Class 12 Business Study Chapter 5 Organising

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Class 12 Business Study Chapter 5 Organising

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Organising

Chapter: 5

PART – A

VERY SHORT TYPE QUESTIONS ANSWERS (1 MARK EACH)

1. Under which organisation grouping of activities is done on the basis of functions ?

Ans: Functional organisation.

2. It can be delegated to the subordinates. What is it ? 

Ans: Authority.

3. In which structure of organisation there is scope for spread of rumours ? 

Ans: Informal organisation.

4. For effective delegation, responsibility must be accompanied by what ? 

Ans: Commensurate authority.

5. A company is manufacturing cosmetics readymade garments, toilet shop and biscuits. What kind of organisation structure is suitable for this company ?

Ans: Divisional structure.

6. If responsibility of a person is more than authority, what would be its impact on his working ?

Ans: It would be difficult to perform the duties assigned.

7. Name the type of organisation in which friendly relationship exist among the members. 

Ans: Informal organisation.

8. Whose scope is greater, decentralisation or delegation of authority ?

Ans: Decentralisation of authority.

9. Which term denotes ‘the number of subordinates that can be effectively managed by a superior ? 

Ans: Span of control.

10. Authority can be delegated, but what cannot be delegated ? 

Ans: Responsibility

11. A subordinate receives orders from whom ?

Ans: Superior. 

12. Authority flows downward from whom to whom ? 

Ans:Superior to subordinate.

13. Name the organisation which is based on rules procedures.

Ans: Formal organisation.

14. Effective management’ is possible through delegation of authority’. Why ? 

Ans: Delegation lightens the burden of the top executives. It enables them to assign the routine activities to the subordinates and Concentrate on the vital functions. Thus, a manager can increase effectiveness by using the skills of subordinates.

15. What does the term pan of management refer to ?

Ans: Span of management refer to the number of subordinates a manager can supervise, manage or control effectively and efficiently.

16. Name the type of organisation in which friendly relationship exist among the members. 

Ans: Informal organisation.

17. Whose scope is greater ―  decentralisation or delegation of authority ? 

Ans: Decentralisation.

18. What is the basis of functional organisation ? 

Ans: Based on functions like production, finance, marketing etc.

B. SHORT TYPE QUESTIONS ANSWERS TYPE-1(2/3 MARKS EACH)

19. Explain by giving any three reasons why organising is considered as an important function of management. 

Ans: Same as Q.No 36.

20. Differentiate between delegation of authority and decentralisation on the basis of –

(i) Freedom of Action.

(ii) Nature and.

(iii) Purpose.

Ans: Same as Q.No 38..

21. What is an organisation ?

Ans: Organisation is a systematic combination of people, functions and physical facilities. The main task of organisation is to bring people and physical resources together in an orderly manner and arrange them in a proper manner to accomplish planned objectives.

According to William Spriegal, “In its broader sense, organisation refers to the relationship between various factor present in a given enterprise.”

22. What do you mean by organisation structure ? 

Ans: An organisation structure is a framework of authority ar responsibility relationships between various positions in the organisation and also clarifies who reports to whom. It is generally shown on an organisation chart. It is a set of planned relationships between groups of related functions and between physical factors and personnel required for the achievement of organisational goal.

23. What is formal organisation ? 

Ans: Formal organisation is the basis of relationship created by th management for achieving the organisational goals. Formal organisation clearly defines the authority responsibility relationship among the various people working in an enterprise. This structure is created after a lot of discussions and is based on division of activities so that human groups working in the organisation is abl to achieve the business goals, under this system people working in the organisation know their relationship among one another.

24. What is an informal organisation ? 

Ans: Informal organisation refers to the relationship between people i an organisation based not on planned structure for taking up the activity. It is generally based on personal attitudes, prejudices like and so on. People works here not on the basis of procedures and regulations but on some taste, culture etc. Informal organisation not created but they appear at their own in a natural way in the formal organisation.

25. What is decentralisation of authority ?

Ans: Decentralisation of authority means the dispersal of decision making power at lower levels of management. The aim of decentralisation is to grant all the authority to make a particular division of department autonomous. It enables each department to decide of all matters concerning the department expect those matters which need to be left to the top management.

