Q1: Home Creations Ltd is a well-known chain of large department store offering various types of products under one roof. The company owns fifty stores in various parts of the country. Each store is placed under the charge of a manager who is allowed to rim their stores autonomously by deciding about the products which may be promoted, the appointment of staff, ways to handle customer complaints etc. As these managers have a deeper knowledge of the local situations, it enables them to take these decisions effectively keeping in view the local circumstances and consumers’ needs. This approach helps to improve customer service and at the same time serves to boost morale and increase the job satisfaction of the store managers as it empowers them to innovate and use their initiatives.
(a) Identify and explain the policy followed by ‘Home Creations Ltd.’ to run their stores successfully.
(b) Also, give any three points highlighting the importance of the approach followed as identified in part (a) of the question.
Ans: (a) The approach followed by ‘Home Creations Ltd.’ to run their stores successfully is Decentralisation. Decentralized decision-making is any process where the decision-making authority is distributed throughout a larger group. It also connotes a higher authority given to lower level functionaries, executives, and workers. This can be in any organization of any size, from a governmental authority to a corporation.
(b) The importance of decentralisation is highlighted through the following points:
Q2: In the context of the above case:
Ans: Span of management refers to the number of subordinates that can be effectively managed by a superior. It depends on the ability of the superiors, availability of time for supervision, the intelligence of subordinates and nature of work etc. Span of management gives shape to the organizational structure. It also helps an enterprise to adjust itself according to the environment changes. An effective manager is recognized through his span of management. The greater the span, the highly effective the manager.
Q3: What does the term ‘Span of management’ refer to?
Ans:
Q4: Describe the features of formal organisation?
Ans: Delegate authority due to the following reasons:
Q5: Explain the statement. “Delegation of authority helps in reducing the workload of managers”.
Ans: Divisional structure: Any organization that divides its employees and other resources into different groups based on regional and product differences, such that each group is responsible and answerable for its own actions, has a divisional structure. Under the divisional structure, an organization is divided into different divisions or units on the basis of products or geographical area Each division is a self-contained, semi-autonomous business unit. Each unit has a divisional manager responsible for performance and who has authority over the unit. There are certain matters, which are determined at the apex level only, viz goal determination and policy formation. It is suitable for those enterprises where
Advantages of the divisional structure are as follows:
Q6: What is meant by divisional structure of organisation? State its advantages.
Ans: The company should adopt ‘Functional Organisational structure’ due to the following reasons:
Q7: A company has its registered office in Delhi, manufacturing unit at Gurgaon and marketing and sales department at Faridabad. The company manufactures the consumer products. Which type of organisational structure should it adopt to achieve its target?
Ans: An organizational structure defines how activities such as task allocation, coordination and supervision are directed towards the achievement of organizational aims. It specifies the relationships between people, work and resources. It allows correlation and coordination among human, physical and financial resources and this enables a business enterprise to accomplish desired goals.
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