Test: Organising - 2 - Commerce MCQ

Authority is the right or power assigned to an executive or a manager in order to achieve certain organizational objectives.

It indicates the right and power of making decisions, giving orders and instructions to subordinates. Authority is delegated from above but must be accepted from below i.e. by the subordinates. In other words, authority flows downwards.

In philosophy, moral responsibility is the status of morally deserving praise, blame, reward, or punishment for an act or omission, in accordance with one's moral obligations. Deciding what counts as "morally obligatory" is a principal concern of ethics.

Accountability:

• Definition: Accountability refers to the responsibility and answerability of an individual for the final outcome of a task or assignment.


• Importance: Accountability plays a crucial role in ensuring that tasks are completed effectively and efficiently.


• Key Points:




• Under accountability, a person is answerable for the final outcome of the assigned task.


• Accountability helps in fostering a sense of ownership and responsibility.


• It promotes transparency and trust within an organization.


• Accountability ensures that individuals are held responsible for their actions and decisions.


• It helps in identifying and addressing any gaps or shortcomings in the completion of tasks.


• Accountability contributes to personal and professional growth.

Conclusion:

In conclusion, accountability is an important aspect of any organization or individual. It ensures that tasks are completed with responsibility and efficiency. By being answerable for the final outcome of assigned tasks, individuals can contribute to the overall success and growth of the organization.

Responsibility can not be delegated but authority and accountability can be delegated. Responsibility means the work assigned to an individual. Authority means the power to take decision. Accountability means subordinates will be answerable for the non-completion of the task. Accountability can not be passed or delegated.

Flow of Authority:

• Definition: The flow of authority refers to the direction in which decision-making power and commands are passed down in an organizational hierarchy.


• Superior and Subordinate: The terms superior and subordinate are used to describe the hierarchical relationship between individuals in an organization. A superior is someone who holds a higher position in the organizational hierarchy, while a subordinate is someone who holds a lower position.

Flow of Authority in the Organizational Hierarchy:

• Superior to Subordinate: In an organizational hierarchy, the flow of authority generally moves from the superior to the subordinate. This means that those in higher positions have the power and authority to delegate tasks, make decisions, and give orders to those in lower positions.

Options:

• Accountability: Accountability refers to the obligation of individuals or departments to take responsibility for their actions and decisions. While accountability is an important aspect of organizational functioning, it does not directly determine the flow of authority.


• Responsibility: Responsibility refers to the duty or obligation to perform certain tasks or roles. While responsibility is related to the flow of authority, it does not determine the direction of the flow.


• Authority: Authority refers to the legitimate power or right to give orders, make decisions, and enforce obedience. The flow of authority moves from the superior to the subordinate, indicating that authority lies with those in higher positions.


• None of these: This option is incorrect as the correct answer is C: "Authority."

Conclusion:

In the given scenario, the correct answer is C: "Authority." The flow of authority in an organizational hierarchy moves from the superior to the subordinate, indicating that those in higher positions have the authority to delegate tasks and make decisions.

Process of Organising – Determination of Objectives, Division of Activities, Grouping of Activities, Defining Authority and Responsibility, Reviewing and Reorganising.
So, the first step of the process of organizing is Determination of Objectives: Organisation is established for some objective. Overall tasks or activities of the organisation are determined to achieve this goal.

Establishing reporting relationship is the final step as in the end all the reports are submitted and charts and manuals are prepared for better and efficient running of the organization.

