NCERT Textbook - Organising | Business Studies (BST) Class 12 - Commerce PDF Download

 Page 1


ORGANISING
CHAPTER
5
It’s not quite there yet, but the goal is certainly within 
reach. One of India’s largest IT solutions providers, 
Wipro T echnologies, is taking on the likes of IBM and 
Accenture in its effort to be included among the largest 
and most successful technology services companies in 
the world.
Restructuring Wipro was considered the 
most important step in becoming a global giant, 
driven by the goal towards improved customer-
orientation.
During the past few months, Wipro separated 
itself into several subsidiaries by product line: 
telecommunications, engineering, financial 
services, etc. Each subsidiary brings in about $300 
million in annual earnings and is self-sufficient 
with their own accounting books, personnel and 
administrative functions. 
Wipro shifted from a centralised to  
decentralised management system. All 
responsibilities for growth lay with the 
management of each entity. 
“We tried to de-layer the organisation and 
empower our business leaders with a much higher 
degree of growth responsibility,” said Premji. “We 
removed an entire layer [of executives]”. 
Way T o Go, Wipro!
Adapted from an article by Heide B. Malhotra 
for Epoch Times Washington D.C. 
LEARNIN G 
OBJECTIVES
Once the plans have been laid down 
and objectives specified therein, the 
next step is to organise resources 
in a manner which leads to the 
accomplishment of objectives. A 
After studying this chapter you 
should be able to:
n Explain the concept of 
organising;
n 	 Explain the process of 
organising;
n 	 Describe the importance of 
organising;
n 	 Explain the meaning, advantages 
and disadvantages of functional 
organisation;
n 	 Explain the meaning, advantages  
and disadvantages of divisional 
organisation;
n 	 Explain the meaning, advantages 
and disadvantages of formal and 
informal organisation;
n 	 Distinguish between formal and 
informal organisation;
n 	 Explain the concept of 
delegation and decentralisation;
n 	 Describe the importance of 
delegation and decentralisation; 
and
n 	 Distinguish between delegation 
and decentralisation.
critical issue in accomplishing the 
goals specified in the planning 
process is structuring the work of an 
organisation to adapt to the dynamic 
business environment. The activities 
Ch_05.indd   109 08-08-2022   09:50:36
Reprint 2024-25
Page 2


ORGANISING
CHAPTER
5
It’s not quite there yet, but the goal is certainly within 
reach. One of India’s largest IT solutions providers, 
Wipro T echnologies, is taking on the likes of IBM and 
Accenture in its effort to be included among the largest 
and most successful technology services companies in 
the world.
Restructuring Wipro was considered the 
most important step in becoming a global giant, 
driven by the goal towards improved customer-
orientation.
During the past few months, Wipro separated 
itself into several subsidiaries by product line: 
telecommunications, engineering, financial 
services, etc. Each subsidiary brings in about $300 
million in annual earnings and is self-sufficient 
with their own accounting books, personnel and 
administrative functions. 
Wipro shifted from a centralised to  
decentralised management system. All 
responsibilities for growth lay with the 
management of each entity. 
“We tried to de-layer the organisation and 
empower our business leaders with a much higher 
degree of growth responsibility,” said Premji. “We 
removed an entire layer [of executives]”. 
Way T o Go, Wipro!
Adapted from an article by Heide B. Malhotra 
for Epoch Times Washington D.C. 
