CBSE Class 12 Case Studies In Business Studies - Organising

CBSE Class 12 Case Studies In Business Studies – Organising

ORGANISING
Organising: Definition
Organising is the process of defining and grouping the activities of the enterprise and establishing authority relationships among them for the realisation of the desired goals.

Hierarchy: Definition
Hierarchy is the ranking of job positions on the basis of relative roles and responsibilities.

Types of Organisation

Formal organisation refers to the organisation structure which is designed by the management to accomplish a particular task.
Informal organisation emerges from within the formal organisation when people interact beyond their officially defined roles.

Steps Involved in the Process of Organizing

Identification and division of work is done in accordance with predetermined plans to avoid duplication of activities and ensure that the burden of work is being shared among the employees.
Departmentalisation involves grouping of similar activities into departments, units, sections etc. using several criteria as a basis to facilitate specialization.
Assignment of duties is done to the members as per their job positions. Once departments have been created, each of them is placed under the charge of an individual.
Establishing reporting relationships While assigning jobs, each member is told that from whom he/she has to take orders and to whom he/she will be accountable. The establishment of such clear reporting relationships help to create a well defined hierarchial structure.

Importance of Organising

Organising offers benefits of specialisation as it leads to a systematic allocation of jobs amongst the workforce as the specific employees are assigned specific job on a regular basis.
It brings clarity in working relationships by establishing a hierarchical order thereby enabling the fixation of responsibility and specification of the extent of authority to be exercised by an individual.
It leads to optimum utilisation of resources through proper allocation of jobs, and minimising the wastage of resources and efforts.
It facilitates adaptation to change and helps to create a stable organisation by incorporating changes in the organisation structure as per the needs of the changing environment.
It leads to effective administration by providing a clear description of jobs and related duties which helps to avoid confusion and duplication.
It fosters development of personnel as delegation helps to build the ability of the subordinate to deal effectively with challenges and helps them to realise their full potential.
It leads to expansion and growth of an enterprise by enabling it to deviate from existing norms and taking up new challenges.

ORGANISATIONAL STRUCTURE
Organisational Structure: Definition
The organisational structure can be defined as the framework within which managerial and operating tasks are performed.

Types of Organisational Structures

Functional Structure
Divisional Structure

Features of Functional Structure

A functional structure is an organisational design that groups similar or related jobs together on the basis of functions like production, finance etc.
Each department hasa functional manager responsible for performance and who has authority over the department.
All departments are under the charge of a coordinating head.
These departments may be further divided into sections.

Features of Divisional Structure

A divisional structure is an organisational design that groups similar or related jobs together on the basis of functions. Different products manufactured in the organisation. Structure comprise of separate business units or divisions.
Each department hasa divisional manager responsible for the profit or loss of his division.
Each division is multi-functional because within each division functions like production, marketing, finance, purchase etc., are performed together to achieve a common goal.

Advantages of Functional Structure

A functional structure emphasises on specific functions and ensures that different functions get due attention.
Due to the similarity in the tasks being performed, it promotes control and coordination within a department.
It results in increased profit with the improvement in managerial and operational efficiency.
By focusing only on a limited range of skills, it facilitates the training of employees.
It leads to minimal duplication of effort and leads to economies of scale thereby reducing cost.

Advantages of Divisional Structure

Product specialisation helps a divisional manager to gain experience in all functions related to a particular product and this prepares him for higher positions.
It providesa proper basis for performance measurement and also helps in fixation of responsibility in cases of poor performance of the division as revenues and costs related to different departments can be easily identified.
It leads to faster decision making, promotes flexibility and initiative because each division functions as an autonomous unit.
It facilitates expansion and growth as new divisions can be added just by adding another divisional head and staff for the new product line without interrupting the existing operations

Disadvantages of Functional Structure

It gives less emphasis to overall enterprise objectives than the objectives pursued by a functional head.
It may lead to problems in coordination.
It may lead to conflict of interests if two or more departments are not compatible.
It may lead to inflexibility as the functional heads do not get training and experience in diverse areas.

Disadvantages of Divisional Structure

There may be conflicts among the different division heads, as in pursuit of higher profits, each of them may seek maximum allocation of resources at the cost of other divisions.
The cost is high as each division is provided with separate set of similar functions.
It provides the managers with the authority to supervise all activities related to a particular division. In course of time, such a manager may gain power and in a bid to assert his independence may ignore organisational interests.

S.No.	Basis	Functional Structure	Divisional Structure
1.	Formation	It is based on functions.	It is based on product lines and is supported by functions.
2.	Responsibility	It is difficult to fix on a department.	It is easy to fix responsibility for performance.
3.	Specialisation	Functional specialisation	Product specialisation.
4.	Managerial Development	It is difficult, as each functional manager has to report to the top management.	It is easier, autonomy as well as the chance to perform multiple functions helps in managerial development.
5.	Cost	It is economical as the functions are not duplicated.	It is costly as there is duplication of resources in various departments.
6.	Coordination	It is difficult for a multiproduct company.	It is easy, because all functions related to a particular product are integrated in one.
7.	Suitability	It is most suitable when the size of the organisation is large, has diversified activities and operations require a high degree of specialisation.	It is suitable for those business enterprises where a large variety of products are manufactured using different productive resources.

FORMAL ORGANISATION
Features of Formal Organisation

It specifies the reporting relationships among various job positions.
It is a means to achieve the organisational objectives.
It seeks to coordinate the efforts of various departments.
It is deliberately created by the top management to facilitate smooth functioning of the organisation.
It places more emphasis on work to be performed rather than interpersonal relationships
among the employees.

