A: 1) Identification and division of work  2) Grouping Jobs and Departmentalisation 
3) Assignment of duties   4) Establishing authority relationship 
3).Organizing helps in optimum utilization of resources.  Which type of resources does 
it refer?            1M 
A:  All material, financial and human resources. 
4).Give any one importance of organizing?      1M 
A:  Development of personnel. 
5).Divisional structure is more suitable for the firms having several products and each 
product has distinct features. Do you agree?      1M 
A:  Yes, I do agree. 
6).Distinguish between functional structure and divisional structure.  4M 
Basis Functional Structure Divisional Structure. 
Formation It is based on functions It is based on product lines 
Specialisation Functional Specialisation Product Specialisation 
Responsibility Difficult to fix on a 
departments 
Easy to fix responsibility 
Cost Economical Costly 
 
Co ordination Difficult for multi  product 
company 
Easy, because all functions related 
to a particular product are 
integrated in one department. 
Managerial 
Development 
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 
development. 
 
7).What are the advantages and disadvantages of divisional structure?  5/6 M 
A):  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. 
Disadvantages: 
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 equipments 
4).Conflict may arise among different division.  
8) Name the type of organization in which:      1M 
a. 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  5/6M 
a) Formation     b.  Purpose c.  structure d.  Behavior of members   e. stability and 
f.  adherence to rules.     
.Ans: 
Basis Functional Structure Divisional Structure. 
Formation Deliberately Planned Emerges Spontaneously 
among people 
Purpose  To achieve organizational 
goals 
To satisfy social and cultural 
needs 
Structure Well defined structure Does not have a clear-cut 
Page 4


 
 
CHAPTER -5 
ORGANISING 
Concept Mapping:- 
1. Concept and importance. 
2. Organizing Process. 
3. Structure of organization – functional and divisional 
4. Formal and informal organization. 
5. Delegation: concept, elements and importance. 
6. Decentralization: concept and importance. 
KEY CONCEPT IN NUTSHELL 
Organizing is the process of defining and grouping, activities and establishing authority 
relationships among them. 
Process: the process of organizing consists of the following steps: 
(a).Identification and division of work 
(b).Departmentalization 
(c).Assignment of Duties 
(d).Establishing reporting relationships. 
Importance: Organising is considered important because it leads to division of work, clarity 
in reporting relationships, optimum utilization of resources, growth, better administration 
and greater creativity. 
Organisational structure is the framework within which managerial and operating tasks are 
performed. It can be functional or divisional. 
Span of management is the number of subordinates under a superior. 
Functional structure groups activities on the basis of functions. The advantages of such a 
structure are specialization, better control, managerial efficiency and ease in training 
employees. The disadvantages are functional empires, conflict of interest, inflexibility and 
restriction in managerial development. 
Divisional structure groups activities on the basis of Product. The advantages are 
integration, product specialization greater accountability, flexibility, better coordination and 
more initiative .The disadvantages are departmental conflicts, costly process, ignoring of 
organizational interests, and increase in requirements of general managers. 
Formal organization is designed by the management to achieve organizational goals. Its 
advantages are fixation of responsibility, clarity of roles,  unity of command and effective 
 
accomplishment of goals. Its disadvantages are procedural delays, inadequate recognition of 
creativity, limited in scope. 
Informal organization arises out of interaction among people at work. Its advantages are 
speed, fulfillment of social needs, fills inadequacies of formal structure. Its disadvantages are 
disruptive force, resistance to change and priority to group interests. 
Delegation is the transfer of authority from superior to subordinate. It has three elements: 
Authority, Responsibility and Accountability. Importance of delegation is that it helps in 
effective management, employee development, motivation, growth and coordination. 
Decentralization is delegation of authority throughout the organization. Importance of 
decentralization is that it helps in development of managerial talent, quick decision making 
burden on top management, development of initiative, growth and better control. 
 