LEARNIN G 
OBJECTIVES
Once the plans have been laid down 
and objectives specified therein, the 
next step is to organise resources 
in a manner which leads to the 
accomplishment of objectives. A 
After studying this chapter you 
should be able to:
n Explain the concept of 
organising;
n 	 Explain the process of 
organising;
n 	 Describe the importance of 
organising;
n 	 Explain the meaning, advantages 
and disadvantages of functional 
organisation;
n 	 Explain the meaning, advantages  
and disadvantages of divisional 
organisation;
n 	 Explain the meaning, advantages 
and disadvantages of formal and 
informal organisation;
n 	 Distinguish between formal and 
informal organisation;
n 	 Explain the concept of 
delegation and decentralisation;
n 	 Describe the importance of 
delegation and decentralisation; 
and
n 	 Distinguish between delegation 
and decentralisation.
critical issue in accomplishing the 
goals specified in the planning 
process is structuring the work of an 
organisation to adapt to the dynamic 
business environment. The activities 
Ch_05.indd   109 08-08-2022   09:50:36
Reprint 2024-25
110 Business Studies
of an enterprise must be organised 
in such a manner that plans can be 
successfully implemented.
For planning to be fruitful a number 
of considerations like resources that 
will be needed, optimum utilisation 
of the same translation of work into 
attainable tasks, empowering the 
workforce to accomplish these tasks 
etc., need to be understood and dealt 
with properly.
It is evident from the way Wipro 
has moved towards reaching for 
it’s goal of becoming a globally 
successful technology company, 
that organising plays a significant 
role in implementation of plans.
What has Wipro done to become a 
contending force among other global 
giants? Are there lessons to be learnt 
from Wipro’s approach?
Wipro organised itself in a manner 
that allowed customer orientation to 
dominate over other goals and diversified 
on the basis of product lines. It also 
modified the relationships within the 
management hierarchy to suit the goals.
The management function of 
organising ensures that efforts are 
directed towards the attainment 
of goals laid down in the planning 
function in such a manner that 
resources are used optimally and 
people are able to work collectively 
and effectively for a common purpose. 
Thus, it is in the context of effective 
management that the organisation 
function earns due importance. It is 
a means for translating plans into 
action.
The organising function leads to the 
creation of an organisational structure 
which includes the designing of roles 
to be filled by suitably skilled people 
and defining the inter relationship 
between these roles so that ambi­
guity in performance of duties 
can be eliminated. Not only is this 
important for productive cooperation 
between the personnel but also for 
clarification of extent of authority, 
as well as responsibility for results 
and logical grouping of activities. 
Meaning Let us take an example to understand 
how organising takes place. Have 
you ever paid attention to how, the 
school fete which you enjoy so much, 
actually takes place? What goes on  
behind the scene to make it the 
desired reality you want? The whole 
activity is divided into task groups 
each dealing with a specific area like 
the food committee, the decoration 
committee, the ticketing committee 
and so on. These are under the 
overall supervision of the official in 
charge of the event. Coordinating 
relationships are established among 
the various groups to enable smooth 
interaction and clarity about each 
group’s contribution towards the 
event. All the above activities are a 
part of the organising function. 
Organising essentially implies a 
process which coordinates human 
efforts, assembles resources and 
integrates both into a unified whole 
Ch_05.indd   110 08-08-2022   09:50:36
Reprint 2024-25
Page 3


ORGANISING
CHAPTER
5
It’s not quite there yet, but the goal is certainly within 
reach. One of India’s largest IT solutions providers, 
Wipro T echnologies, is taking on the likes of IBM and 
Accenture in its effort to be included among the largest 
and most successful technology services companies in 
the world.
Restructuring Wipro was considered the 
most important step in becoming a global giant, 
driven by the goal towards improved customer-
orientation.
During the past few months, Wipro separated 
itself into several subsidiaries by product line: 
telecommunications, engineering, financial 
services, etc. Each subsidiary brings in about $300 
million in annual earnings and is self-sufficient 
with their own accounting books, personnel and 
administrative functions. 
Wipro shifted from a centralised to  
decentralised management system. All 
responsibilities for growth lay with the 
management of each entity. 
“We tried to de-layer the organisation and 
empower our business leaders with a much higher 
degree of growth responsibility,” said Premji. “We 
removed an entire layer [of executives]”. 
Way T o Go, Wipro!
