Worksheet Solutions: Organising | Business Studies (BST) Class 12 - Commerce PDF Download

Multiple Choice Questions 

Q1: What is the primary purpose of organizing in business?
(a) Planning
(b) Staffing
(c) Coordinating
(d) Structuring
Ans: (a)

Q2: Which of the following is a characteristic of a functional organizational structure?
(a) High degree of specialization
(b) Centralized decision-making
(c) Flexible communication channels
(d) Low coordination among departments
Ans: (a)

Q3: Which principle of organizing emphasizes that there should be a clear line of authority from top to bottom in an organization?
(a) Unity of command
(b) Division of labor
(c) Scalar chain
(d) Esprit de corps
Ans: (a)

Q4: In the context of organizing, what does the term 'Delegation of Authority' refer to?
(a) Assigning tasks to employees
(b) Granting power to subordinates to make decisions
(c) Centralizing decision-making at the top level
(d) Setting organizational goals
Ans: (b)

Q5: Which type of organization structure encourages employees to report to more than one boss?
(a) Functional structure
(b) Matrix structure
(c) Divisional structure
(d) Line organization
Ans: (b)

Very Short Answers

Q1: Explain the concept of span of management.
Ans: Span of management refers to the number of subordinates that a manager can efficiently supervise. A narrow span of management means fewer subordinates report to a manager, while a wide span of management means more subordinates report to a manager.

Q2: Define the term 'Decentralization.'
Ans: Decentralization refers to the process of delegating decision-making authority from higher levels to lower levels in an organization. It allows employees at various levels to make decisions and take actions independently.

Q3: Mention any two advantages of a matrix organizational structure.
Ans: Two advantages of a matrix organizational structure are:
(i) Enhanced communication and coordination between different functional areas.
(ii) Optimal utilization of resources and expertise from multiple departments.

Q4: Differentiate between formal and informal organization.
Ans: Formal organization refers to the officially planned structure of relationships and roles within an organization, established through organizational charts and job descriptions. Informal organization, on the other hand, consists of unofficial and spontaneous social relationships and interactions among employees, often based on friendships and common interests.

Q5: What is the significance of 'Departmentalization' in organizing?
Ans: Departmentalization is the process of grouping activities and people into departments based on common characteristics. It helps in achieving specialization, efficient management, and effective coordination within the organization.

Short Answers

Q1: Discuss any three principles of organization.
Ans: (i) Principle of Unity of Command: Each subordinate should receive orders and be accountable to only one superior, reducing confusion and conflicts.
(ii) Principle of Division of Work: Tasks and responsibilities should be divided among employees to enhance specialization and efficiency.
(iii) Principle of Scalar Chain: There should be a clear and unbroken chain of command for communication and decision-making, ensuring smooth flow of information.

Q2: Explain the concept of 'Delegation' and its importance in organizing.
Ans: Delegation is the process of transferring authority and responsibility from a manager to a subordinate to carry out specific tasks or make decisions. It is crucial in organizing as it:
(i) Empowers employees and enhances their skills and confidence.
(ii) Frees up managers' time, allowing them to focus on strategic tasks.
(iii) Improves organizational efficiency and agility by distributing workload effectively.

Q3: Describe the functional organizational structure and provide an example of a business using this structure.
Ans: The functional organizational structure groups employees based on specialized functions or roles, such as marketing, finance, and operations. Each function operates independently, headed by a functional manager. For example, a large software company may adopt a functional structure where different teams handle software development, marketing, finance, and customer support.

Q4: Explain the importance of coordination in the organizing process.
Ans: Coordination is vital in organizing as it ensures that different parts of the organization work together harmoniously to achieve common goals. It:
(i) Prevents conflicts and duplication of efforts among departments.
(ii) Enhances communication and collaboration among employees.
(iii) Facilitates efficient utilization of resources and supports the organization's overall strategy.

Q5: Discuss the challenges faced by managers in the process of organizing.
Ans: (i) Resistance to Change: Employees may resist changes in their roles or departmental structures, affecting the implementation of new organizational arrangements.
(ii) Balancing Centralization and Decentralization: Managers must strike a balance between centralizing key decisions for control and decentralizing authority to empower employees.
(iii) Managing Diversity: Organizations with diverse teams must address cultural differences and ensure equal opportunities and inclusivity in the organizing process.