Advantages of Formal Organisation

It is easier to fix responsibility since reporting relationships are clearly specified.
The role and duties of each employee are clearly defined.
Unity of command is maintained through an ^ established chain of command.
It leads to effective accomplishment of goals by providinga framework for the efficient operations.
It provides stability to the organisation as the behaviour of the employees is guided by rules and regulations of the organisation.

Limitations of Formal Organisation

It may lead to procedural delays as all communication has to take place through scalar chain only.
It restricts the creativity and ^ recognisation of employees as it does not allow any deviations from rigidly laid down polices.
It does not provide a complete picture of how an organisation works as it is difficult to understand all human relationships in a formal structure.

INFORMAL ORGANISATION
Features of Informal Organisation

It originates from within the formal organisation as a result of personal interaction among employees.
Instead of the official rules and regulations, the standards of behaviour evolve from group norms.
The group members create independent channels of communication without specified direction of flow of information.
It emerges spontaneously and is not deliberately created by the management.
It isa complex network of social relationships among members and has no definite structure.

Advantages of Informal Organisation

It leads to faster spread of information as well as facilitates quick feedback.
It helps to fulfill the social needs of the members by giving them a sense of belongingness in the organisation and enhances their job satisfaction.
It contributes towards the fulfillment of organisational objectives by compensating for inadequacies in the formal organisation

Disadvantages of Informal Organisation

It may work against the interest of the formal organisations it leads to spreading of rumours.
Sometimes it may restrict growth of the organisation by strongly opposing to the proposed change.
As it create a peer pressure among the members to conform to group expectations, it can be harmful to the organisation.

S.No	Basis	Formal Organisation	Informal Organisation
1	Meaning	The structure of authority relationships created deliberated by the management to achieve its objectives.	It is a network of social relationships arising out of the interaction among employees within an organisation.
2	Origin	It arises as a result of company rules and policies.	It arises as a result of social interaction.
3	Authority	It arises by the virtue of position in the organisation.	It arises out of personal qualities of the members.
4	Behaviour	It is directed by rules of the organisation.	There is no set behaviour pattern for the members.
5	Flow of Communication	The communication takes place through the scalar chain.	The communication can take place in any direction as its flow does not follow a set pattern.
6	Nature	It is rigid.	It is flexible.
7	Leadership	Managers are leaders.	Leaders are chosen by the group so they may or not be the managers.

DELEGATION OF AUTHORITY
Delegation of Authority: Definition
Delegation of authority merely means the granting of authority to subordinates to

Elements Of Delegation

Authority
Responsibility
Accountability.

Importance of Delegation

It leads to effective management as by relieving the employees from doing routine work, it provides them with time to excel in new areas.
It promotes employee development as they are entrusted with more opportunities to utilise their talent, perform complex tasks and assume those responsibilities which are likely to improve their career prospects.
It helps to motivate employees as when a subordinate is entrusted with a task, it is not merely the sharing of work but involves trust on the superior’s part and commitment on the part of the subordinate.
It facilitates the growth of an organisation as it seeks to enrich the quality of manpower and widens the scope of using internal recruitment by providing them with training and experience through exposure to varied jobs.
It provides the basis of management hierarchy as it establishes superior-subordinate relationships, which are the basis of hierarchy of management
It facilitates better coordination amongst the departments, levels and functions of management by providing clarity in reporting relationships.

S.No.	Basis	Authority	Responsibility	Accountability
1	Meaning	Authority refers to the right of an individual to command his subordinates and to take action within the scope of his position.	Responsibility is the obligation of a subordinate to properly perform the assigned duty.	Accountability implies being answerable for the final outcome, onee authority has been delegated and responsibility accepted, one cannot deny accountability.
2	Delegation	Can be delegated.	Cannot be entirely delegated.	Cannot be delegated at all.
3	Origin	Arises from formal position in the organisation.	Arises from delegated authority.	Arises from responsibility.
4	Flow	Flows downward from superior to subordinate.	Flows upward from subordinate to superior.	Flows upward from subordinate to superior.

DECENTRALISATON
Decentralisation: Definition
Decentralisation refers to systematic dispersal of authority to the lowest level, except that which can be exercised at central points.

Caution in Implementing a Decentralisation Policy

Decentralisation must always be balanced with centralisation in areas of major policy decisions.
Complete centralisation would imply concentration of all decision making functions at the apex of the management hierarchy find would eliminate the need fora management hierarchy.
Complete decentralisation can lead to organisational disintegration as the departments may start operating on their own guidelines which may be contrary to the interest of the organisation.

Need for Decentralisation
As an organisation grows in size and complexity, the departmental or branch heads are directly and closely involved with certain operations and are likely to have more knowledge about them as compared to the top management which may be associated with individual operations only indirectly.

Importance of Decentralisation

It seeks to develop initiative in the subordinates by promoting self-reliance and confidence amongst them and also helps to identify those executives who have the necessary potential to become dynamic leaders.
It provides relief to top management as
the subordinates are allowed to operate independently within their area of jurisdiction. Consequently, the need for direct supervision is reduced.
It facilitates quick decision making as the employees are allowed to act independently within their are a of jurisdiction without consulting others.
It develops managerial talent for the
future by providing the employees with the necessary training and experience through exposure to varied challenging jobs and also facilitates identification of those employees who may and those who may not be successful in assuming greater responsibility.
It facilitates growth of the organisation by
increasing its productivity and profitability through assigning greater autonomy to the lower levels of management as well as divisional or departmental heads.
It facilitates better control by ensuring continuous evaluation of performance at each level and the contribution of each department so that they can be individually held accountable for their results.