Adapted from an article by Heide B. Malhotra 
for Epoch Times Washington D.C. 
LEARNIN G 
OBJECTIVES
Once the plans have been laid down 
and objectives specified therein, the 
next step is to organise resources 
in a manner which leads to the 
accomplishment of objectives. A 
After studying this chapter you 
should be able to:
n Explain the concept of 
organising;
n 	 Explain the process of 
organising;
n 	 Describe the importance of 
organising;
n 	 Explain the meaning, advantages 
and disadvantages of functional 
organisation;
n 	 Explain the meaning, advantages  
and disadvantages of divisional 
organisation;
n 	 Explain the meaning, advantages 
and disadvantages of formal and 
informal organisation;
n 	 Distinguish between formal and 
informal organisation;
n 	 Explain the concept of 
delegation and decentralisation;
n 	 Describe the importance of 
delegation and decentralisation; 
and
n 	 Distinguish between delegation 
and decentralisation.
critical issue in accomplishing the 
goals specified in the planning 
process is structuring the work of an 
organisation to adapt to the dynamic 
business environment. The activities 
Ch_05.indd   109 08-08-2022   09:50:36
Reprint 2024-25
110 Business Studies
of an enterprise must be organised 
in such a manner that plans can be 
successfully implemented.
For planning to be fruitful a number 
of considerations like resources that 
will be needed, optimum utilisation 
of the same translation of work into 
attainable tasks, empowering the 
workforce to accomplish these tasks 
etc., need to be understood and dealt 
with properly.
It is evident from the way Wipro 
has moved towards reaching for 
it’s goal of becoming a globally 
successful technology company, 
that organising plays a significant 
role in implementation of plans.
What has Wipro done to become a 
contending force among other global 
giants? Are there lessons to be learnt 
from Wipro’s approach?
Wipro organised itself in a manner 
that allowed customer orientation to 
dominate over other goals and diversified 
on the basis of product lines. It also 
modified the relationships within the 
management hierarchy to suit the goals.
The management function of 
organising ensures that efforts are 
directed towards the attainment 
of goals laid down in the planning 
function in such a manner that 
resources are used optimally and 
people are able to work collectively 
and effectively for a common purpose. 
Thus, it is in the context of effective 
management that the organisation 
function earns due importance. It is 
a means for translating plans into 
action.
The organising function leads to the 
creation of an organisational structure 
which includes the designing of roles 
to be filled by suitably skilled people 
and defining the inter relationship 
between these roles so that ambi­
guity in performance of duties 
can be eliminated. Not only is this 
important for productive cooperation 
between the personnel but also for 
clarification of extent of authority, 
as well as responsibility for results 
and logical grouping of activities. 
Meaning Let us take an example to understand 
how organising takes place. Have 
you ever paid attention to how, the 
school fete which you enjoy so much, 
actually takes place? What goes on  
behind the scene to make it the 
desired reality you want? The whole 
activity is divided into task groups 
each dealing with a specific area like 
the food committee, the decoration 
committee, the ticketing committee 
and so on. These are under the 
overall supervision of the official in 
charge of the event. Coordinating 
relationships are established among 
the various groups to enable smooth 
interaction and clarity about each 
group’s contribution towards the 
event. All the above activities are a 
part of the organising function. 
Organising essentially implies a 
process which coordinates human 
efforts, assembles resources and 
integrates both into a unified whole 
Ch_05.indd   110 08-08-2022   09:50:36
Reprint 2024-25
Organising 111
to be utilised for achieving specified 
objectives.
Organising can be defined as 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).
Step S in the p roce SS of 
o rgani Sing Organising involves a series of steps 
that need to be taken in order to 
achieve the desired goal. Let us try 
and understand how organising 
is carried out with the help of an 
example.