In the words of Louis Allen, “Decentralisation refers to the systematic efforts to delegate to the lowest levels of authority except that which can only be exercised at the central point.”

26. Define and explain organisation as a process. 

Ans: Organisation as a process because organisation is concerned with arranging in a logical and orderly manner the activities of all the employees. It specifies how the duties are to be divided among the departments and the employees. It creates relationship of one job to another and lays down the scope or limits of authority and responsibility of each job. It also provides for achieving coordination between the activities of various individuals, and department.

Organising involves the following steps: 

(i) Identifying and division of work.

(ii) Creation of departmentation

(iii) Assignment of duties.

(iv) Establishing authority-Responsibility relationships.

27. Explain organisation as a structure. 

Ans: An organisation structure is a framework of authority and responsibility relationships between various positions in the organisation and also clarifies who reports to whom. It is generally shown an organisation chart. It is a set of planned relationships between groups of related functions and between physical factors and personnel required for the achievement of organisational goals.

28. Define organisation as a group activity.

Ans: Organisation is a process of identifying and grouping the activities of the enterprise. The total work of the organisation is grouped i major functional activities and each such functional activity is furt sub-divided into different jobs. Grouping of activities is essen because entire work cannot be done by one individual. Each jo consist of certain related tasks to be carried out by the job holder Grouping of activities is carried out to do all work systematically and to facilitate specialisation in the organisation. This would als increase the efficiency of the firm.

29. What is centralisation of authority ?

Ans: Centralisation refers to the systematic reservation of authority a the top level in the organisation. It refers to concentration of decision making authority. In centralised organisation top management has the absolute authority for making almost all the decision. It is generally successful in small-scale enterprises where proprietor is able to devote proper time for every activity. With the expansion of business the control becomes difficult and the need for decentralisation arises.

30. Write three characteristics of an organisation ? 

Ans: Three characteristics of an organisation are given below:

(i) Group of persons: Every business requires the services of people. When two or more persons come together for undertaking a common work then the organisation comes into existence. So an organisation exists with a number of persons.

(ii) Common objectives: There are common objectives to be achieved in an organisation. The working in a common direction is the essence of an organisation.

(iii) Division of work: The total work of the enterprise is divided into activities and functions. Various activities are assigned to different persons for their efficient accomplishment. When one person performs the same work repeatedly he develop specialisation in it and his efficiency improves

31. State any three benefits of formal organisation.

Ans: The three benefits of formal organisation are given below :

(i) Formal organisation helps in determining the objectives of various departments and units. It facilitates the attainment of organisational goals through the fulfilment of objectives of various department.

(ii) It facilitates optimum use of resources and new technological developments.

(iii) It clarifies authority and responsibility relationships which lead to better communication.

32. Explain any three merits of functional organisation.

Ans: The three advantages / merits of functional organisation are explained below:

(i) Increase in efficiency: There is division of labour upto manager level. Planning and execution are also separated. This helps in the increase of overall efficiency of the organisation. 

(ii) Scope of growth: The functional organisation wide variety or scope for growth and mass production. 

(iii) Specialisation: Functional organisation has the benefit of having specialists in each area of the enterprise. The work is performed by those who have specialised knowledge of that work.

33. Explain any three limitations of functional organisation.

Ans: The three limitations/disadvantages of functional organisation are discussed below:

(i) Conflict in authority: The principle of ‘Unity of Command’ is violated in functional organisation. A subordinate is answerable to many bosses. A worker is given works by many superiors. 

(ii) Lack of coordination: As a large number of specialists are appointed, it creates problems of coordination, specially when the advice of more than one is needed for taking decision. 

(iii) Delay in taking decision: Decision taking process delayed as more than one specialist are appointed. Much time it taken is consulting different specialists before the decision is taken.

