Short Answer Questions | Business Studies (BST) Class 12 - Commerce PDF Download

Q1: How does informal system work.
Ans: An informal system works in an informal organisation without any formalities.
(a) An informal organisation originates from within the formal organisation as a result of personal interaction among employees.
(b) The standards of behaviour evolve from group norms rather than officially laid down rules and regulations.
(c) Independent channels of communication without specified direction of flow of information are developed by group members.

Q2: Write notes on functional org.
Ans: A functional structure is an organizational design that groups similar or related jobs together.
Managing Director
Personnel Marketing R & D Purchasing

• functional structure in formed by grouping together the entire work to be done into major functional department.
• All deptt are report to a coordinating head
• These dept may further be divide into sections.

 Q3: Explain the importance of organizing as a function of mgt.
Ans: The importance of organizing may be summarise as follows :-
(a) Benefits of specialization : The activities are grouped very carefully into specialized jobs on the basis of similarity. repetitive performance of a particular task leads to specialization.
(b) Clarity in working relationships : The jobs of managers and non managers are clearly defined & differentiated.
(c) Effective administration : Organising provides a clear description of a jobs and related duties. This helps to avoid confusion and duplication.
Clarity in working relationship enables proper execution of work. This brings effectiveness in administration.
(d) Source of support and security improves job satisfaction : Organising is a source of support, security and satisfaction to managers and employees in performing their assigned tasks. It recognizes the status levels of members; each one of the members enjoys a definite status and position in the organisation.
In a sound organisation every individual is assigned the job for which he is best suited. The assignment of right jobs to right persons improves job satisfaction among the employees.
(e) Optimum utilization of resources : A sound organisation helps In the optimum utilization of technological and human resources by avoiding duplication of work and overlapping of efforts.
(f) Adaptation of change : The process of organizing allows a business enterprise to adapt itself according to changes in the business environment. It allows the organisation structure to be suitably modified and the revision of interelationships amongst managerial levels to pave the way for a smooth running of the business.
(g) 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 gives them the time to explore areas for growth and opportunity to innovate, thereby strengthening the company’s competitive position.
(h) Expansion and growth : Organising helps in the growth and diversification of an enterprise. It allows a business enterprise to add more job positions, departments and even diversify their product lines.
Conclusion : Organising is a process by which the manager—

• brings order out of chaos,
• removes conflict among people over work or responsibility, and
• creates an environment suitable for teamwork.

 Q4: What do you mean by divisional organization? Explain its characteristics.
Ans: In large diversified organizations, activities and personnel are grouped into a number of divisions on the basis of different products manufactured or geographical areas.

•  Each unit or division has divisional manager responsible for performance and who has authority over the unit or the division.
• Each division is multi-functional because within each division functions like production, marketing, finance, purchase, etc., are performed together to achieve a common goal.
• Further, each division works as a profit center where the divisional head is responsible for the profit loss of his divisional.

For example, a large company may have divisions like cosmetics, garments, footwear, etc
Suitability

(i) Divisional structure is suitable for those business enterprises where a large variety of products are manufactured using different productive resources.
(ii) When an organisation grows and needs to add more employees, create more departments and introduce new levels of management, it will decide to adopt a divisional structure.

Q5: Give any three demerits of divisional organisation.
Ans: Demerits of Divisional structure
(i) Departmental conflicts : Conflict may arise among different divisions with reference to allocation of funds and further a particular division my seek to maximize its profits at the cost of other divisions.
(ii) Costly : It may lead to increase in costs since there may be a duplication of activities across products. Providing each division with separate set of similar functions increases expenditure.
(iii) Ignoring of organizational interests : It provides managers with the authority to supervise all activities related to a particular division. In course of time, such a manager may gain power and then he may ignore organizational interests.

Q6: Differentiate between formal and informal organisation on the basis of formation, purpose, structure and communication.
Ans:


Q7: State any 3 circumstances in which functional organisation is more suitable.
Ans: Functional structure is most suitable when
(i) the size of the organisation in large.
(ii) it has diversified activities.
(iii) operations require a high degree of specilisation.

Q8: Explain how organizing helps in ‘specialisation’ and co-ordination.
Ans: Organising helps in specialization through division of work, departmentalization, assignment of duties & establishing reporting relationships.

Q9: Explain the meaning of formal organisation.
Ans: Forma org. refers to the org. structure which is designed by the mgt. to achieve organizational goals.

Q10: Delegation of authority is based on the elementary principle of division of work. Explain.
Ans: In division of work, the work is divided into small tasks. Same way in delegation, the manager divides some of his work & authority among his subordinates. No manager can perform all the functions himself. To get the work done efficiently and in a specialized manner, the manager divides the work among his subordinates according to their qualification & capability.

Q11: Distinguish between decentralization and delegation on the basis of nature, control, need & responsibility.
Ans:



Q12: Question: Authority can be delegated but responsibility cannot. Explain.
Ans:  Authority can be delegated but responsibility cannot. Delegation does not mean abdication. The manager shall still be accountable for the performance of assigned tasks. The manager cannot escape from the responsibility for any default or mistake on the part of his subordinates.
Thus irrespective of the extent of delegated authority, the manager shall still be accountable to the same extent as before delegation.

Q13: Delegation of authority is necessary in all types of organizations. Explain with reasons in support.
Answer: Delegation of authority is necessary in all types of organizations. Reasons can be seen through the importance.
The importance of delegation of authority may be outlined as follows :

• Reduced workload of managers : Delegation of authority permits a manager to share his workload with his subordinates. By passing on the routine work to the subordinates, the manager is able to concentrate on more important aspects of his subordinates and is able to concentrate on policy matters and decision-making. This would increase his effectiveness. 
• Effective management : The manager who delegates authority can perform much more than the one who does not. This is because the manager can get some work done by his subordinates and is able to concentrate on policy matters and decision-making. This would increase his effectiveness. 
• Motivation of employees : Delegation implies grant of authority to the subordinates along with responsibility for work. A result, subordinates have a sense of recognition. They are motivated to work for higher performance. They do their job to the best of their abilities and skills. 
• Employee development : As a result of delegation, employees get more opportunities to utilize their talent. It allows to develop those skills which will improve their career prospects. It makes them better leaders and decision makers. Thus, delegation helps by preparing better future managers. 
• Facilitates organizational growth : Delegation helps in the expansion of an organisation by providing a ready work force to take up leading positions in new ventures. Trained and experienced employees are able to play significant roles in the launch of new projects for organizational growth. 
• Quick decision-making : The subordinates are granted sufficient authority to take decisions. They need not go to their superiors again and again for taking decisions concerning the routine matters. This increases the speed of decision-making.