Suppose twelve students work for 
the school library in the summer 
vacations. One afternoon they are 
told to unload a shipment of new 
releases, stock the bookshelves, and 
then dispose of all waste (packaging, 
paper etc). If all the students decide 
to do it in their own way, it will result 
in mass confusion. However, if one 
student supervises the work by 
grouping students, dividing the work, 
assigning each group their quota and 
developing reporting relationships 
among them, the job will be done 
faster and in a better manner.
From the above description, the 
following steps emerge in the process 
of organising:
 (i) Identification and division 
of work: The first step in the 
process of organising involves 
identifying and dividing the 
work that has to be done in 
accordance with previously 
determined plans. The work 
is divided into manageable 
activities so that duplication 
can be avoided and the burden 
of work can be shared among 
the employees.  
 (ii) Departmentalisation: Once 
work has been divided into small 
and manageable activities then 
those activities  which are similar 
in nature are grouped together. 
Such sets facilitate specialisation. 
This grouping process is 
Organising is the process of identifying and grouping the work to 
be performed, defining and delegating responsibility and authority, 
and establishing relationships for the purpose of enabling people to 
work most effectively together in accomplishing objectives. 
Louis Allen 
Organising is the process of defining and grouping the activities of the 
enterprise and establishing authority relationships among them.
Theo Haimman
Definition of Organising
Ch_05.indd   111 08-08-2022   09:50:36
Reprint 2024-25
Page 4


ORGANISING
CHAPTER
5
It’s not quite there yet, but the goal is certainly within 
reach. One of India’s largest IT solutions providers, 
Wipro T echnologies, is taking on the likes of IBM and 
Accenture in its effort to be included among the largest 
and most successful technology services companies in 
the world.
Restructuring Wipro was considered the 
most important step in becoming a global giant, 
driven by the goal towards improved customer-
orientation.
During the past few months, Wipro separated 
itself into several subsidiaries by product line: 
telecommunications, engineering, financial 
services, etc. Each subsidiary brings in about $300 
million in annual earnings and is self-sufficient 
with their own accounting books, personnel and 
administrative functions. 
Wipro shifted from a centralised to  
decentralised management system. All 
responsibilities for growth lay with the 
management of each entity. 
“We tried to de-layer the organisation and 
empower our business leaders with a much higher 
degree of growth responsibility,” said Premji. “We 
removed an entire layer [of executives]”. 
Way T o Go, Wipro!
Adapted from an article by Heide B. Malhotra 
for Epoch Times Washington D.C. 
LEARNIN G 
OBJECTIVES
Once the plans have been laid down 
and objectives specified therein, the 
next step is to organise resources 
in a manner which leads to the 
accomplishment of objectives. A 
After studying this chapter you 
should be able to:
n Explain the concept of 
organising;
n 	 Explain the process of 
organising;
n 	 Describe the importance of 
organising;
n 	 Explain the meaning, advantages 
and disadvantages of functional 
organisation;
n 	 Explain the meaning, advantages  
and disadvantages of divisional 
organisation;
n 	 Explain the meaning, advantages 
and disadvantages of formal and 
informal organisation;
n 	 Distinguish between formal and 
informal organisation;
n 	 Explain the concept of 
delegation and decentralisation;
n 	 Describe the importance of 
delegation and decentralisation; 
and
n 	 Distinguish between delegation 
and decentralisation.
critical issue in accomplishing the 
goals specified in the planning 
process is structuring the work of an 
organisation to adapt to the dynamic 
business environment. The activities 
Ch_05.indd   109 08-08-2022   09:50:36
Reprint 2024-25
110 Business Studies
of an enterprise must be organised 
in such a manner that plans can be 
successfully implemented.
For planning to be fruitful a number 
of considerations like resources that 
will be needed, optimum utilisation 
of the same translation of work into 
attainable tasks, empowering the 
workforce to accomplish these tasks 
etc., need to be understood and dealt 
with properly.
It is evident from the way Wipro 
has moved towards reaching for 
it’s goal of becoming a globally 
successful technology company, 
that organising plays a significant 
role in implementation of plans.