S.No.	Basis	Delegation of authority	Decentralisation
1.	Nature	It is a compulsory act because no individual can perform all tasks on his own.	It is an optional policy decision and is only implemented at the discretion of the top management.
2.	Freedom of action	The subordinates have less freedom to take own decisions as there is more control is exercised by the superiors.	The control over executives is less hence they have a greater freedom of action.
3.	Status	It is a process followed to share tasks.	It is the result of the policy decision of the top management.
4.	Scope	It has narrow scope as it is limited to superior and his immediate subordinate.	It has wide scope as it implies extension of delegation to the lowest level of management.
5.	Purpose	To lessen the burden of the manager.	To increase the role of the subordinates in the organisation by giving them more autonomy.
6.	Withdrawal of authority	Easy, as only two persons are involved in the process.	Difficult, as it involves the extension of delegation to the lowest level of management.

MIND MAP
cbse-class-12-case-studies-in-business-studies-organising-1

LATEST CBSE QUESTIONS

Question 1.
Differentiate between ‘formal’ and ‘informal’ organisation on the basis of ‘origin’. (CBSE, Delhi 2017)
Answer:
Formal organisation arises as a result of companies rules and policies whereas informal organisation emerges spontaneously from within the formal organisation as a result of social interactions, amongst the employees.

Question 2.
Aman Chadha started ‘Bulls Eye’ a company for providing cyber security solutions to businesses. Its objective is to prevent, detect and respond to cyber attacks and protect critical data. He was a hardworking software engineer and an expert in cyber security. His reputation grew by leaps and bounds as he was not only a person of integrity but also did his work with utmost honesty and sincerity. The business started growing day by day.
He was delighted when he was offered a big project by the Ministry of Defence. While working on the project, he found that the volume of work made it impractical for him to handle all the work by himself. He decided to expand the team. The company maintained a close liaison with a local engineering college. During a campus placement, Ishan and Vrinda were appointed to work for the new project.
He found the new employees capable, enthusiastic and trustworthy. Aman Chadha was thus, able to focus on objectives and with the help of Ishan and Vrinda, the project was completed on time. Not only this Aman Chadha was also able to extend his area of operations. On the other hand Ishan and Vrinda also got opportunities to develop and exercise initiative.

Identify and briefly explain the concept used by Aman Chadha in the above case which helped him in focusing on objectives.
Also, state any four points of importance of the concept identified in (i) above. (CBSE, Delhi 2017)

Answer:

Delegation of authority is the concept used by Aman Chadha in the above case which helped him in focusing on objectives.
Delegation of authority is the process of granting of authority to the subordinates to operate within prescribed limits.
The four points of importance of delegation of authority are described below:
- Effective management: It helps the managers to function more efficiently as they get more time to concentrate on important matters. Freedom from doing routine work provides them with opportunities to excel in new areas.
- Employee development: By empowering the employees, they are given more opportunities to utilise their talent and this may help them to become better leaders and decision makers in future.
- Motivation of employees: Delegation also has psychological benefits as helps in building the self-esteem of an employee and improves his confidence and work performance. When a superior entrusts a subordinate with a task, it is not merely
  the sharing of work but involves trust on the superior’s part and commitment on the part of the subordinate. Thus, delegation may give rise to latent abilities in the subordinates.
- Facilitation of growth: With the increase in the competence of the employees, an organisation tends to gain in many ways. The growth and expansion of the firm becomes easy as the capable workforce is ready to take greater responsibilities.

Question 3.
Give the meaning of ‘supervision’ as an element of directing. (CBSE, OD 2017)
Answer:
Supervision is the process of overseeing the work of a subordinate by his superior.

Question 4.
Differentiate between ‘formal’ and ‘informal’ organisation on the basis of ‘flow of communication’. (CBSE, OD 2017)
Answer:
In a formal organization the communication takes place through the scalar chain whereas in an informal organization communication can take place in any direction there is no planned route.

Question 5.
What is meant by span of management? (CBSE, Sample Paper, 2017)
Answer:
Span of management refers to the number of subordinates that can be effectively managed by a superior. A narrow span of control would necessitate more number of levels in the organisation or vice versa.
cbse-class-12-case-studies-in-business-studies-organising-2

Question 6.
Ramdas, aged 49 is working in an aviation company. He is the senior most employee in his division. He is even senior to the division manager, Kanaputti. Ramdas is considered one of the most committed, capable and hard-working employees. As a result of his abilities and seniority, he generally received the work assignments of his choice. Although there was no formal designation of various „special’ projects assigned to Ramdas, he handled them as a matter of routine. A problem developed when an able and intelligent person Nagarjuna, aged 33, was appointed by Kanaputti. Nagarjun’s previous three years’ experience in the closely related work, made it possible for him to catch on to the routine work of his new job more rapidly than was customary for a new employee. On several occasions, Kanaputti noticed the tension developing between the two employees. However, he didn’t want to get involved in their personal issues as long as the work was completed effectively and efficiently by them. One day, the tension between them reached the boiling point and Ramdas complained to
Kanaputti stating that his duties were being largely taken over by Nagarjun. Kanaputti issued the order stating the clear allocation of the jobs and related duties between the two. He further clarified the working relationship between them by specifying who was to report to whom. This helped in reducing the workload, enhancing productivity and removing ambiguity. (CBSE, Sample Paper, 2017)

Identify and state the step of organizing process which has not been carried out properly and contributed to this problem.
State the two steps of the organizing process which have been taken by Kanaputti to respond to the complaint of Ramdas.
Also state two points of importance of organizing as reflected in the above case.