34. Write three difference between authority and responsibility. 

Ans: The distinction between authority and responsibility are given below:

C. SHORT TYPE QUESTIONS ANSWERS TYPE- II (4 MARKS EACH)

35. Write four differences between formal and informal organisation. 

Ans: The four differences between formal and informal organisation are given below:

36. Briefly explain the importance of organising in modern business undertaking. 

Ans: The importance of organisation in modern business undertakings are described below:

(i) Helps in optimum utilisation of technology: The optimum foundation for effective managerial control. Various managerial functions like coordination, control will be effectively performed with the help of organisation.

(ii) Effective Management: Organisation is a tool of effective management. It helps the manager in developing jobs and departments, assignment of jobs to individuals and creation of structure etc. Organisation also provides the framework for the performance of other managerial functions.

(iii) Easy coordination: Every enterprise is divided into number of departments and sections. These are assigned different duties for achieving business objectives. This will bring on automatic co ordination in the business.

(iv) Role clarity: Organisation leads to creation of jobs and their assignment to competent people. All the managerial and operative jobs are clearly defined and differentiated. This helps each job holder to know what roles he has to play to discharge his job duties.

37. Explain four barriers to effective delegation.

Ans: There may arise certain difficulties in the process of delegation. The difficulties or barriers may be due to several reasons. Some of the barriers to effective delegation are given below: 

(i) Over confidence of superior: When a manager is of the opinion. that his subordinates will not be able to make proper decisions then he will concentrate all powers with him and will not like to delegate his authority. This may not be due to the incompetence of subordinates but due to the over confidence of a superior.

(ii) Lack of confidence in subordinate: The superior may be of the view that subordinates are not competent to carry out certain thing of their own. He may lack confidence in his subordinates. Under these circumstances superior will hesitate to delegate authority.

(iii) Lack of ability in superior: A superior may lack the ability to delegate to subordinates. The manager may not be able to identify the areas where delegation is required. The lack of competence of the part of superior restricts the delegation of authority. 

(iv) Lack of proper temperament of superior: The chief executive may be over cautions or conservative by nature. He will not like to take the risk of delegating authority. His fear will always be that something may not go wrong. The executives with this type of temperament will hesitate to delegate authority.

38. Give four points of difference between delegation and decentralisation. 

Ans: The differences between delegation and decentralisation are given below:

39. Explain any four points of importance of delegation of authority.

Ans: The following are the importance of delegation of authority 

(i) Relieving top executives: Top executives cannot perform and supervise each and every work. Delegation helps executives in delegating their work to subordinate officers.

(ii) Improved Functioning: In the absence of delegation some persons may be burdened with more tasks other may not have sufficient work to do. Delegation helps in rationalising the functioning of an organisation. So, that nobody is unduly burdened and no work is left unattended.

(iii) Use of specialists: Delegation enables the use of specialists for taking up different functions. A production manager will be assigned the task of production, a sales manager will look after sales department and so on. The use of specialists for different functions will improve the quality of work.

(iv) Helps in employee development: When subordinates are given independent assignment then they will be able to use their initiative and experience. This will also give them confidence in taking up further responsibilities. Without delegation, subordinates will not get a chance to try their knowledge.

40. Distinguish between functional structure and divisional structure on the basis of:

(i) Formation

(ii) Management Development

(iii) Responsibility

(iv) Suitability

Ans: Distinction between functional structure and divisional structure are given below:

41. “Authority can be delegated but responsibility can’t. Explain the statement. 

Ans: Delegation is an administrative process of getting things done b others by giving them responsibility. Authority is the power to give orders and make sure that the orders are obeyed. In a business enterprise, authority vests in top management and from there i trickles down to lower levels of management for accomplishing the assigned task. Responsibility on the other hand flows from lowe to top level. A person can delegate authority to his subordinate for performing a particular task but her remains accountable to hi superiors for that work. In case the work is not performed as pe the requirements, the delegator cannot escape responsibility. So authority can be delegated but not the responsibility.

42. “The concept of decentralisation is related to the concept of delegation.” Explain the statement in brief.