What has Wipro done to become a 
contending force among other global 
giants? Are there lessons to be learnt 
from Wipro’s approach?
Wipro organised itself in a manner 
that allowed customer orientation to 
dominate over other goals and diversified 
on the basis of product lines. It also 
modified the relationships within the 
management hierarchy to suit the goals.
The management function of 
organising ensures that efforts are 
directed towards the attainment 
of goals laid down in the planning 
function in such a manner that 
resources are used optimally and 
people are able to work collectively 
and effectively for a common purpose. 
Thus, it is in the context of effective 
management that the organisation 
function earns due importance. It is 
a means for translating plans into 
action.
The organising function leads to the 
creation of an organisational structure 
which includes the designing of roles 
to be filled by suitably skilled people 
and defining the inter relationship 
between these roles so that ambi­
guity in performance of duties 
can be eliminated. Not only is this 
important for productive cooperation 
between the personnel but also for 
clarification of extent of authority, 
as well as responsibility for results 
and logical grouping of activities. 
Meaning Let us take an example to understand 
how organising takes place. Have 
you ever paid attention to how, the 
school fete which you enjoy so much, 
actually takes place? What goes on  
behind the scene to make it the 
desired reality you want? The whole 
activity is divided into task groups 
each dealing with a specific area like 
the food committee, the decoration 
committee, the ticketing committee 
and so on. These are under the 
overall supervision of the official in 
charge of the event. Coordinating 
relationships are established among 
the various groups to enable smooth 
interaction and clarity about each 
group’s contribution towards the 
event. All the above activities are a 
part of the organising function. 
Organising essentially implies a 
process which coordinates human 
efforts, assembles resources and 
integrates both into a unified whole 
Ch_05.indd   110 08-08-2022   09:50:36
Reprint 2024-25
Organising 111
to be utilised for achieving specified 
objectives.
Organising can be defined as 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).
Step S in the p roce SS of 
o rgani Sing Organising involves a series of steps 
that need to be taken in order to 
achieve the desired goal. Let us try 
and understand how organising 
is carried out with the help of an 
example.
Suppose twelve students work for 
the school library in the summer 
vacations. One afternoon they are 
told to unload a shipment of new 
releases, stock the bookshelves, and 
then dispose of all waste (packaging, 
paper etc). If all the students decide 
to do it in their own way, it will result 
in mass confusion. However, if one 
student supervises the work by 
grouping students, dividing the work, 
assigning each group their quota and 
developing reporting relationships 
among them, the job will be done 
faster and in a better manner.
From the above description, the 
following steps emerge in the process 
of organising:
 (i) Identification and division 
of work: The first step in the 
process of organising involves 
identifying and dividing the 
work that has to be done in 
accordance with previously 
determined plans. The work 
is divided into manageable 
activities so that duplication 
can be avoided and the burden 
of work can be shared among 
the employees.  
 (ii) Departmentalisation: Once 
work has been divided into small 
and manageable activities then 
those activities  which are similar 
in nature are grouped together. 
Such sets facilitate specialisation. 
This grouping process is 
Organising is the process of identifying and grouping the work to 
be performed, defining and delegating responsibility and authority, 
and establishing relationships for the purpose of enabling people to 
work most effectively together in accomplishing objectives. 
Louis Allen 
Organising is the process of defining and grouping the activities of the 
enterprise and establishing authority relationships among them.
Theo Haimman
Definition of Organising
Ch_05.indd   111 08-08-2022   09:50:36
Reprint 2024-25
112 Business Studies
called departmentalisation. 
Departments can be created 
using several criteria as a basis. 
Examples of some of the most 
popularly used basis are territory 
(north, south, west, etc.) and 
products (appliances, clothes, 
cosmetics etc).