KEY CONCEPTS QUESTIONS WITH ANSWERS 
 
1).Name the organization which is deliberately created?    1M 
A:  Formal Organisation 
2).Enumerate the steps in the process of organizing?     3M 
A: 1) Identification and division of work  2) Grouping Jobs and Departmentalisation 
3) Assignment of duties   4) Establishing authority relationship 
3).Organizing helps in optimum utilization of resources.  Which type of resources does 
it refer?            1M 
A:  All material, financial and human resources. 
4).Give any one importance of organizing?      1M 
A:  Development of personnel. 
5).Divisional structure is more suitable for the firms having several products and each 
product has distinct features. Do you agree?      1M 
A:  Yes, I do agree. 
6).Distinguish between functional structure and divisional structure.  4M 
Basis Functional Structure Divisional Structure. 
Formation It is based on functions It is based on product lines 
Specialisation Functional Specialisation Product Specialisation 
Responsibility Difficult to fix on a 
departments 
Easy to fix responsibility 
Cost Economical Costly 
 
Co ordination Difficult for multi  product 
company 
Easy, because all functions related 
to a particular product are 
integrated in one department. 
Managerial 
Development 
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 
development. 
 
7).What are the advantages and disadvantages of divisional structure?  5/6 M 
A):  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. 
Disadvantages: 
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 equipments 
4).Conflict may arise among different division.  
8) Name the type of organization in which:      1M 
a. 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  5/6M 
a) Formation     b.  Purpose c.  structure d.  Behavior of members   e. stability and 
f.  adherence to rules.     
.Ans: 
Basis Functional Structure Divisional Structure. 
Formation Deliberately Planned Emerges Spontaneously 
among people 
Purpose  To achieve organizational 
goals 
To satisfy social and cultural 
needs 
Structure Well defined structure Does not have a clear-cut 
 
structure 
Behavior of members Standards of behavior Mutual consent  among 
members 
Stability  It is stable  Neither stable nor predictable. 
Adherence to rules Violation 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?     1M 
Ans: Responsibility, Authority, Accountability.   
12) Distinguish between authority and responsibility on the basis of:  3M  
a. Direction of flow   b. Delegation    c.  Origin 
Basis Authority Responsibility 
Direction of flow Authority flows 
downwards 
Responsibility flows 
upwards 
Delegation Authority can be delegated Responsibility is absolute 
and cannot be delegated. 
Origin Arises from law  Arises 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.        4M 
A:  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?            1M 
A:  Decentralization implies extension of delegation to the lowest level of management. 
 
 
 
 
Page 5


 
 
CHAPTER -5 
ORGANISING 
Concept Mapping:- 
1. Concept and importance. 
2. Organizing Process. 
3. Structure of organization – functional and divisional 
4. Formal and informal organization. 
5. Delegation: concept, elements and importance. 
6. Decentralization: concept and importance. 
KEY CONCEPT IN NUTSHELL 
Organizing is the process of defining and grouping, activities and establishing authority 
relationships among them. 
Process: the process of organizing consists of the following steps: 
(a).Identification and division of work 
(b).Departmentalization 
(c).Assignment of Duties 
(d).Establishing reporting relationships. 
Importance: Organising is considered important because it leads to division of work, clarity 
in reporting relationships, optimum utilization of resources, growth, better administration 
and greater creativity. 
Organisational structure is the framework within which managerial and operating tasks are 
performed. It can be functional or divisional. 
Span of management is the number of subordinates under a superior. 
Functional structure groups activities on the basis of functions. The advantages of such a 
structure are specialization, better control, managerial efficiency and ease in training 
employees. The disadvantages are functional empires, conflict of interest, inflexibility and 
restriction in managerial development. 
Divisional structure groups activities on the basis of Product. The advantages are 
integration, product specialization greater accountability, flexibility, better coordination and 
more initiative .The disadvantages are departmental conflicts, costly process, ignoring of 
organizational interests, and increase in requirements of general managers. 
Formal organization is designed by the management to achieve organizational goals. Its 
advantages are fixation of responsibility, clarity of roles,  unity of command and effective 
 
accomplishment of goals. Its disadvantages are procedural delays, inadequate recognition of 
creativity, limited in scope. 
Informal organization arises out of interaction among people at work. Its advantages are 
speed, fulfillment of social needs, fills inadequacies of formal structure. Its disadvantages are 
disruptive force, resistance to change and priority to group interests. 
Delegation is the transfer of authority from superior to subordinate. It has three elements: 
Authority, Responsibility and Accountability. Importance of delegation is that it helps in 
effective management, employee development, motivation, growth and coordination. 
Decentralization is delegation of authority throughout the organization. Importance of 
decentralization is that it helps in development of managerial talent, quick decision making 
burden on top management, development of initiative, growth and better control. 
 
