Previous Year: Long Questions with Answers - Organising | Business Studies (BST) Class 12 - Commerce PDF Download

Q. 1. Give the meaning of ‘Organising’.[Outside Delhi Set I 2015]
Ans. Organising : It is the process of defining and grouping of activities of the enterprise and establishing the authority relationship among them.

Q. 2. ‘Organising involves a series of steps in order to achieve the desired goals.’ Explain these steps.[Delhi Set I, II, III; Foreign Set III 2014] OR Explain the steps in the process of Organising.[Delhi Comptt. Set I, II, III 2014]
Ans. Organising as a process involves following steps :
(i) Identification and Division of Work : The first step in the organising process is identifying and dividing the whole work into manageable activities, so that duplication of work can be avoided and the burden of work can be reduced.
(ii) Departmentation : Departmentation refers to the process of grouping the activities of similar nature under the same department. Departmentalisation can be done on the basis of function, type of product, territory, etc. It facilitates specialisation in an organisation.
(iii) Assignment of Duties : This implies assigning duties to the workers according to their abilities and competencies. For getting best results, a proper match should exist between the nature of work and ability of the individual.
(iv) Establishing Reporting Relationships : Next step is to allocate authority and responsibility among employees in such a way that each person knows who is reporting to whom and for what, etc.

Q. 3. With the help of any four points, explain the crucial role of ‘Organising’ function in an enterprise.[Delhi Set I, Foreign Set III 2014] [Outside Delhi Comptt. Set-I 2017]
Ans. The importance of organising can be described as follows :
(i) Benefits of Specialisation : In organising, the whole work is divided into manageable activities and systematic allocation of work is done. It increases productivity and the efficiency of workers. As a result, due to repetitive work, workers get experience in particular fields which leads to specialisation.
(ii) Adaptation to changes : It facilitates business enterprise to accommodate changes in the workload caused by business environment. In case of change, organisation paves the way for revision of relationships at organisational levels.
(iii) Clarity in working relationships : Authority and responsibility are clearly defined in such a way that every person knows as to who is reporting to whom and for what, etc.
(iv) Optimum utilisation of resources : Proper allocation of resources helps in avoiding overlapping of work and ensures optimum use of all human, physical and financial resources.
(v) Effective Administration : By clearly describing the jobs related duties, duplication of work and confusion can be avoided in the organisation. Thus, it ensures effective administration.
(vi) Development of the personnel : Delegation of authority reduces the work load of a manager and enables him to explore new areas of growth for his organisation. It enables the subordinates to effectively deal with the challenges and to realise their full potential.
(vii) Expansion and growth : Organising enables an enterprise to take up new challenges. For example, more job positions, departments, new product lines, new geographical territories, etc. to increase sales/ profits, market share and growth of the enterprise.

Q. 4. What is meant by ‘Functional Structure’ of organisation ? Explain its any two advantages and two limitations. [Delhi Comptt. Set I 2011]
OR
What is meant by ‘Functional Organisational Structure’ ? State any two advantages and two disadvantages of such structure.[SQP 2011]
Ans. Functional structure of organisation means an organisational structure which is formed by grouping jobs of similar nature or functions and organising such functions into separate departments such as production, marketing, finance, etc.
Advantages :
(i) Specialisation : A functional structure leads to occupational specialisation since emphasis is placed on specific functions.
(ii) Efficiency : It helps in increasing managerial and operational efficiency and this result in increased profit.
(iii) Minimises costs : It leads to minimum duplication of effort which results in economies of scale and thus reduces cost.
(iv) Better control and coordination : It promotes control and coordination within a department because of similarity in the tasks being performed.
(v) Proper attention : It ensures that different functions get due attention.
(vi) Ease in training employees : It makes training of employees easier as the focus is only on a limited range of skills.
Disadvantages or Limitations :
(i) Functional empires : A functional structure places less emphasis on overall organisation than the departmental objectives. Such practices may lead to functional empires and the importance of a particular function (or department) may be overemphasised.
(ii) Problems in co-ordination : Pursuing departmental interest at the cost of organisational interests can also hinder the interaction between two or more departments. It may lead to problems in coordination among different departments.
(iii) Conflict of interests : A conflict of interests may arise among departments when the interests of two or more departments are not compatible.
(iv) Inflexibility : It may lead to inflexibility as people with same skills and knowledge base may develop a narrow perspective and thus have difficulty in appreciating each others point of view.

Q. 5. What is meant by “Divisional Structure” of an organisation ? For which type of business enterprise is this structure most suitable ? State any four advantages of this form of organisational structure.[Outside Delhi Set I 2011]
Ans. Divisional structure is an organisational structure comprising of separate business units or divisions. It is suitable for those enterprises :
(i) Where two or more products are manufactured.
(ii) When an organisation grows and diversifies.
Advantages of divisional structure :
(i) Product specialisation helps in the development of varied skills.
(ii) It helps in the fixation of responsibility as divisional heads who are accountable for profits, revenues and costs related to their departments.
(iii) It promotes flexibility, initiative and faster decision making as each division is an autonomous unit.
(iv) It facilitates expansion and growth as new divisions can be added without interrupting the existing operations.
(v) It reduces the problem of coordination between departments as all activities concerning a particular product line are integrated together.

Q. 6. A Steel Manufacturing Company has the following main jobs :
(i) Manufacturing
(ii) Finance
(iii) Marketing
(iv) Personnel
(v) Research and Development.
Which type of organisational structure will you choose for this type of a company and why ?[Delhi Comptt. Set I 2010]
Ans. Functional structure of organisation as all major functions can be performed well under separate specialised departments.

Q. 7. Shreyskar runs a lock manufacturing factory. He wants to expand his business. For expansion he contemplates to enter into the manufacturing of locks for cars as an ancillary company. By doing this, his company will be able to provide many products to car manufacturers.
Which type of organisational structure will he choose for his factory and why ? State any five advantages for this organisational structure.[Delhi Comptt. Set II 2010]
Ans. He will choose a ‘Divisional Structure’ for his factory as the factory is producing more than one product.

Q. 8. The functional structure of organisation has certain advantages and disadvantages which an enterprise must take into consideration before adopting it. Explain any such three advantages and any three disadvantages of this structure[Outside Delhi Comptt. 2017 Set II]
Ans. Advantages of Functional Structure :
(i) Leads to occupational specialisation
(ii) Promotes control and coordination
(iii) Increases efficiency
(iv) Low cost
(v) Makes training easier
(vi) Due attention to different functions
Disadvantages of Functional structure are :
(i) Creation of functional empires
(ii) Problems in coordination
(iii) Inter-departmental conflicts
(iv) Lack of accountability
(v) Inflexibility
(vi) Restriction in managerial development