 (iii) Assignment of duties: It is 
necessary to define the work 
of different job positions and 
accordingly allocate work 
to various employees. 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. It is essential 
for effective performance that a 
proper match is made between 
the nature of a job and the 
ability of an individual. The work 
must be assigned to those who 
are best fitted to perform it well.
 (iv) Establishing authority and 
reporting relationships: Merely 
allocating work is not enough. 
Each individual should also know 
who he has to take orders from 
and to whom he is accountable. 
The establishment of such clear 
relationships helps to create a 
hierarchal structure and helps 
in coordination amongst various 
departments.
i Mportance of o rgani Sing Performance of the organising 
function can pave the way for a 
smooth transition of the enterprise 
in accordance with the dynamic 
business environment. The 
significance of the organising 
function mainly arises from the fact 
that it helps in the survival and 
growth of an enterprise and equips 
it to meet various challenges. In 
order for any business enterprise to 
perform tasks and successfully meet 
goals, the organising function must 
be properly performed. The following 
points highlight the crucial role that 
organising plays in any business 
enterprise:
 (i) Benefits of specialisation:  
Organising leads to a systematic 
allocation of jobs amongst the 
work force. This reduces the 
workload as well as enhances 
productivity because of the 
specific workers performing  a 
Your school must have various societies for extra-curricular 
activities like the dramatics society, the quiz club, the economics 
society, the debating society and so on. Observe and list the way 
they have organised their activities using division of labour, chain of 
communication and the levels they have adopted for reporting on 
work. How far is this similar to the process you have read about?
Think About It
Ch_05.indd   112 08-08-2022   09:50:36
Reprint 2024-25
Page 5


ORGANISING
CHAPTER
5
It’s not quite there yet, but the goal is certainly within 
reach. One of India’s largest IT solutions providers, 
Wipro T echnologies, is taking on the likes of IBM and 
Accenture in its effort to be included among the largest 
and most successful technology services companies in 
the world.
Restructuring Wipro was considered the 
most important step in becoming a global giant, 
driven by the goal towards improved customer-
orientation.
During the past few months, Wipro separated 
itself into several subsidiaries by product line: 
telecommunications, engineering, financial 
services, etc. Each subsidiary brings in about $300 
million in annual earnings and is self-sufficient 
with their own accounting books, personnel and 
administrative functions. 
Wipro shifted from a centralised to  
decentralised management system. All 
responsibilities for growth lay with the 
management of each entity. 
“We tried to de-layer the organisation and 
empower our business leaders with a much higher 
degree of growth responsibility,” said Premji. “We 
removed an entire layer [of executives]”. 
Way T o Go, Wipro!
Adapted from an article by Heide B. Malhotra 
for Epoch Times Washington D.C. 
LEARNIN G 
OBJECTIVES
Once the plans have been laid down 
and objectives specified therein, the 
next step is to organise resources 
in a manner which leads to the 
accomplishment of objectives. A 
After studying this chapter you 
should be able to:
n Explain the concept of 
organising;
n 	 Explain the process of 
organising;
n 	 Describe the importance of 
organising;
n 	 Explain the meaning, advantages 
and disadvantages of functional 
organisation;
n 	 Explain the meaning, advantages  
and disadvantages of divisional 
organisation;
n 	 Explain the meaning, advantages 
and disadvantages of formal and 
informal organisation;
n 	 Distinguish between formal and 
informal organisation;
n 	 Explain the concept of 
delegation and decentralisation;
n 	 Describe the importance of 
delegation and decentralisation; 
and
n 	 Distinguish between delegation 
and decentralisation.
critical issue in accomplishing the 
goals specified in the planning 
process is structuring the work of an 
organisation to adapt to the dynamic 
business environment. The activities 
Ch_05.indd   109 08-08-2022   09:50:36
Reprint 2024-25
110 Business Studies
of an enterprise must be organised 
in such a manner that plans can be 
successfully implemented.
