PYQ 5

VERY SHORT ANSWER QUESTIONS ( 1 or 2 Marks)

QUESTION 1.
To make the annual function of the school successful the principal of the school divided all the
activities into task groups each dealing with a specific area like rehearsals, decoration, stage
management, refreshments etc. Each group was placed under the overall supervision of a
senior teacher. Identify the function of management performed by the Principal in doing so.

                                               (CBSE BOARD 2015)

Answer. Organising

QUESTION 2.
Name the organizational structure which helps in increasing managerial and operational
efficiency.

(CBSE BOARD 2016)

Ans. Functional structure helps in increasing the managerial & operational efficiency.

QUESTION 3.
What is meant by 'Decentralization'?

(CBSE BOARD 2016)

Answer. Decentralisation means delegation of authority throughout all the levels of the
organisation. This empowers lower levels to take decisions regarding problems faced by them
without having to go to the upper levels. It promotes the belief that people are competent,
capable and resourceful and can assume responsibility for effective implementation of their
decisions.

QUESTION 4.
Give the meaning of 'organising as a process'.

(CBSE BOARD 2016)

Answer. Organising refers to the process of aligning various activities in an organisation in a
certain specific order. It involves designing the roles of the personnel such that the efforts by the
employees along with the resources with them are coordinated towards the accomplishment of
the organisational goals.

QUESTION 5.
Name the type of organisational structure, which promotes flexibility and initiative.

(CBSE BOARD 2016)

Answer. Divisional Structure promotes flexibility and initiative.

QUESTION 6.
Give the meaning of 'Delegation'.

(CBSE BOARD 2016)

Answer. Delegation refers to the transfer of authority and responsibility by the superior to his or
her subordinates.

QUESTION 7.
Give the meaning of 'authority' as an element of delegation.

(CBSE BOARD 2016)

Answer. Authority refers to the power given to an individual to command and direct the
subordinates and take various decisions.

QUESTION 8.
Name the type of 'organisational structure' which promotes efficiency in utilisation of
manpower.

(CBSE BOARD 2016)

Answer. Functional structure is a type of organisation structure which promotes efficiency in
utilization of manpower

QUESTION 9.
Name the organization which is deliberately created?
Answer: Formal Organisation

QUESTION 10.
Organizing helps in optimum utilization of resources. Which type of resources does it refer?
Answer: All raw materials, financial and human resources.

QUESTION 11.
Give any one importance of organizing?
Answer: Development of personnel.

QUESTION 12.
Divisional structure is more suitable for the firms having several products and each product has distinct features. Do you agree?
Answer: Yes, I do agree.

QUESTION 13.
Which term denotes “The number of subordinates that can be effectively managed by a
superior?
Answer: Span of control.

QUESTION 14.
What are the elements of delegation of authority?
Answer: Responsibility, Authority, Accountability.

QUESTION 15.
A company has its registered office in Delhi, manufacturing unit at Gurgaon & marketing &
sales department at Faridabad. The company manufactures the consumer products. Which
type of organization structure should it adopt to achieve its targets.
Answer: Functional organization structure.

SHORT ANSWER QUESTIONS (3 or 4 Marks)

QUESTION 16.
State any three advantages of formal organization.

CBSE BOARD 2015

Answer. Advantages of Formal organisation:
(a) It is easier to fix responsibility since mutual relationships are clearly defined.
(b) It avoids duplication of effort since there is no ambiguity in the role that each member has to
play.
(c) It maintains unity of command through an established chain of command
(d) It leads to accomplishment of goals by providing a framework for the operations to be
performed by each and every person.
(e) It provides stability to the organisation as there are specific rules to guide behavior of
employees.