Ans: To some extent decentralisation is related to delegation because both decentralisation and delegation means dispersal of authority to take decisions to the lower levels of the organisation where the problem arise. Both purpose is to lesson the burden and to give greater autonomy to the superior or the lower levels. With the help of decentralisation and delegation quick decision are taken at the level where problems are faced. This speeds up the process of decision-making and also reduce the workload of higher level executive, since authority is delegated to the lower levels, the top. management is relieved of taking operational decisions. Again one of the important relation between decentralisation and delegation is that both motivates the subordinate.

43. Explain two advantages and two limitations of functional structure.

Ans: The two advantages of functional organisation are explained below:

(i) Increase in efficiency: There is division of labour upto manager level. Planning and execution are also separated. This helps in the increase of overall efficiency of the organisation. 

(ii) Scope of growth: The functional organisation wide variety or scope for growth and mass production.

The two limitations of functional organisation are discussed below:

(i) Conflict in authority: The principle of ‘Unity of Command’ is violated in functional organisation. A subordinate is answerable to many bosses. A worker is given works by many superiors. 

(ii) Lack of coordination: As a large number of specialists are appointed, it creates problems of coordination, specially when the advice of more than one is needed for taking decision.

44. Explain the meaning and features of divisional structure. 

Ans: In a divisional structure, the organisational structure comprises of separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit. Generally manpower souped on the basis of different products manufactured cach division is multifunctional because within each division function like production, marketing, finance etc. are performed together to achieve a common goal.

Some of the features of divisional structure are give below: 

(i) Under divisional structure the enterprise is divided into two or fore divisions depending upon the number of products produced.

(ii) Divisional structure is suitable for geographically diversified enterprises.

(iii) Divisional structure is costly, since every activity has to be undertaken separately.

(iv) In a divisional structure, each division is semi-autonomous and has its own resources and facilities.

D. LONG TYPE QUESTIONS ANSWERS TYPE – I (5 MARKS EACH)

45. Explain the process involved in organising. 

Ans: The steps involved in the process of organisation are:

(i) Division of work: The total activities or work of the organisation is divided into major functional activities and each such functional activity is further subdivided into different jobs. Division of work is essential because entire work can’t be done by one individual.

(ii) Creation of departments: Various jobs created at the first stage are classified into specified categories like production, purchasing, marketing etc. Based on this classification, all related jobs are clubbed together to create department. This grouping process is called departmentation. 

(iii) Assigning Duties: After classifying and grouping of organisational activities into various jobs, they are assigned to different employees according to their competence.

(iv) Establishing authority responsibility relationships: There should be clear definition of authority and responsibility associated with each job. Every person should know whom he has to take orders from and to whom he is accountable. 

(v) Coordination of activities: The efforts of every employees must be coordinated effectivery of the enterprise. to achieve the common objectives of the enterprise.

46. Discuss the functional and divisional structure of organisation.

Ans: In functional structure, activities are grouped and departments are created on the basis of specified functions to be performed. Activities related to a function are grouped in a single unit with a view to give a well defined direction to the whole group.

Some advantages of functional organisation are given below:

(i) Increase in efficiency: There is division of labour upto manager level. Planning and execution are also separated. This helps in the increase of overall efficiency of the organisation. 

(ii) Scope of growth: The functional organisation wide variety or scope for growth and mass production.

(iii) Specialisation: Functional organisation has the benefit of having specialists in each area of the enterprise. The work is performed by those who have specialised knowledge of that work.

Some limitations of functional organisation are:

(i) Conflict in authority: The principle of “Unity of Command” is violated in functional organisation. A subordinate is answerable to many bosses. A worker is given works by many superiors. 

(ii) Lack of coordination: As a large number of specialists are appointed, it creates problems of coordination, specially when the advice of more than one is needed for taking decision. 

(iii) Delay in taking decision: Decision taking process is delayed as more than one specialist are appointed. Much time it taken is consulting different specialists before the decision is taken. Divisional structure is formed by creating a set of autonomous units or divisions which are coordinated by the central headquarters. Each unit has a divisional manager responsible for performance and who has authority over the unit. Generally manpower is grouped on the basis of different products manufactured. 

Some of the advantages of divisional organisation are given below:

(i) Product specialisation helps in the development of varied skills in divisional head and thus prepares him for higher positions.