Answer:

The step of organizing process which has not been carried out properly and contributed to this problem is Assignment of duties.
Assignment of Duties: Once departments have been created each of them is placed under the charge of an individual and then jobs are allocated to the members as per their job positions.
The two steps of the organizing process which have been taken by Kanaputti to respond to the complaint of Ramdas are listed below:
- Assigning the duties
- Establishing reporting relationship.
The two points of importance of organizing as reflected in the above case are described below:
- Optimum utilization of resources: Organising ensures best possible use of all forms of resources i.e. physical, financial and human resource. It ensures systematic assignment of jobs thereby curbing overlapping of work and avoiding possibilities of duplication of work. This helps in preventing confusion and minimising the wastage of resources and efforts.
- Adaptation to change: The process of organising provides stability to the enterprise as it can then continue to survive and grow inspite of changes in the business environment. It enables the organisation structure to be suitably modified and the revision of inter-relationships amongst managerial levels to pave the way for a smooth transition.

Question 7.
“Shan Spices Ltd.” are the manufacturer of different food specific spices like Rajmaa Masala, Cholley Masala, Aaloo Parantha Masala etc. Mr. Raghav, the owner of the company has created different departments for purchase, production, marketing, finance and human resource. There are thirty employees working in the organisation. Planning is of paramount importance to the company as Mr. Raghav believes that effective planning leads to achievement of organisational objectives. So in order to make employees focus on objectives, he issued instructions that during working hours only official matters will be discussed. He made certain rules and code of conduct for the employees to follow, according to which employees are not allowed to visit and talk to the employees of other departments except for official work. He emphasised on work performance which resulted in smooth functioning of the organisation.

Identify and state the type of organisation mentioned in the above para.
State one feature of the concept identified in part (a) as mentioned in the above para.
What was the purpose behind the formulation of rules for the employees that restricted their personal communication with the employees of other departments?
State two values violated by Mr. Raghav. (CBSE, Sample Paper, 2017)

Answer:

Formal organisation is the type of organisation mentioned in the above paragraph. Formal organisation refers to the organisation structure which is deliberately created by the management to accomplish a particular task. It clearly defines the boundaries of authority and responsibility and facilitates systematic coordination among the various activities to achieve organisational goals.
One feature of formal organisation is that it clarifies who has to report to whom by specifying the relationships among various job positions and the nature of their interrelationship.
The purpose behind the formulation of rules for the employees that restricted their personal communication with the employees of other departments is to ensure discipline at workplace and avoid wastage of time. This is help to curb the emergence of informal organisation to a certain extend and increase work efficiency.
The two values violated by Mr. Raghav are :
- Liberty to employees
- Fulfilment of emotional needs

Question 8.
Steelo Ltd. decided to set-up its steel manufacturing factory in the backward area of Orissa where very less job opportunities were available. People of that area welcomed this effort of Steelo Ltd. To attract people to work in its factory, it also decided to provide many other facilities like a school, hospital, market, etc. in the factory premises.
Steelo Ltd. started earning huge profits. Another competing company asked its production manager Aslam to investigate the reasons of earning huge profits by Steelo Ltd.
Aslam found that in both the companies, there was systematic coordination among the various activities to achieve the organisational goals. Every employee knew who was responsible and accountable to whom. The only difference was that in his organisation, communication took place only through the scalar chain whereas Steelo Ltd. was allowing the flow of communication in all the directions as per the requirement which led to faster spread of information as well as quick feedback.

Identify the type of organisation which permits Steelo Ltd. the flow of communication in all the directions.
State another advantage of the type of organisation identified in part (1) above.
State any two values which Steelo Ltd. wanted to communicate to society.

OR
Mr Car Ltd. decided to set-up its new car manufacturing factory in the backward area of West Bengal where very less job opportunities were available. People of that area welcomed this effort of Mr Car Ltd. The company also decided to provide facilities like a school, hospital, market, etc. in the factory premises so that the people are attracted to join the factory as workers.
Mr Car Ltd. started earning huge profits. Another competing company asked its production manager Arvind to investigate the reasons of earning huge profits by My Car Ltd.
Arvind found that in both the companies, there was systematic coordination among the various activities to achieve the organisational goals. Every employee knew who was responsible and accountable to whom. The only difference was that in his organisation, communication took place only through the scalar chain whereas My Car Ltd. was allowing the flow of communication in all the directions as per the requirement which led to faster spread of information as well as quick feedback.

Identify the type of organisation which permits the flow of communication in all the directions in My Car Ltd.
Also state an advantage of the type of organisation identified in part (1) above.
State any two values which My Car Ltd. wants to communicate to the society. (CBSE, OD 2016)

Answer:

An informal organisation permits the flow of communication in all the directions in My Car Ltd.
Another advantage of informal organisation is that it helps to fulfill the social needs of the members by giving them a sense of belongingness in the organisation and enhances their job satisfaction.
The two values that My Car Ltd. wants to communicate to the society are:
- Trust
- Social Responsibility

Question 9.
Kiran Industries is a company dealing in office furniture. The company chose to diversify its operations to improve its growth potential and increase market share. As the project was important, many alternatives were generated for the purpose and were thoroughly discussed amongst the members of the organisation. After evaluating the various alternatives, Sukhvinder, the Managing Director of the company, decided that they should add ‘Home Interiors and Furnishings’ as a new line of business activity.