For planning to be fruitful a number 
of considerations like resources that 
will be needed, optimum utilisation 
of the same translation of work into 
attainable tasks, empowering the 
workforce to accomplish these tasks 
etc., need to be understood and dealt 
with properly.
It is evident from the way Wipro 
has moved towards reaching for 
it’s goal of becoming a globally 
successful technology company, 
that organising plays a significant 
role in implementation of plans.
What has Wipro done to become a 
contending force among other global 
giants? Are there lessons to be learnt 
from Wipro’s approach?
Wipro organised itself in a manner 
that allowed customer orientation to 
dominate over other goals and diversified 
on the basis of product lines. It also 
modified the relationships within the 
management hierarchy to suit the goals.
The management function of 
organising ensures that efforts are 
directed towards the attainment 
of goals laid down in the planning 
function in such a manner that 
resources are used optimally and 
people are able to work collectively 
and effectively for a common purpose. 
Thus, it is in the context of effective 
management that the organisation 
function earns due importance. It is 
a means for translating plans into 
action.
The organising function leads to the 
creation of an organisational structure 
which includes the designing of roles 
to be filled by suitably skilled people 
and defining the inter relationship 
between these roles so that ambi­
guity in performance of duties 
can be eliminated. Not only is this 
important for productive cooperation 
between the personnel but also for 
clarification of extent of authority, 
as well as responsibility for results 
and logical grouping of activities. 
Meaning Let us take an example to understand 
how organising takes place. Have 
you ever paid attention to how, the 
school fete which you enjoy so much, 
actually takes place? What goes on  
behind the scene to make it the 
desired reality you want? The whole 
activity is divided into task groups 
each dealing with a specific area like 
the food committee, the decoration 
committee, the ticketing committee 
and so on. These are under the 
overall supervision of the official in 
charge of the event. Coordinating 
relationships are established among 
the various groups to enable smooth 
interaction and clarity about each 
group’s contribution towards the 
event. All the above activities are a 
part of the organising function. 
Organising essentially implies a 
process which coordinates human 
efforts, assembles resources and 
integrates both into a unified whole 
Ch_05.indd   110 08-08-2022   09:50:36
Reprint 2024-25
Organising 111
to be utilised for achieving specified 
objectives.
Organising can be defined as 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).
Step S in the p roce SS of 
o rgani Sing Organising involves a series of steps 
that need to be taken in order to 
achieve the desired goal. Let us try 
and understand how organising 
is carried out with the help of an 
example.
Suppose twelve students work for 
the school library in the summer 
vacations. One afternoon they are 
told to unload a shipment of new 
releases, stock the bookshelves, and 
then dispose of all waste (packaging, 
paper etc). If all the students decide 
to do it in their own way, it will result 
in mass confusion. However, if one 
student supervises the work by 
grouping students, dividing the work, 
assigning each group their quota and 
developing reporting relationships 
among them, the job will be done 
faster and in a better manner.
From the above description, the 
following steps emerge in the process 
of organising:
 (i) Identification and division 
of work: The first step in the 
process of organising involves 
identifying and dividing the 
work that has to be done in 
accordance with previously 
determined plans. The work 
is divided into manageable 
activities so that duplication 
can be avoided and the burden 
of work can be shared among 
the employees.  
 (ii) Departmentalisation: Once 
work has been divided into small 
and manageable activities then 
those activities  which are similar 
in nature are grouped together. 
Such sets facilitate specialisation. 
This grouping process is 
Organising is the process of identifying and grouping the work to 
be performed, defining and delegating responsibility and authority, 
and establishing relationships for the purpose of enabling people to 
work most effectively together in accomplishing objectives. 
Louis Allen 
Organising is the process of defining and grouping the activities of the 
enterprise and establishing authority relationships among them.
Theo Haimman
Definition of Organising
Ch_05.indd   111 08-08-2022   09:50:36
Reprint 2024-25
112 Business Studies
called departmentalisation. 
