Test Your Knowledge Case Studies: HOTS/Evaluation Questions - Organising Commerce Notes | EduRev

Crash Course of Business Studies(BST)- Class 12

Commerce : Test Your Knowledge Case Studies: HOTS/Evaluation Questions - Organising Commerce Notes | EduRev

The document Test Your Knowledge Case Studies: HOTS/Evaluation Questions - Organising Commerce Notes | EduRev is a part of the Commerce Course Crash Course of Business Studies(BST)- Class 12.
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CASELECT 1: The Manager of Indian Plastic Ltd. believes that in order to successfully achieve the objectives of an organisation, all necessary activities are identified and similar activities are then put together in the same department. In this way production, marketing, human resource, finance and administrative departments are created.

On the basis of the given information about the manager of Indian Plastic Ltd., answer the following question:

Identify and explain the concept of management under which similar activities are put together and departments are setup. (3 Marks)

Solution : Departmentalisation: Departmentalisation refers to combining or grouping the

simitar or related jobs into larger units called departments, divisions or sections. Similar jobs can be grouped on the basis of functions, products, customers and territories etc.

Departmentalisation is done to achieve coordination and to facilitate unity of efforts.


CASELECT 2: Akshay has been appointed as a manager in Zoom Car, a company giving cars on rent. But he does not know who he has to take orders from and to whom he is accountable. The reporting relationship has not been established in the company.

On the basis of the given information about in Zoom Car, answer the following question:

(a) Identify the step of the process of a function of management highlighted in the above case.

(b) State the two steps which are performed immediately before this step. (3 Marks)

Solution :

(a) The step of the process of Organising highlighted in the above case is establishing

reporting relationships.

(b) The steps which are performed before this step are:

(i) Identification and division of work.

(ii) Departmentalisation.


CASELECT 3: MM Ltd. has decided that whenever an employee attains a particular age, he will be promoted. Influenced by this policy of the company, several people of other companies have joined the company. Later, they found that in this company communication was possible only on the basis of pre-determined relations. It was not possible for anyone to communicate freely with anyone.

On the basis of the given information about MM Ltd., answer the following question:

(a) Identify the type of organisation highlighted in the above case.

(b) List two limitations of the type of organisation highlighted in the above case. (3 Marks)

Solution :

(a) Formal organisation.

(b) The limitations of formal organisation are:

(i) Lack of initiative: The employees have to do what they are told to do and they have no

opportunity of thinking.

(ii) Limited in scope: It is difficult to understand all human relationships in an enterprise as it places more emphasis on structure and work.


CASELECT 4: The employees of Manik Ltd., a software company, have formed a dramatic group for their recreation.

Name the type of organisation so formed and state any two features of this type of organisation. (3 Marks)

Solution : Informal organisation.

The features of Informal organisation are:

(i) It originates within the formal organisation as a result of personal interaction among

employees.

(ii) It has no written rules and procedures.


CASELECT 5: The General Manager of Bookmark Ltd. has decided to start a new branch in Europe as apart of its expansion programme. The company has recognised the am art of work to be done in number of hours. The company has found out that it will take 40000 hours of man work and has subsequently divided the number of hours for different operations. Finally, the responsibility of the predetermined quantum of work was given to different individuals according to their capabilities.

On the basis of the given information about Bookmark Ltd, answer the following question:

(a) Identify the main function of management highlighted in above case.

(b) Identify the two steps of this function of management indicated above by quoting the relevant lines. (3 Marks)

Solution :

(a) The concept of management which is highlighted above is 'Organising'.

(b) The two steps of Organising which are indicated in the above case are:

(i) Step 1 - Identification and division of work: "The company has recognised the amount of work to be done in number of hours. The company has found out that it will take 40000 hours of man work and has subsequently divided the number of hours for different operations."

(ii) Step 2 - Assignment of duties: "Finally the responsibility of the pre-determined quantum of work was given to different individuals according to their capabilities."


CASELECT 6: The production manager asked the foreman to achieve a target production of 200 units per day, but he doesn't give him the authority to requisition tools and materials from the stores department.

Can the production manager blame the foreman if he is not able to achieve the desired target? Give reasons. (3 Marks)

Solution : No, the production manager can't blame the foreman if he is not able to achieve the desired target because foreman was only given responsibility not authority. There should be balance between authority and responsibility. If responsibility is given then authority for fulfilling that responsibility must be given otherwise the work can't be completed.


CASELECT 7: Mr. Arvind is an efficient manager working in a General Electric Company. He is fond of completing all his work by himself. As a human being he is very good and supportive and due to this he doesn't want to give burden of work to others. Sometimes he is so much involved in doing different type of works in the office that he even misses the priorities areas.

On the basis of the given information about General Electric Company answer the following question:

(a) Which concept of management is violated by Mr. Arvind?

(b) How the company will be adversely affected due to this violation? (3 Marks)

Solution :

(a) The concept of management which is violated here is 'Delegation'.

(b) Employees need for recognition won't be satisfied. They won't be able to develop their

skills if they are not assigned tasks in actual work environment.