Name the framework, which the diversified organisation should adopt, to enable it to cope with the emerging complexity? Give one reason in support of your answer.
State any two limitations of this framework (CBSE, Sample Paper, 2015-16)

Answer:

Divisional structure should be adopted by the diversified organisation to enable it to cope with the emerging complexity.
Reason: It leads to faster decision making, promotes flexibility and initiative because each division functions as an autonomous unit.
The two limitations of divisional structure are as follows:
- There may be conflicts among the different divisions heads as in pursuit of higher profits, each of them may seek maximum allocation of resources at the cost of other divisions.
- The cost is high as each division is provided with separate set of similar functions.

Question 10.
Rajeev, the owner of Pathways Constructions, decided to start a campaign to create awareness among people for developing clean surroundings in their area. He formed a team of 10 members to list the different ways for cleaning the surroundings. One suggested to take the help of local residents, another suggested that they may involve school-going children in their venture. One more suggestion was to take the help of the unemployed youth. On evaluation of different ways, it was decided to take the help of local residents. To achieve the desired goal, various activities are identified like

Purchase of necessary items like dustbins, garbage bags, brooms, etc.;
Collection of garbage;
Disposal of garbage, etc.

After identification of different activities, the work was allocated to different members.

Identify the concepts of management involved in the above situation and quote the lines which help in their identification.
Also identify the values which the company wants to communicate to society. (CBSE, Sample Question Paper 2015

Answer:

The concepts of management involved in the above situation are outlined below:
- Planning: ” One suggested to take help of local residents, another suggested that they may involve school going children in their venture. One more suggestion was to take the help of the unemployed youth. On evaluation of different ways, it was decided to take help of the local residents.”
- Organising: ” To achieve the desired goal, various activities are identified like
  - Purchase of necessary items like dustbins, garbage bags, brooms etc.
  - Collection of garbage
  - Disposal of garbage, etc.
    After identification of different activities, the work was allocated to different members.”
The values which the company wants to communicate to society are:
- Cleanliness
- Responsibility

Question 11.
Samir Gupta started a telecommunications company, ‘Donira Ltd.’, to manufacture economical mobile phones for the Indian rural market with 15 employees. The company did very well in its initial years. As the product was good and marketed well, the demand of the products went up. To increase production, the company decided to recruit additional employees. Samir Gupta, who was earlier taking all the decisions for the company, had to selectively disperse the authority. He believed that subordinates are competent, capable and resourceful and can assume responsibility for the effective implementation of their decisions. This paid off and the company was not only able to increase its production but also expanded its product range.

Identify the concept used by Samir Gupta through which he was able to steer his company to greater heights.
Also explain any three points of importance of this concept. (CBSE, Delhi 2015)

OR
Neeraj Gupta started a company ‘Yo Yo Ltd.’ with ten employees to assemble economical computers for the Indian rural market. The company did very well in its initial years. As the product was good and marketed well, the demand went up. To increase production, the company decided to recruit additional employees. Neeraj Gupta, who was earlier taking all the decisions for the company, had to selectively disperse the authority. He believed that people are competent, capable and resourceful and can assume responsibility for the effective implementation of their decisions. This paid off and the company was not only able to increase its production but also expanded its product range with different features.

Identify the concept used by Neeraj Gupta through which he was able to steer his company to greater heights.
Also explain any three points of importance of this concept.

Answer:

The concept used by Sameer Gupta/ Neeraj Gupta through which he is able to steer his company to greater heights is Decentralisation.
The three advantages of using decentralisation are as follows:
- Decentralisation helps to promote self-reliance and confidence amongst the subordinates: When the subordinates are given freedom to take their own decisions they learn to depend on their own judgment and develop solutions for the various problems they encounter. Moreover, a decentralisation policy helps to identify those executives who have the necessary potential to become dynamic leaders.
- Relief to top management: Decentralisation reduces the need of direct supervision and helps to save the time of top management for persuing other important work.
- Quick decision-making: In a decentralised organisation, managers at all levels are allowed to take such decisions independently which lie within their area of jurisdiction. This makes the process of decision making much faster.

Question 12.
Alliance Ltd. is engaged in manufacturing plastic buckets. The objective of the company is to manufacture 100 buckets a day. To achieve this, the efforts of all departments are coordinated and interlinked and authority-responsibility relationship is established among various job positions. There is clarity on who is to report to whom. Name the function of management discussed above. (CBSE, 2015)
Answer:
Organising

Question 13.
National Vritech Ltd. has grown in size. It was a market leader but with changes in business environment and with the entry of MNCs, its market share is declining. To cope up with the situation, the CEO starts delegating some of his authority to the General Manager, who also felt himself overburdened and with the approval of CEO disperses some of his authority to various levels throughout the organisation. Identify the concept of management discussed above. (CBSE, Sample Paper 2014-15)
Answer:
Decentralisation

Question 14.
Sharda Ltd. is pursuing diversified activities which require a high degree of specialisation. Identify the type of structure that should be followed by Sharda Ltd. (CBSE, 2015)
Answer:
Functional structure

Question 15.
A company is manufacturing washing machines. There is a well-defined system of jobs with a clear and definite authority, responsibility and accountability in the company. But people are not allowed to interact beyond their officially defined roles. As a result, the company is not able to adapt to the changing business environment. The workforce is also not motivated due to lack of social interaction. The company is facing problems of procedural delays and inadequate recognition of creative talents.

Suggest how the organisation can overcome the problems faced by it.
Give any two benefits it will derive from your suggestions. (CBSE, Sample Paper, 2014-15)

Answer:

The organisation can overcome the problem faced by it by adopting informal organisation. Informal organisation emerges from within the formal organisation when people interact beyond their officially defined roles.
The two benefits of informal organisation are as follows:
- It helps to fulfill the social needs of the members by giving them a sense of belongingness in the organisation and enhances their job satisfaction .
- It contributes towards the fulfillment of organisational objectives by compensating for inadequacies in the formal organisation.