(ii) It is easier to organise departments based on functions and subfunctions.

(iii) I helps in training of specialist managers rather then generalis managers.

Some of the disadvantages of divisional organisation are giver below:

(i) Each department concentrates on a narrow range of activities relating to its function only.

(ii) It may be difficult to achieve coordination between different departments because of their different orientations.

(iii) There may be lack of understanding between different departments. The atmosphere of mistrust may lead to interdepartmental conflict

47. What are the steps or elements in the process of delegation 

Ans: The following elements are involved in delegation : 

(i) Determining the result expected: The first step in delegation process is the determination of results expected from a position o subordinate Assignment of task will be meaningful only when the subordinate clearly understands the results that he has to achieve.

(ii) Assignment of duty: People in the organisation are assigned jobs and duties. It means that superior asks to subordinate to perform a particular work within a given period of time. Duties can b described in terms of functions or in terms of goals and results.

(iii) Grant of authority: In order to enable the subordinate to discharge their duties effectively, he must be granted proper authority. The subordinate can only perform the work when he has authority required for accomplishing task. 

(iv) Creation of accountability: Accountability is the obligation carry out responsibility and exercise authority in terms d performance standard established. It means holding an individua answerable for final results. The subordinates is held accountable to the superior.

48. Explain the principles of effective delegation. 

Ans: The following are the principles of delegation:

(i) Principle of unity of command: This principle states that a subordinate should report only to a single superior. This will give a sense of personal responsibility. An obligation is essentially personal and authority delegation by more than one person to an individual is likely to result in conflicts in both authority and responsibility.

(ii) Principle of delegation by results expected: The delegation of authority should be based on the basis of results expected. The authority should be sufficient to achieve the desired results. If the authority is insufficient then only actions will not be achieved. 

(iii) Principle of absoluteness of responsibility: The responsibility of a subordinate once he has accepted the work, is absolute to his superior. The responsibility of the superior does not decrease once he has delegated authority.

(iv) Principle of parity of authority-responsibility: The subordinate should not be burdened with high performance responsibility with delegating enough authority. Sometimes authority is delegated but the concerned person is not made accountable for its proper use. The parity between authority and responsibility will be essential for achieving efficiency.

(v) Principle of functional definition: The related or similar activities should be grouped together according to enterprise function. When the definition of a position is clear then delegation of authority becomes simple.

(vi) The scalar principle: The scalar principle refers to the chain of direct authority relationships from superior to subordinate throughout the organisation. The more clear the line of authority from top manager to every subordinate the more effective will be responsible decision-making.

49. Distinguish between centralisation and decentralisation of authority.

Ans: Following are the distinguish between centralization and decentralisation:

(i) Centralisation means that the authority for most decisions are concentrated at the top of the managerial hierarchy. But decentralisation requires such authority to be dispersed by extension and delegation through are levels of management. 

(ii) Centralisation is possible only in case of small organisation. On the other hand decentralisation is essential in large big organisation. 

(iii) Under centralisation, middle and lower level managers are not emp vered, so in these level decision can be taken. But under decentralisation system, middle and lower level managers can taken necessary decision.

(iv) Under centralisation system, almost control power is reserved by the top management. But in case of decentralization system necessary powers and authorities are granted to the middle and lower level managers.

(v) Under centralisation, creativity and innovative power among middle and lower level managers are not emerged. But the decentralisation system can increase the creativity and innovation power among the middle and lower level managers.

50. What are the barriers to effective delegation ? 

Ans: The following are the barriers to effective delegation are:

(i) Over confidence of superior: When a manager is of the opinion that his subordinates will not be able to make proper decisions then he will concentrate all powers with him and will not like to delegate his authority. This may not be due to the incompetence of subordinates but due to the over confidence of a superior. 

(ii) Lack of confidence in subordinate: The superior may be of the view that subordinates are not competent to carry out certain things their own. He may lack confidence in his subordinates. Under these circumstances superior will hesitate to delegate authority.

(iii) Lack of ability in superior: A superior may lack the ability to delegate to subordinates. The manager may not be able to identify the areas where delegation is required. The lack of competence on the part of superior restricts the delegation of authority. 