CASELECT 8: Mr. Joseph Thornes is a production manager of a Polyplex Ltd. He has divided the work among his subordinates in accordance with their interest and ability. The subordinates are also given the authority to take decisions relating to their work. At the end of the first month of the year, it is found that Mr. Thomas has not achieved his target. Mr. Thomas has been asked to give a written explanation within two days stating the reason for the nonfulfillment of the assigned job.

On the basis of the given information about Mr. Joseph Thomes, the production manager of Polyplex Ltd., answer the following question:

Identify and explain the concept of management reflected by the conversation between Mr. Joseph Thornes and Mr. Thomas. (3 Marks)

Solution : Accountability: Accountability is answerability for outcome of the assigned task. It arises from responsibility. When the subordinates are assigned responsibility that creates obligation to carry out the tasks assigned. They also have to give an account of the results achieved, in terms of the standards of performance laid down. It flows upward from

subordinate to superior.


CASELECT 9: Amit Gupta, is a senior bank manager of a reputed Bank Branch situated at golf links Delhi. He has complete authority of approving high value queued up cash transactions passed by the clerical staff in his branch. He announced that, banks will remain open this Saturday and Sunday and its staff will do overtime till 21:00 hrs. for the next three days to clear the rush, Fearing a jump in footfalls to deposit or withdraw cash following  the demonetisation of Rs. 500 and Rs. 1000 Bank Notes. Due to heavy rush of customers in the branch, the senior manager is unable to approve all these cash transactions himself. Amit Gupta, who was earlier taking all decisions for the bank, had to selectively disperse the authority. He believed that the clerical staff members are competent, capable and resourceful and can assume responsibility for effective implementation of their decisions.

On the basis of the given information about Amit Gupta, answer the following questions:

(a) Identify the concept of management being followed by Amit Gupta, after the announcement by Government of India.

(b) List the significance of the concept identified in part (a) above. (4 Marks)

Solution :

(a) The concept of management being followed by Amit Gupta is Decentralisation of Authority.

(b) The importance of decentralisation are:

(i) Develops initiative amongst subordinates.

(ii) Quick and better decisions.

(iii) Relieves the top executives from excess workload.


CASELECT 10: CIE, an auto ancillary company promoted by Mahindra and Mahindra has taken initiatives to streamline business. This includes exiting low-margin products, closing unviable plants and adding high-margin products to boost earnings growth.

The endeavour of the Indian JV, Mahindra CIE, is to bring its current margin level of 9-10%.

Mahindra CIE has four verticals. First is Mahindra Forging Europe, which earns one-third of total revenue by supplying parts to commercial vehicle makers in Europe. The econd is CIE Forging caters to passenger vehicle makers in Europe and forms 26% of revenue. The third business, Metal castings and gears, contributes 7% to revenue by providing gears to offhighway makers. The fourth one, Component Quickie which focuses on India where it supplies parts to cars, tractors and truck makers and earns 34% of total revenue.

On the basis of the given information about CIE, an auto ancillary company promoted by Mahindra and Mahindra answer the following questions:

Suggest with the diagram a suitable organisation structure for the company.

State any three advantages of this organisation structure. (4 Marks)

Solution :

(a) Divisional structure is suitable for this multi-product company

Test Your Knowledge Case Studies: HOTS/Evaluation Questions - Organising Commerce Notes | EduRev


(b) The advantages of divisional structure are:

(i) Product specialisation helps in development of varied skills.

(ii) It helps in the fixation of responsibility as divisional heads 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.


CASELECT 11: Ambika Cottons Ltd. is dealing in readymade garment manufacturing and have three separate departments (Purchase, Production and Sales) and departmental heads to look after these functions. Recently the company reported a loss of Rs. 10 Lakhs in first quarter and Amrita, who is CEO of the company called all the departmental heads to discuss this matter. Departmental heads were blaming each other for this loss and it became very difficult for Amrita to fix the responsibility.

On the basis of the given information Ambika Cottons Ltd. answer the following question:

(a) The above case highlights the problems associated with a particular form of organisation structure. Identify that organisation structure.

(b) List the disadvantages of this type of organisation structure. (4 Marks)

Solution :

(a) Functional organisation structure has been adopted by Ambika Cotton Ltd. that has

resulted in difficulty in fixation of responsibility.

(b) The disadvantages of functional organisation structure adopted by Ambika Cotton Ltd. are:

(i) Ignorance of organisational objectives.

(ii) Difficulty in Inter-departmental coordination.

(iii) Hurdle in complete development.


CASELECT 12: Aman, Avneesh and Amish have decided to start a business of manufacturing toys. They identified the following main activities and which they have to perform:

(1) Purchase of raw materials.

(2) Purchase of machinery.

(3) Arrangement of finance.

(4) Production of toys.

(5) Sale of toys.

(6) Identifying the area where they can sell their toys.

(7) Selection of employees, in order to facilitate the work they thought that four managers should be appointed to look after.

(A) Production

(B) Finance

(C) Personnel

(a) Identify the function of management involved in the above mentioned Para.

(b) Quote the lines from the above Para which help you in identifying this function.

(c) State the steps followed in the process of management. (5 Marks)

Solution :

(a) Organising.