ADDITIONAL QUESTIONS

Question 1.
Ishita works as a corporate event coordinator in an event management company. She has been made an overall official incharge for organizing a painting exhibition for one of the clients of the company. For ensuring that the exhibition takes place successfully, she identifies the various activities involved and divides the whole work into various task groups like marketing committee, decoration committee and reception committee. In order to facilitate coordination within and among committees, she appoints a supervisor of each group. Each member in the group is asked to report to their respective supervisors and all the supervisors are expected to work as per Ishita’s orders.
In context of the above case:

Identify the function of management being performed by Ishita.
Describe briefly the various steps involved in the performance of the function of management as identified in part (1) of the question.

Answer:

The Organising function of management is being performed by Ishita.
The steps involved in the process of organizing are as follows:
- Identification and Division of Work: The first step in the process of organising relates to identification and division of the work that has to be performed in accordance with predetermined plans. This helps to avoid duplication of activities and makes the work manageable. It also ensures that the burden of work is being shared among the employees.
- Departmentalisation: The next step in the process involves grouping of similar activities into departments, units, sections etc. using several criteria as a basis. This facilitates specialization.
- Assignment of Duties: Once departments have been created each of them is placed under the charge of an individual and then jobs are allocated to the members as per their job positions.
- Establishing Reporting Relationship: While assigning jobs each member is told that from whom he /she has to take orders and to whom he/she will be accountable. The establishment of such clear reporting relationships help to create a well defined hierarchical structure. It also facilitates coordination amongst various departments.

Question 2.
After completing a course in travel and tourism, Karan started his own travel agency. In order to ensure smooth functioning of his business, he decided to create fourteen job positions divided into four departments on the basis of functions namely, front office department including online queries, reservations department for airways, railways and roadways, accommodation booking department, and securing payments department. In order to avoid any interdepartmental conflicts he decides to specify clearly the lines of authority and areas of responsibility for each job position.
In the context of the above case:

Which function of management is being described in the above lines?
Identify the framework created by Karan within which all managerial and operating tasks are to be performed in his organisation.
Name the type of the framework as identified in part (1) of the question. Also, give any two of its advantages.

Answer:

The Organising function of management is being described in the above lines.
Organisational structure is the framework created by Karan within which all managerial and operating tasks are to be performed in his organisation.
Karan has created a functional structure as job positions are divided into four departments on the basis of functions namely, front office department including online queries, reservations department for airways, railways and roadways, accommodation booking department, and securing payments department.
The two advantages of functional structure are as follows:
- A functional structure promotes work-related specialisation since it places emphasis on specific functions. This helps to increase efficiency in utilisation of manpower as employees perform similar tasks within a department and are able to improve performance.
- It facilitates control and coordination within a department because of similarity in the tasks being performed.

Question 3.
As the head boy and head girl of Trakashay Public School’, Deepak Chugh and Deepika Chawla have been given the responsibility of hosting the Teacher’s Day programme in the school. In order to conduct the programme in a systematic way, Deepak and Deepika first called a meeting of the student council. In the meeting they decided about the content of the programme after taking into consideration the different available alternatives and choosing the best alternative among them. Then the various tasks required to be performed were identified and divided in accordance with predetermined schedule made by them. After that they grouped the similar activities into main groups as skit group, choir group, instrumental music group and contemporary dance group. Then each group was placed under the charge of a council member in accordance with his/her skills and competencies. These council members were in turn informed that they have to take orders and will be accountable only to Deepak and Deepika so as to facilitate coordination amongst various groups.
In context of the above case:

Identify and explain the functions of management being discussed.
Describe briefly any two points highlighting the importance of each of the functions of management as identified in part (1) of the question.
State any two values that ‘Prakashay Public School’ wants to communicate to society.

Answer:

The Planning and Organising functions of management are being discussed.
Planning is deciding in advance what to do, how to do, when to do and who has to do it. It is one of the basic managerial functions. Thus, it involves setting objectives and developing an appropriate course of action to achieve these objectives. Organising is the process of defining and grouping the activities of the enterprise and establishing authority relationships among them.
The importance of the planning function of management is described below:
- Planning provides directions: The well defined plans act as a guide for deciding what course of action should be taken to attain the organisational goals.
- Planning reduces the risk of uncertainty: Planning helps to reduce the risk of uncertainty arising due to the dynamic nature of business environment as it enables a manager to anticipate and meet changes effectively.
  The importance of the organizing function of management is described below:
- Benefits of specialisation: Organising leads to a systematic allocation of jobs amongst the work force. This not only helps to reduce the workload of the employees but also leads to increased productivity. This is because of the fact that specific employees are assigned specific job on a regular basis which leads to specialisation.
- Clarity in working relationships: The process of organising leads to establishment of clear cut reporting relationships. This helps in developing a hierarchical order thereby enabling the fixation of responsibility and specification of the extent of authority to be exercised by an individual.
The two values that Trakashay Public School’ wants to communicate to society are:
- Trust
- Participation

Question 4.
The activities and employees in ‘Elegance Pvt. Ltd.’, a footwear manufacturing company, can be broadly grouped into five departments namely; production, purchase, marketing, accounts and personnel. Over the years the company has grown and expanded its operations manifolds. The company now intends to diversify into leather bags segment. So its management has decided to restructure its operations. They plan to create separate product divisions for each product line wherein the functioning of each division will be further divided into five departments namely; production, purchase, marketing, accounts and personnel.
In context of the above case:
How is the company’s future organisational structures likely to be different from the existing one? State any three points of differences between the two types of organisational structures.
Answer:
At present, the company is following functional structure and it intends to adopt a divisional structure in future.
The difference between Functional organisational structure and Divisional organisational structure is as follows:

S.No.	Basis	Functional Structure	Divisional Structure
1.	Formation	It is based on functions.	It is based on product lines and is supported by functions.
2.	Responsibility	It is difficult to fix responsibility on a department.	It is easy to fix responsibility for performance.
3.	Specialisation	Functional specialisation	Product specialisation.