KEY CONCEPTS QUESTIONS WITH ANSWERS 
 
1).Name the organization which is deliberately created?    1M 
A:  Formal Organisation 
2).Enumerate the steps in the process of organizing?     3M 
A: 1) Identification and division of work  2) Grouping Jobs and Departmentalisation 
3) Assignment of duties   4) Establishing authority relationship 
3).Organizing helps in optimum utilization of resources.  Which type of resources does 
it refer?            1M 
A:  All material, financial and human resources. 
4).Give any one importance of organizing?      1M 
A:  Development of personnel. 
5).Divisional structure is more suitable for the firms having several products and each 
product has distinct features. Do you agree?      1M 
A:  Yes, I do agree. 
6).Distinguish between functional structure and divisional structure.  4M 
Basis Functional Structure Divisional Structure. 
Formation It is based on functions It is based on product lines 
Specialisation Functional Specialisation Product Specialisation 
Responsibility Difficult to fix on a 
departments 
Easy to fix responsibility 
Cost Economical Costly 
 
Co ordination Difficult for multi  product 
company 
Easy, because all functions related 
to a particular product are 
integrated in one department. 
Managerial 
Development 
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 
development. 
 
7).What are the advantages and disadvantages of divisional structure?  5/6 M 
A):  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. 
Disadvantages: 
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 equipments 
4).Conflict may arise among different division.  
8) Name the type of organization in which:      1M 
a. 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  5/6M 
a) Formation     b.  Purpose c.  structure d.  Behavior of members   e. stability and 
f.  adherence to rules.     
.Ans: 
Basis Functional Structure Divisional Structure. 
Formation Deliberately Planned Emerges Spontaneously 
among people 
Purpose  To achieve organizational 
goals 
To satisfy social and cultural 
needs 
Structure Well defined structure Does not have a clear-cut 
 
structure 
Behavior of members Standards of behavior Mutual consent  among 
members 
Stability  It is stable  Neither stable nor predictable. 
Adherence to rules Violation 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?     1M 
Ans: Responsibility, Authority, Accountability.   
12) Distinguish between authority and responsibility on the basis of:  3M  
a. Direction of flow   b. Delegation    c.  Origin 
Basis Authority Responsibility 
Direction of flow Authority flows 
downwards 
Responsibility flows 
upwards 
Delegation Authority can be delegated Responsibility is absolute 
and cannot be delegated. 
Origin Arises from law  Arises 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.        4M 
A:  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?            1M 
A:  Decentralization implies extension of delegation to the lowest level of management. 
 
 
 
 
 
15) Distinguish between ‘delegation’ and ‘decentralisation’ of authority on the basis of  
i) purpose  ii) parties involved and  iii) withdrawal of authority. 
Ans: 
Basis Delegation Decentralisation 
Purpose It means getting things done 
through subordinates 
To prepare the organization for 
handling major expansion of its 
activities 
Parties 
involved 
It is confined with manager and 
his immediate subordinate 
It indicates relationship between top 
management and various other 
departments 
Withdrawal 
of authority 
The delegated authority can be 
withdrawn by the delegator 
Withdrawal of authority is difficult 
 
QUESTIONS WITH DIFFERENT DIFFICULTY LEVELS 
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.                     1M 
A:  Organising 
2. Name and explain the two steps in the process o organizing which come after 
‘Identification and division of work’ and ‘Departmentalization’.   3M 
A: Identification and division of work:  Dividing the total work into jobs is necessary because 
the entire work cannot be done by individual (ii)Departmentalisation:  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 M  
A:  Benefits of specialisation . 
4. Organising clarifies lines of communication and specifies who is to report to whom.  
Mention the importance of organizing indicated here.    1 M 
A: 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.                                                             3M 
A: I would suggest functional structure for Aman Limited. 
Advantages of this structure:   
i. Supervision is facilitated. 
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