Product Specialisation is concerned with Divisional Structure.
Product Specialisation refers to a type of organizational structure in which the company is divided based on its product lines or brands. This structure allows for a focused approach towards specific products or services, enabling better coordination and decision-making within each division.
Some key points to consider regarding product specialisation and divisional structure are:
1. Definition: Product specialisation is a type of divisional structure where the company is divided into different divisions based on specific products or services.
2. Focus: Each division within the organization focuses on a specific product or brand, allowing for a deep understanding and expertise in that particular area.
3. Autonomy: Divisions have a high degree of autonomy in decision-making, which allows them to respond quickly to market changes and customer demands.
4. Coordination: While each division operates independently, there is still a need for coordination and collaboration between divisions to ensure overall organizational goals are met.
5. Resource Allocation: Resources such as budget, personnel, and equipment are allocated to each division based on the specific needs and requirements of that product line or brand.
6. Performance Evaluation: Each division is evaluated based on its own performance metrics, such as sales, profitability, and market share, rather than the overall performance of the organization.
7. Advantages: Product specialisation allows for a focused approach, better customer service, and the ability to tailor products and services to specific market segments.
8. Disadvantages: It can lead to duplication of resources and efforts between divisions, lack of coordination, and potential conflicts between divisions.
In conclusion, product specialisation is concerned with divisional structure, where each division focuses on a specific product or brand. This structure allows for a more focused and specialized approach, enabling better coordination and decision-making within each division.

The formal organisation structure concentrates on the jobs to be performed. It, therefore, makes everybody responsible for a given task. A formal organisation is bound by rules, regulations and procedures. It thus ensures law and order in the organisation. The organisation structure enables the people of the organisation to work together for accomplishing the common objectives of the enterprise

Informal organization are opposite of formal organization. They represent non-planned, unofficial, social interactions amongst people working in formal structures. They arise out of common interests of people.

Delegation is the assignment of any responsibility or authority to another person to carry out specific activities. It is one of the core concepts of management leadership. However, the person who delegated the work remains accountable for the outcome of the delegated work.

The correct answer is A: Business risks.
Explanation:
Business risks refer to the possibilities of inadequate profits or even losses due to uncertainties. These uncertainties can arise from various factors such as changes in market conditions, economic downturns, competition, technological advancements, regulatory changes, and natural disasters. It is important for businesses to identify and assess these risks to develop effective risk management strategies.
Here is a detailed explanation of each option:
A: Business risks:
- Business risks are uncertainties that can lead to inadequate profits or losses.
- These risks are inherent in any business operation and can arise from various factors.
- Managing and mitigating these risks is crucial for the success and sustainability of a business.
B: Business contingencies:
- Business contingencies refer to backup plans or alternative strategies that businesses can implement in response to unforeseen events or emergencies.
- While contingencies can help mitigate the impact of risks, they are not the same as risks themselves.
C: Business ventures:
- Business ventures refer to new business projects or initiatives undertaken by individuals or organizations.
- While ventures involve risks, the term itself does not encompass the broader concept of risks and uncertainties.
D: None of these:
- This option is incorrect as business risks are indeed the possibilities of inadequate profits or losses due to uncertainties.
To summarize, the possibilities of inadequate profits or even losses due to uncertainties are known as business risks. It is important for businesses to proactively identify, assess, and manage these risks to ensure their long-term success.

Being accountable means being ultimately answerable for your actions. You’ll only be accountable when there is a responsibility given to you. So, we can say accountability arises from responsibility.

Responsibility means state of being accountable or answerable for any obligation. Authority and responsibility are closely related and this principle states that these two must go hand in hand. It means that proper authority should be delegated to meet the responsibilities.

Organisation establishes relationship between:
The correct answer is A: People, work, and resources.
Explanation:
An organization is a structured entity that brings together different elements to achieve its goals and objectives. The establishment of relationships between these elements is crucial for the smooth functioning and success of the organization. The relationship between people, work, and resources is essential for effective organizational management.
Here is a detailed explanation of the relationship between people, work, and resources:
1. People: People are the employees or members of an organization who contribute their skills, knowledge, and efforts to accomplish the work tasks. They are the human capital that drives the organization forward.
2. Work: Work refers to the tasks, activities, and projects that need to be completed within the organization. It includes both individual work and collaborative efforts towards achieving the organization's objectives.
3. Resources: Resources include the physical, financial, and technological assets that an organization possesses. These resources are essential for the smooth execution of work tasks and enable people to perform their roles effectively.
The relationship between these elements can be understood as follows:
- People and Work: People are responsible for performing the work tasks assigned to them. They bring their skills, knowledge, and dedication to complete the work efficiently and effectively. The organization ensures that the right people are assigned to the right tasks based on their abilities and expertise.
- People and Resources: People utilize the available resources to carry out their work tasks. They require access to necessary equipment, tools, technology, and materials to perform their roles effectively. The organization provides the required resources to enable people to accomplish their work efficiently.
- Work and Resources: Work tasks require the utilization of resources. The organization allocates resources based on the nature of the work, ensuring that the necessary tools, equipment, and materials are available to complete the tasks. Adequate resource allocation ensures that work can be carried out smoothly and efficiently.
Therefore, the relationship between people, work, and resources is crucial for the success of an organization. By effectively managing these relationships, organizations can optimize their performance, enhance productivity, and achieve their goals.