(iv) Lack of proper temperament of superior: The chief executive may be over cautions or conservative by nature. He will not like to take the risk of delegating authority. His fear will always be that something may not go wrong. The executives with this type of temperament will hesitate to delegate authority.

(v) Lack of proper control: When certain controls like budgets, standard costs etc, are there then managers can exercise adequate control over the performance of his subordinates. In the absence of such techniques he will not be able to judge the performance of his subordinates. 

(vi) Inability of subordinate: The fear of committing mistakes or lack of confidence on the part of subordinates may also acts as a barrier in their knowledge.

51. What are the measures for effective delegation of authority ? 

Ans: A number of measures are required to make delegation effective:

(i) Defining of assignments: The work of every person should be properly defined. The results expected from them should be made clear. They should be given sufficient authority to accomplish the given results.

(ii) Proper selection of persons: The persons should be selected in the light of the job to be done. The delegation will be influenced by the qualifications of persons. So, the personnel manager should keep these things in mind while selecting persons for various positions.

(iii) Proper communication: There should be open line of communication. There should be free flow of information between superior and subordinate. Communication is essential for making delegation effective.

(iv) Establishing proper controls: The manager cannot relinquish responsibility, delegation should be accompanied by adequate controls. The performance of subordinates should be regularly assessed to see that things are going as per plans. 

(v) Rewards for proper implementation: There should be rewards for effective delegation and successful assumption of authority. This will encourage more and more persons to improve performance.

E. LONG TYPE QUESTIONS ANSWERS TYPE II (6/8 MARKS EACH)

52. Explain the terms authority’, ‘responsibility and ‘accountability”. 

Ans: Authority: Authority has been defined as the right to command. It is the power to give orders and make sure that the orders are obeyed. Authority also refers to a degree to discretion granted by a manager to his subordinates to accomplish task. Features of authority:

(i) Authority is the right to command and control subordinates.

(ii) It is granted to achieve organisational goals.

(iii) It is exercised through persuasion and sanctions.

(iv) It ensures the compliance of orders and instructions.

(v) It is delegated downward.

(vi) It is a command binding different individuals.

Responsibility: Responsibility is the obligation of an individual to perform certain activities which are assigned to him. When a subordinate is assigned a task then it is his duty to perform it to the accepts, it cannot be delegated to a subordinate even if the work best of his ability. Responsibility is an obligation that a person is performed by him. 

Features of responsibility :

(i) Responsibility is the result of duty assigned.

(ii) It flows upward, from juniors to seniors. 

(iii) Responsibility assigns an obligation to complete the task as per instructions.

(iv) It is assigned to human beings only. 

(v) It cannot be delegated further.

(vi) Responsibility and authority go side by side.

Accountability: Accountability is the obligation of a subordinate to complete the task entrusted to him. Accountability creates the obligation for the maintenance of responsibility by the superior and an accompanying instance that the work performed must meet his expectations. The subordinates are accountable to the superior for the satisfactory performance of work. 

Features of Accountability :

(i) Accountability is the obligation to carry out responsibility. 

(ii) The extent of accountability depends upon the extent of authority and responsibility.

(iii) It always moves upwards.

(iv) It cannot be delegated It is unitary.

(vi) It is a derivative of responsibility.

53. “Efficient organisation is the basis of successful management.” Discuss the importance of organisation in the light of this statement. 

Ans: “Efficient organisation is the basis of successful management. So, the importance of organisation in the light of this statement are given below:

(i) Specialisation: Organisation is based on division of work which leads to specialisation. People are appointed on the jobs on the basis of their area of specialisation. This would lead to efficiency in performance and better quality.

(ii) Adaption to change: Sound organisation structure is flexible and gives adequate scope for the introduction of new technology. It helps in introducing changes in the enterprise by modifying the jobs and authority and responsibility relationships.

(iii) Helps in optimum utilisation of technology: The optimum foundation for effective managerial control. Various managerial functions like coordination, control will be effectively performed with the help of organisation.