Long Answers

Q1: Elaborate on the steps involved in the process of organizing.
Ans: Organizing involves several steps:
(i) Identification of Activities: Determining and defining the activities necessary to achieve organizational goals.
(ii) Division of Work: Breaking down activities into tasks and jobs, enabling specialization and efficiency.
(iii) Departmentalization: Grouping related tasks into departments based on functions, products, geography, or customers.
(iv) Assignment of Duties: Allocating responsibilities and tasks to employees and creating clear job descriptions.
(v) Establishing Reporting Relationships: Defining the hierarchical structure and reporting relationships within the organization.
(vi) Delegation of Authority: Granting authority to subordinates, allowing them to make decisions and carry out tasks.
(vii) Coordination: Ensuring seamless communication and collaboration between departments and individuals.

Q2: Discuss the advantages and disadvantages of the matrix organizational structure.
Ans: Advantages:
(i) Enhanced Communication: Encourages open communication between different functional areas, promoting information exchange.
(ii) Flexibility: Allows the organization to respond quickly to changes in the external environment or market demands.
(iii) Optimal Resource Utilization: Enables efficient use of resources from various departments, enhancing productivity.
Disadvantages:
(i) Complexity: Can be confusing due to multiple reporting relationships, leading to confusion and conflict.
(ii) Power Struggles: Employees might face power struggles between project managers and functional managers, causing tension.
(iii) Role Ambiguity: Employees may be unclear about their roles and responsibilities, impacting their performance.

Q3: Case 1: XYZ Corporation recently shifted from a traditional hierarchical structure to a flat organizational structure. As a result, employees are finding it challenging to adapt. Address the following sub-questions:
(a) What are the key features of a flat organizational structure?
Ans: A flat organizational structure has few levels of management, emphasizing a wide span of control. Key features include decentralization, increased autonomy, faster decision-making, and a focus on teamwork and collaboration.

(b) How can the organization effectively communicate the changes to employees?
Ans: (i) Conducting workshops and training sessions to educate employees about the benefits and reasons for the change.
(ii) Providing regular updates through newsletters, emails, and intranet platforms.
(iii) Encouraging open communication channels for employees to express concerns and ask questions.

(c) What strategies can the organization implement to ease the transition for employees?
Ans: (i) Establishing a support system, such as mentorship programs, to assist employees in adapting to the new structure.
(ii) Offering additional training and resources to help employees develop the skills needed in the flattened organization.
(iii) Recognizing and rewarding employees who successfully navigate the transition, fostering a positive culture.

Q4: Case 2: ABC Ltd. is a multinational company operating in diverse cultural environments. The organization is facing challenges in coordinating activities across different regions. Address the following sub-questions:
(a) What is the significance of coordination in a multinational company?
Ans: Coordination in a multinational company is crucial as it ensures that diverse teams across different regions work together efficiently to achieve common organizational goals. It helps in avoiding conflicts, promoting a unified strategy, and optimizing resource utilization.

(b) Identify and explain two strategies that ABC Ltd. can adopt to improve coordination.
Ans: (i) Implementing advanced communication technologies to facilitate real-time collaboration and information sharing among teams.
(ii) Establishing cross-cultural training programs to enhance understanding and appreciation of cultural differences, reducing misunderstandings and conflicts.

(c) How can ABC Ltd. maintain cultural diversity while ensuring a cohesive organizational culture?
Ans: (i) Promoting an inclusive and diverse workplace culture that values and respects different perspectives.
(ii) Encouraging cross-cultural interactions and knowledge sharing to build understanding and unity among employees from diverse backgrounds.
(iii) Integrating cultural diversity into organizational policies and practices, such as recruitment and employee development programs.

Q5: Case 3: LMN Company is facing challenges in managing decentralized decision-making. As a result, there is a lack of uniformity in the implementation of policies across various departments. Address the following sub-questions:
(a) Discuss the advantages of decentralized decision-making.
Ans: i. Empowerment: Decentralized decision-making empowers employees by giving them the authority to make decisions in their areas of expertise.
ii. Quick Response: Allows for faster decision-making and response to local or specific issues without waiting for approval from higher levels.
iii. Enhanced Motivation: Employees feel a sense of ownership and responsibility, leading to increased motivation and job satisfaction.

(b) What challenges might arise due to lack of uniformity in policy implementation?
Ans: (i) Inconsistency: Different departments may follow different procedures, leading to inconsistency in organizational practices.
(ii) Communication Issues: Lack of uniformity can result in confusion and miscommunication among employees about the company's policies and objectives.
(iii) Difficulty in Monitoring: Monitoring performance and ensuring compliance becomes challenging for top management.

(c)Propose strategies that LMN Company can implement to ensure better coordination despite decentralized decision-making.
Ans: (i) Clearly communicate overarching organizational goals and values to ensure alignment across all departments.
(ii) Implement regular cross-functional meetings and communication channels to facilitate information exchange and coordination.
(iii) Establish a framework for standardizing essential policies and procedures while allowing flexibility for department-specific adaptations.