Meaning of authority is:
Authority refers to the power or right to command, make decisions, and enforce obedience. It is a fundamental concept in social, political, and organizational contexts. Here is a detailed explanation of the meaning of authority:
1. Definition: Authority is the legitimate power or right to give orders, make decisions, and enforce obedience within a specific context or domain.
2. Types of Authority: There are various types of authority, including:
- Traditional Authority: Based on long-established customs, traditions, and beliefs.
- Legal or Rational Authority: Derived from laws, rules, and regulations.
- Charismatic Authority: Derived from personal qualities, charisma, and influence.
3. Right to Command: Authority grants individuals or entities the right to command or give orders to others. This power is often accompanied by the responsibility to ensure compliance and enforce obedience.
4. Superior-Subordinate Relationship: Authority establishes a hierarchical relationship between those in positions of authority (superiors) and those who must comply with their commands (subordinates).
5. Legitimacy: Authority is typically perceived as legitimate when it is based on accepted norms, laws, or social structures. Legitimate authority is more likely to be respected and followed by subordinates.
6. Scope and Limitations: Authority may have varying scopes and limitations depending on the specific context. It may be limited to certain areas, timeframes, or situations, and it may also be subject to checks and balances.
7. Authority and Power: Authority and power are closely related but distinct concepts. While authority refers to the right to command, power refers to the ability to influence or control others. Authority often derives its power from the legitimacy it holds within a particular system or organization.
In conclusion, authority is the right to command, make decisions, and enforce obedience within a specific context. It establishes a superior-subordinate relationship and is typically perceived as legitimate when based on accepted norms or laws. Understanding authority is crucial for effective governance, leadership, and social order.

Decentralisation is the spread of power from central to local branches. Main authorities gave some power to their subordinates so that the subordinates are also able to take decisions on their own for the firm.In short they have freedom to take decisions.

Authority delegated to a subordinate can be taken back under Delegation.
Under the process of delegation, a superior transfers some of their authority to a subordinate to perform specific tasks or make decisions on their behalf. However, there may be situations where the superior needs to take back the delegated authority. This can be done through the following means:
1. Revocation: The superior has the power to revoke or withdraw the delegated authority from the subordinate. This means that the authority originally given to the subordinate is taken back, and the superior resumes full control and decision-making power.
2. Modification: Instead of completely revoking the delegated authority, the superior may choose to modify or change the scope of the authority given to the subordinate. This could involve adjusting the limits, boundaries, or responsibilities associated with the delegated authority.
3. Supervision: The superior may decide to closely monitor and supervise the activities of the subordinate, even after delegating authority. This allows the superior to maintain control and intervene if necessary, without completely revoking the delegated authority.
4. Reassignment: In some cases, the superior may choose to reassign the delegated authority to another subordinate or take it back entirely. This could be due to changes in circumstances, organizational restructuring, or the need for a different set of skills or expertise.
It is important for the superior to have the ability to take back delegated authority when necessary to ensure effective management, control, and accountability within the organization.

Decentralization will lead to hand over the powers to the subordinate.This will give them to make their most participation in the organisation by contributing their performance of given works.

In the process of delegation, the managers are allowed to share their responsibilities and work with the subordinates which help the managers to reduce their work load. With the process of delegation, the managers can pass all their routine work to the subordinates and concentrate on important work. Without delegation, managers will be overburdened with the work.