(iv) Effective Management: Organisation is a tool of effective management. It helps the manager in developing jobs and departments, assignment of jobs to individuals and creation of, structure etc. Organisation also provides the framework for the performance of other managerial functions.

(v) Easy coordination: Every enterprise is divided into number of departments and sections. These are assigned different duties for achieving business objectives. This will bring on automatic co ordination in the business.

(vi) Role clarity: Organisation leads to creation of jobs and their assignment to competent people. All the managerial and operative jobs are clearly defined and differentiated. This helps each job holder to know what roles he has to play to discharge his job duties.

54. Explain in brief any six points which highlight the importance of decentralisation in an organisation. 

Ans: The importance of decentralisation would be clear by examining its advantages to an organisation:

The advantages of decentralisation are as follows:

(i) Reduction of workload of higher level executives: Since authority is delegated to the lower levels, the top management is relieved of taking operational decision. It needs to concentrate on corporate planning and control and coordination of the activities of different departments.

(ii) Quick decision-making: In decentralisation, decisions are taken at the level where problems are faced. This speeds up the process of decision making.

(iii) Motivation of personnel: Decentralisation is a means of empowerment of the lower levels. The employees at the lower level who have power to take decisions enjoy psychological satisfaction and feel motivated. 

(iv) Growth and diversification: Decentralisation facilities diversification of business activities. The business firm can create new departments or divisions to handle new products and services. 

(v) Initiative and creativity: When employees are given greater degree of authority or authority, they get an opportunity to take initiative. They come out with innovative ideas for the benefit of the organisation.

(vi) Better coordination: The top management can give sufficient attention to the coordination of the activities of different divisions. Coordination within each division is the responsibility of the respective divisional managers who are granted sufficient autonomy.

55. What are the main components of delegation of authority ? Discuss how can you make delegation more effective ? 

Ans: The following elements are involved in delegation :

(i) Determining the result expected: The first step in delegation process is the determination of results expected from a position or subordinate. Assignment of task will be meaningful only when the subordinate clearly understands the results that he has to achieve. 

(ii) Assignment of duty: People in the organisation are assigned jobs and duties. It means that superior asks to subordinate to perform a particular work within a given period of time. Duties can be described in terms of functions or in terms of goals and results. 

(iii) Grant of authority: In order to enable the subordinate to discharge their duties effectively, he must be granted proper authority. The subordinate can only perform the work when he has authority required for accomplishing task. 

A number of measures are required to make delegation effective.

(i) Defining of assignments: The work of every person should be properly defined. The results expected from them should be made clear. They should be given sufficient authority to accomplish the given results.

(ii) Proper selection of persons: The persons should be selected in the light of the job to be done. The delegation will be influenced by the qualifications of persons. So, the personnel manager should keep these things in mind while selecting persons for various positions.

(iii) Proper communication: There should be open lin communication. There should be free flow of information bet superior and subordinate. Communication is essential for ma delegation effective. 

(iv) Establishing proper controls: The manager cannot reline responsibility, delegation should be accompanied by adequate controls. The performance of subordinates should be regular assessed to see that things are going as per plans.

56. “Delegation of authority is necessary in all type organisation.” Explain reasons in support of your answer. 

Ans: Delegation of authority is necessary in all types of organise for the following reasons:

(i) Helps in expansion and diversification: Delegation helps diversification and growth of business activities. The business fine can create new department or divisions to handle new product and services. 

(ii) Relieving top executives: Top executives cannot perform and supervise each and every work. Delegation helps executives delegating their work to subordinate officers.

(iii) Improved Functioning: In the absence of delegation some persons may be burdened with more tasks while others may not have sufficient work to do. Delegation helps in rationalising the functioning of an organisation. So, that nobody is unduly burdened and no work is left unattended.

(vi) Helps in employee development: When subordinates are give independent assignment then they will be able to use their initiative and experience. This will also give them confidence in taking further responsibilities. Without delegation, subordinates will not get a chance to try their knowledge.

57. What is meant by ‘divisional structure of an organisation For which type of business enterprises is this structure: suitable? State any four advantages of this fors organisational structure.

Ans: Same as Q.No 44, & Same as Q.No 46.

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