Departments can be created 
using several criteria as a basis. 
Examples of some of the most 
popularly used basis are territory 
(north, south, west, etc.) and 
products (appliances, clothes, 
cosmetics etc).
 (iii) Assignment of duties: It is 
necessary to define the work 
of different job positions and 
accordingly allocate work 
to various employees. 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. It is essential 
for effective performance that a 
proper match is made between 
the nature of a job and the 
ability of an individual. The work 
must be assigned to those who 
are best fitted to perform it well.
 (iv) Establishing authority and 
reporting relationships: Merely 
allocating work is not enough. 
Each individual should also know 
who he has to take orders from 
and to whom he is accountable. 
The establishment of such clear 
relationships helps to create a 
hierarchal structure and helps 
in coordination amongst various 
departments.
i Mportance of o rgani Sing Performance of the organising 
function can pave the way for a 
smooth transition of the enterprise 
in accordance with the dynamic 
business environment. The 
significance of the organising 
function mainly arises from the fact 
that it helps in the survival and 
growth of an enterprise and equips 
it to meet various challenges. In 
order for any business enterprise to 
perform tasks and successfully meet 
goals, the organising function must 
be properly performed. The following 
points highlight the crucial role that 
organising plays in any business 
enterprise:
 (i) Benefits of specialisation:  
Organising leads to a systematic 
allocation of jobs amongst the 
work force. This reduces the 
workload as well as enhances 
productivity because of the 
specific workers performing  a 
Your school must have various societies for extra-curricular 
activities like the dramatics society, the quiz club, the economics 
society, the debating society and so on. Observe and list the way 
they have organised their activities using division of labour, chain of 
communication and the levels they have adopted for reporting on 
work. How far is this similar to the process you have read about?
Think About It
Ch_05.indd   112 08-08-2022   09:50:36
Reprint 2024-25
Organising 113
specific job on a regular basis. 
Repetitive performance of a 
particular task allows a worker 
to gain experience in that area 
and leads to specialisation.
 (ii) Clarity in working relation­
ships: 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 the fixation of 
responsibility and specification 
of the extent of authority to be 
exercised  by an individual. 
 (iii) Optimum utilisation of 
resources: Organising leads to 
the proper usage of all material, 
fin ancial and human resources. 
The proper assignment of jobs 
avoids overlapping of work and 
also makes possible the best 
use of resources. Avoidance 
of duplication of work helps 
in preventing confusion and 
minimising the wastage of 
resources and efforts. 
 (iv) Adaptation to change: The 
process of organising allows 
a business enterprise to 
accommodate changes in the 
business environment. It allows 
the organisation structure to be 
suitably modified and the revision 
of inter­relationships amongst 
managerial levels to pave the 
way for a smooth transition. 
It also provides much needed 
stability to the enterprise as it 
can then continue to survive 
and grow inspite of changes.
 (v) Effective administration: 
Organising provides a clear 
description of jobs and related 
duties. This helps to avoid confusion 
and duplication. Clarity in working 
relationships enables proper 
execution of work. Management 
of an enterprise thereby becomes 
easy and this brings effectiveness 
in administration.
 (vi) Development of personnel:
Organising stimulates creativity 
amongst the managers.  Effective 
delegation allows the managers 
to reduce their workload  by 
assigning routine jobs to their 
subordinates.  The  reduction in  
workload by delegation is not 
just necessary because of limited 
capacity of an individual but also 
allows the manager to develop new 
methods and ways of performing 
tasks. It gives them the time to 
explore areas for growth and the 
opportunity to innovate thereby 
strengthening the company’s 
competitive position.  Delegation 
also develops in the subordinate 
the ability to deal effectively with 
challenges and helps them to  
realise their full potential.
 (vii) Expansion and growth: Organ­
ising helps in the growth  and 
diversification of an enterprise  
Ch_05.indd   113 08-08-2022   09:50:36
Reprint 2024-25