Question 5.
Rahunath works as a human resource manager in ‘Vanshika Housing Ltd.’ a company engaged in the real estate business. He suggests to the Managing Director of the company to start a sports club in the office where friendly indoor matches can be organised amongst the employees on every Saturday.
In context of the above case:

Identify the type of organisation that Rahunath is desirous of promoting in the company.
State any three advantages of the type of organisation as identified in part (a) of the question.

Answer:

Informal organisation is the type of organisation that Rahunath is desirous of promoting in the company.
The three advantages of informal organisation are stated below:
- It leads to faster spread of information as well as facilitates quick feedback.
- It helps to fulfill the social needs of the members by giving them a sense of belongingness in the organisation and enhances their job satisfaction.
- It contributes towards the fulfillment of organisational objectives by compensating for inadequacies in the formal organisation.

Question 6.
Smriti works as a marketing manager in a small company. The company has recently launched a new brand of room fresheners through aggressive promotion. However, the product is less in demand and its sales are low. Smriti decides to study the reasons for the poor likability of the product through a market research. Keeping in view the volume of work, she knows it will be impractical for her to handle it all by herself. In order to share her work, she deploys a team of executives. She gives them the necessary authority and assigns them the responsibility to conduct the research and report back to her so that she can make the decisions.
In the context of the above case:
Identify and explain the concept used by Smriti to share her work and authority with her subordinates.
Answer:
The concept used by Smriti to share her work and authority with her subordinates is Delegation of authority.
Delegation of authority merely means the granting of authority to subordinates to operate within prescribed limits.

Question 7.
Atul joins as a Regional Sales Head in the export division of a FMCG (fast moving consumer goods) company. In a departmental meeting, he asks one of this subordinates, Manik, to take charge of the company’s new office in Dubai. He allocates the work to him and grants the necessary authority. However, within a month by seeking regular feedback on the extent of work accomplished from Manik, Atul realises that Manik is not doing the work as per his expectations. So he takes away the authority delegated to him and re delegates the work to Prakrit. Due to the time wasted in this switch over, the work at the Dubai office suffers tremendously and the company is not able to meet its desired goals.
In context of the above case:

Why is Manik supposed to give regular feedback about work to Atul?
Can the authority granted to a subordinate be taken back and re-delegated to another person?
Can Manik be held responsible for not meeting the work related expectations of Atul? Give a suitable reason in support of your answer.
Differentiate between authority, responsibility and accountability on the basis of origin and flow.

Answer:

Manik is supposed to give regular feedback about work to Atul as he has been granted authority and entrusted responsibility, so he remains answerable for the outcome.
Yes, the authority granted to a subordinate can be taken back and re-delegated to another person.
Yes, Manik can be held responsible for not meeting the work related expectations of Atul as it is the obligation of a subordinate to perform the assigned duty to the best of his ability and skill.

S.No.	Basis	Authority	Responsibility	Accountability
1.	Origin	Arises from formal position in the organisation.	Arises from delegated authority.	Arises from responsibility.
2.	Flow	Flows downward from superior to subordinate.	Flows upward from subordinate to superior.	Flows upward from subordinate to superior.

Question 8.
Srijan is working as a sales manager in a publishing house. In order the promote the new series of encyclopaedias, the company decides to undertake door to door selling in the city. As the sales manager, Srijan is given the target of selling 5000 units in one month. He appoints a team of five salesmen for the purpose. Each salesman is given the target of selling 1000 units. At the end of the month only 4800 units are sold as one of the salesman, Bobby, falls ill during the last week and is able to sell only 800 units.
In the context of the above case:
Will Srijan be still accountable for the performance of the assigned tasks to Bobby? Why or why not? Give a suitable reason to support your answer.
Answer:
Yes, Srijan will still be accountable for the performance of the assigned tasks to Bobby because only the responsibility for the work assigned can be delegated. The ultimate responsibility of a superior is absolute and cannot be delegated. Thus, irrespective of the extent of delegated authority, the manager shall still be accountable to the same extent as before delegation.

Question 9.
Sudhir is working as a purchase manager in a power sector compahy. All his subordinates hold him in high regard for his exceptional managerial skills. On one hand, as a manager, he is a tough task master and expects strict compliance to the organisational rules and procedures from his subordinates. On the other hand, he makes conscious efforts to develop rapport with his subordinates by interacting freely with them during the lunch breaks in the cafeteria. Many a times these chit chats helps him to get an insight into the views and opinions of his team members about the policies of the organisation.
In the context of the case:

Identify and explain the two types of organisations have been discussed.
State any three differences between the types of organisations as identified in part (a) of the question.

Answer:

Formal organisation and Informal organisation are the two types of organisations which have been discussed.
Formal organisation is the structure of authority relationships created deliberately by the management to achieve its objectives.
Informal organisation is a network of social relationships arising out of the interaction among employees within an organisation.
The difference between Formal organisation and Informal organisation is as follows:

S.No.	Basis	Formal Organisation	Informal Organisation
1.	Origin	It arises as a result of company rules and policies.	It arises as a result of social interaction.
2.	Authority	It arises by the virtue of position in the organisation.	It arises out of personal qualities of the members.
3.	Behaviour	It is directed by rules of the organisation.	There is no set behaviour pattern for the members.