QUESTION 17.
‘Panda Trucks Ltd.’ decided to set-up its new truck manufacturing factory in the backwards
area of Bihar were very less job opportunities were available. People of that area welcomed
this effort of ‘Panda Trucks Ltd’. To attract people to work in its factory it also decided to
provide many other facilities like school, hospital, market etc. in the factory premises.
‘Panda Trucks Ltd.’ started earning huge profits. Another competiting company asked its
production manager ‘Sanjay’ to investigate the reasons of earning huge profits by ‘Panda
Trucks Ltd.’
Sanjay found that in both the companies there was systematic coordination among the various
activities to achieve 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 ‘Panda Trucks Ltd.’ was allowing flow of
communication in all the directions as per the requirement which lead to faster spread of
information as well as quick feedback.
(a) Identify the type of organisation, which permits ‘Panda Trucks Ltd.’ the flow of
communication in all the directions.
(b) State another advantage of the type of organisation identified in (a) above.
(c) State any two values which ‘Panda Trucks Ltd.’ wanted to communicate to the society.
Answer.
(a) In Panda Trucks Ltd., informal organisation permits the flow of communication in all the
directions.
(b) The another advantage of informal organisation is fulfilment of social needs. An informal
organisation allows for personal communication beyond the officially defined roles. This enables
the employees to interact with like-minded colleagues. This unofficial interaction provides a
sense of belongingness among the employees towards one another and towards the
organisation.
(c) The two values that ‘Panda Trucks Ltd.’ wanted to communicate to the society are given
below.
I. Fulfilling social responsibility
II. Working for benefits of employees

QUESTION 18.
Hindustan Ltd. , is manufacturing computers, soaps and textiles. Which type of organizational
structure would suit the requirements of such organization? State any
three advantages of this organization structure.
Answer: Divisional structure would suit the requirements of Hindustan limited.
Advantages:
i. All activates associated with one product can be easily integrated.
ii. Decision making is faster and effective.
iii. Performance of individual product can be easily assessed.

QUESTION 19.
“A Manager is of the view that he is not responsible for the quality of work that he has
delegated to his subordinate.” Do you agree with his view point? Justify you answer by giving
proper agreements.
Answer: Statement is incorrect as the principle of absoluteness of responsibility is violated in this
case.

QUESTION 20.
A Manager revises the production target from 3000 kg per month to 6000 kg per month. But
the authority to purchase raw material was not given by the manager. Therefore, revised
production target could not be achieved. Who is responsible?
Answer: The Manager is responsible because responsibility has been created without granting
authority. The principle of parity of authority and responsibility has been violated.

QUESTION 21.
“Authority can be delegated but accountability cannot.” Explain the statement.
Answer: According to the principle of absolute responsibility, authority can be delegated but a
manager cannot delegate responsibility. The manager remains responsible to his own superior
for the task, which he may assign to his subordinates. Every superior is responsible for the acts
of this subordinates to whom he delegates authority for any work.

LONG ANSWER TYPE QUESTIONS (5 OR 6 MARKS)

QUESTION 22.
A company has been registered under the Companies Act with an authorized share capital of
Rs. 20,000 crores. Its registered office is situated in Delhi and manufacturing unit in a backward
district of Rajasthan. Its marketing department is situated in Bhopal. The company is
manufacturing Fast Moving Consumer Goods (FMCG).
(i) Suggest with the help of a diagram a suitable organization structure for the company.
(ii) State any three advantages of this organization structure.
Answer. Divisional Structure
Advantages of Divisional structure:
(i) Product specialization helps in development of varied skills.
(ii) Helps in fixation of responsibility.
(iii) Promotes flexibility as each division is autonomous.
(iv) Facilitates expansion and growth of the organisation.

QUESTION 23.
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 rapidly 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.
(i) Identify and briefly explain the concept used by Aman Chadha in the above case which
helped him in focusing on objectives.
(ii) Also, state any four points of importance of the concept identified in above.

CBSE BOARD 2017

Answer. The concept used by Aman Chadha is Delegation. This is because, Aman found the
volume of work impractical to handle by himself and thus, decided to expand his team. After this,
he delegated the tasks to Ishan and Vrinda so that Aman himself can focus on the objectives.
Thus, here, he is delegating the tasks to his subordinates.
The following points highlight the importance of delegation.
1. Managerial efficiency: By delegating work to the subordinates, the managers can concentrate
on priority areas and also venture into new areas. This freedom from the routine tasks enhances
the efficiency of the managers.
2. Employee proficiency: As the subordinates are entrusted with the responsibility of completing
a task, they get an opportunity to prove their abilities and apply their skills. This helps them to
gain experience and improve their proficiency.
3. Motivation: Because of delegation of authority to the subordinates they get an opportunity
to display their efficiency and capacity.
4. Growth: Delegation helps in the preparation of efficient managers who can take up leading
positions during the growth phase of the organisation. This facilitates easy growth and expansion
of the organisation.