(b) (i) "They identified the following main activities which they have to perform".

(ii) "In order to facilitate the work they thought that four mangers should be appointed to look after....

(c) Steps in the process of organising:

(i) Identifying and dividing the work into manageable activities.

(ii) Departmentalisation/departmentation where activities of a similar natures are grouped together.

(iii) Assignment of duties to job positions.

(iv) Establishing reporting relationships so that each individual knows who he has to take

orders from and to whom he is accountable.


CASELECT 13: Eveready started its operation in 1905 by selling batteries and was incorporated in 1934 by Khaitan family under the name National Carbon Company. It became a part of Williamson Magor group in 1993 and changed its name to Eveready Industries Limited in 1995 and is currently headed by Mr. B.M. Khaitan, the Chairman. The company operates under four main business segments: Batteries, Flashlights, Lighting and Electrical Components and Packet Tea.

On the basis of the given information about Eveready Industries Limited answer the following questions:

(a) Suggest with the help of a diagram a suitable organisation structure for the company.

(b) State any three advantages of this organisation structure. (5 Marks)

Solution :

(a) Divisional structure:                                                                                                                                   Test Your Knowledge Case Studies: HOTS/Evaluation Questions - Organising Commerce Notes | EduRev

Test Your Knowledge Case Studies: HOTS/Evaluation Questions - Organising Commerce Notes | EduRev


(b) The advantages of Divisional structure are:

(i) Products specialisation helps in development of varied skills.

(ii) It helps in the fixation of responsibility as divisional heads 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.


CASELECT 14: Coral Laboratories Ltd. is a two decade old company with ultra modem strategically placed plants. The company's registered office is at Ghatkopar, Mumbai and plants are located at Daman, the marketing of medicines is undertaken from Dehradun.

On the basis of the given information about Coral Laboratories Ltd. answer the following questions:

(a) Which type of organisation structure should the company adopt.

(b) State any four advantages of this organisation structure. (5 Marks)

Solution : Coral Laboratories Ltd. should adopt functional structure as it is a single product company with different departments situated at different locations.

The company gets following advantages by adopting functional structure:

(i) Coordination is established: All the persons working within a departmental are specialists of their respective jobs. It makes the co-ordination easier at departmental level.

(ii) Helps in increasing managerial efficiency: Managers of one department are performing

same type of function again and again which makes them specialised and improves their

efficiency.

(iii) Minimises cost: It leads to minimum duplication of effort which results in economies of scale and thus lowers cost.


CASELECT 15: Elder Laboratories Ltd. is a company with ultra modern strategically placed plants. The company identifies the various types of activities to be done. For this it divides the work into various departments. The company then gets involved in its business with a lot of zeal. After one year of successful run the company decides to transfer the decision making authority to the lower most level of the employees. For this a major policy decision is taken.

On the basis of the given information about Elder Laboratories Ltd. answer the following questions:

(a) Identify the main function of management and its important concept highlighted in above case

(b) Explain any two significance of this function of management as well as its concept highlighted in above case. (5 Marks)

Solution :

(a) The function of management highlighted in the above case is 'Organising'. The concept of organising which is highlighted in the above case is 'Decentralisation'.

(b) The importance of organising is:

(i) Benefits of specialisation: In organising every individual is assigned a part of total work and not the whole task. This division of work into smaller units and repetitive performance leads to specialisation. Thus, organising promotes specialisation which in turn leads to efficient and speedy performance of tasks.

(ii) Clarity in working relationship: It helps in creating well defined jobs and also clarifying the limits of authority and responsibility of each job. The superior- subordinate relationship is clearly defined in organising.

The importance of decentralisation are:

(i) Develops initiative amongst subordinates: It helps to promote confidence because the subordinates are given freedom to take their own decisions.

(ii) Quick and better decisions: The burden of managerial decisions does not lie in the hands of few individuals but gets divided among various persons which helps them to take better and quick decisions.


CASELECT 16: Neha runs a factory wherein she manufactures 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 emit as the one stop for working women.

Which type of structure would you recommend for her expanded organisation and why? (5 Marks)

Solution : Divisional Structure is recommended for expanded organisation because the factory will manufacture three product. By this structure she may avail the benefits of products specialisation. The company gets following advantages by adopting divisional structure:

(i) Products specialisation helps in development of varied skills.

(ii) It helps in the fixation of responsibility as divisional heads 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.


CASELECT 17: A company, which manufactures a popular brand of toys, has been enjoying good market reputation. It has a functional organisational structure with separate departments for Production, Marketing, Finance, Human Resources and Research and Development. Lately to use its brand name and also to cash on to new business opportunities it is thinking to diversify into manufacture of new range of electronic toys for which a new market is emerging.

Prepare a report regarding organisation structure giving concrete reasons with regard to benefits the company will derive from the steps it should take. (5 Marks)

Solution : The company should shift from functional structure to divisional structure as the company is now diversifying by adding a new product line. By this structure, the performance of each product i.e., simple toys and electronic toys can be easily ascertained.

The company gets following advantages by adopting divisional structure:

(i) Products specialisation helps in development of varied skills.

(ii) It helps in the fixation of responsibility as divisional heads 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.

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