Question 10.
Rakesh joins as a Head Librarian of a newly constructed medical college in Pune. A team of four librarians is placed under him for the smooth functioning of the library. Besides, he has been assigned eight people as support service staff. On the second day of his joining, he is told get a shipment of new books unloaded, stock the bookshelves, and then get all waste (packaging, paper etc.) disposed off within a weeks time. In order to ensure orderliness and speed in the process of setting up of the library, he makes each of the four librarians in charge of five different subjects. Keeping in mind their competence and experience he decides to give them more authority so that they can make autonomous plans and assume the responsibility for the effective implementation of their decisions.
In context of the above case:

Identify and explain the concept used by Rakesh keeping in mind the competence and experience of the other librarians.
Describe briefly any three advantages of using the concept as identified in part (a) of the question.

Answer:

Rakesh has used the concept of decentralisation keeping in mind the competence and experience of the other librarians.
The three advantages of using decentralisation are as follows:
- Decentralisation helps to promote self-reliance and confidence amongst the subordinates: When the subordinates are given freedom to take their own decisions, they learn to depend on their own judgment and develop solutions for the various problems they encounter. Moreover, a decentralisation policy helps to identify those executives who have the necessary potential to become dynamic leaders.
- Relief to top management: Decentralisation reduces the need of direct supervision and helps to save the time of top management for persuing other important work.
- Quick decision making: In a decentralised organisation managers at all levels are allowed to take such decisions independently which lie within their area of jurisdiction. This makes the process of decision making much faster.

Question 11.
‘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 run their stores autonomously by deciding about the products which may be promoted, 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.
In the context of above case:

Identify and explain the policy followed by ‘Home Creations Ltd.’ to run their stores successfully.
Also, give any three points highlighting the importance of the approach followed as identified in part (1) of the question.
List any two values that ‘Home Creations Ltd.’ wants to communicate to its employees.

Answer:

The approach followed by ‘Home Creations Ltd.’ to run their stores successfully is Decentralisation. Decentralisation refers to systematic effort to delegate to the lowest level all authority except that which can be exercised at central points.
The importance of decentralisation is highlighted through the following points:
- Develops initiative among subordinates: Decentralisation helps to promote self reliance and confidence amongst the subordinates. The lower managerial levels are empowered to take their own decisions and they learn to depend on their own judgment. This helps to identify those executives who have the necessary potential to become dynamic leaders.
- Develops managerial talent for the future: Decentralisation is an effective means for training employees to use their talent in real life situations as it provides them many opportunities to prove their abilities. Thus, it helps to create a pool of qualified employees who may be considered to fill up challenging job positions internally through promotions. At the same alsoit so helps to identify those employees who may not be successful in assuming greater responsibility.
- Quick decision making: Decentralisation facilitates quick decision making as the employees are allowed to act independently within their area of jurisdiction.
The two values that ‘Home Creations Ltd.’ wants to communicate to its employees are:
- Initiative
- Trust

Question 12.
Kabir opens a retail mart in a local market. As he knows it will be impossible for him to handle all work alone, he appoints Jasraj to perform tasks on his behalf thereby reducing his workload. This decision provided Kabir with more time to concentrate on important matters. Besides, he recruits eight other persons as support staff. Over the years his business earns a good name for itself. So he opens another outlet in the city. Considering Jasraj’s competence, he gives the independent charge of running the new outlet to him, thereby empowering him by giving him autonomy in functioning of the outlet.
In the context of the above case:

Identify the two concepts which reflect the transition in the role of Jasraj in the above paragraph.
What are the factors that Karan must keep while giving the independent charge of the new outlet to Jasraj?

Answer:

Delegation of authority: In the initial years of business, Jasraj’s role is restricted. He is granted limited authority to perform tasks on behalf of Kabir to reduce his workload and provide him with more time to concentrate on important matters.
Decentralisation of authority: When Jasraj is given an independent charge of the new outlet, he is empowered to take decisions autonomously to ensure successful running of the outlet.
Karan needs to be careful while selecting those decisions related to the outlet which will be taken by Jasraj independently and those that will be retained with him. It is important to define the decision making powers as complete decentralisation would imply the delegation of all decision making functions to Jasraj and this would obviate Karan’s role as the owner of the business.

Question 13.
Karan and Arjun are first cousins. After completing a course in journalism, both of them join a leading newspaper company as sub-editors. Over the years, due to their consistent hardwork, they are promoted to the post of chief editors in different divisions. However, the way of their functioning is totally different. Karan believes in the capabilities of his subordinates and therefore follows the philosophy of selective dispersal of authority throughout all the levels in his division. On the other hand, Arjun prefers to function through strict controls and retains all the decision-making authority with himself.
In the context of the above case:
How do Karan and Arjun differ in their policies related to the extent of delegation of authority? Explain.
Answer:
Karan has adopted a decentralisation policy as he believes in the capabilities of his subordinates. He follows the philosophy of selective dispersal of authority throughout all the levels in his division.
Whereas Arjun follows a policy of centralisation as he prefers to function through strict controls and retains all the decision-making authority with himself.

Case Studies in Business Studies Business Studies Case Studies Business Studies Commerce

CBSE Class 12 Case Studies In Business Studies – Organising

CBSE Class 12 Case Studies In Business Studies – Organising

Related

2 thoughts on “CBSE Class 12 Case Studies In Business Studies – Organising”