QUESTION 24.
What are the advantages and disadvantages of divisional structure?
Answer:
Advantages:
1. All activities associated with one product. It can be easily integrated.
2. Faster decision making
3. Performance can be easily assessed and remedial action can be taken
4. It facilitates expansion and growth, as new divisions can be added
Disadvantages:
1. This gives rise to duplication of effort among its various divisions.
2. Manages in each department focus on their own product without thinking the rest of the
organization.
3. There may not be full utilization of different equipment.
4. Conflict may arise among different divisional heads.

QUESTION 25.
Distinguish between centralisation and decentralisation.

QUESTION 26.
How is functional structure different from a divisional structure?

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.

1.    Identify and briefly explain the concept used by Aman Chadha in the above case which helped him in focusing on objectives.

2.    Also, state any four points of importance of the concept identified in (i) above. (CBSE, Delhi 2017)

Answer:

1.    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.

2.    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.

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)

1.    Identify and state the step of organizing process which has not been carried out properly and contributed to this problem.

2.    State the two steps of the organizing process which have been taken by Kanaputti to respond to the complaint of Ramdas.

3.    Also state two points of importance of organizing as reflected in the above case.

Answer:

1.    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.

2.    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.

3.    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.

1.    Identify and state the type of organisation mentioned in the above para.

2.    State one feature of the concept identified in part (a) as mentioned in the above para.

3.    What was the purpose behind the formulation of rules for the employees that restricted their personal communication with the employees of other departments?

4.    State two values violated by Mr. Raghav. (CBSE, Sample Paper, 2017)

Answer:

1.    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.

2.    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.

3.    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.

4.    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.

1.    Identify the type of organisation which permits Steelo Ltd. the flow of communication in all the directions.

2.    State another advantage of the type of organisation identified in part (1) above.

3.    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.

1.    Identify the type of organisation which permits the flow of communication in all the directions in My Car Ltd.

2.    Also state an advantage of the type of organisation identified in part (1) above.

3.    State any two values which My Car Ltd. wants to communicate to the society. (CBSE, OD 2016)

Answer:

1.    An informal organisation permits the flow of communication in all the directions in My Car Ltd.

2.    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.

3.    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.

1.    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.

2.    State any two limitations of this framework (CBSE, Sample Paper, 2015-16)

Answer:

1.    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.

2.    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.

1.    Identify the concepts of management involved in the above situation and quote the lines which help in their identification.

2.    Also identify the values which the company wants to communicate to society. (CBSE, Sample Question Paper 2015

Answer:

1.    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.”

2.    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.

1.    Identify the concept used by Samir Gupta through which he was able to steer his company to greater heights.

2.    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.

1.    Identify the concept used by Neeraj Gupta through which he was able to steer his company to greater heights.

2.    Also explain any three points of importance of this concept.

Answer:

1.    The concept used by Sameer Gupta/ Neeraj Gupta through which he is able to steer his company to greater heights is Decentralisation.

2.    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.

1.    Suggest how the organisation can overcome the problems faced by it.

2.    Give any two benefits it will derive from your suggestions. (CBSE, Sample Paper, 2014-15)

Answer:

1.    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.

2.    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:

1.    Identify the function of management being performed by Ishita.

2.    Describe briefly the various steps involved in the performance of the function of management as identified in part (1) of the question.

Answer:

1.    The Organising function of management is being performed by Ishita.

2.    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:

1.    Which function of management is being described in the above lines?

2.    Identify the framework created by Karan within which all managerial and operating tasks are to be performed in his organisation.

3.    Name the type of the framework as identified in part (1) of the question. Also, give any two of its advantages.

Answer:

1.    The Organising function of management is being described in the above lines.

2.    Organisational structure is the framework created by Karan within which all managerial and operating tasks are to be performed in his organisation.

3.    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:

1.    Identify and explain the functions of management being discussed.

2.    Describe briefly any two points highlighting the importance of each of the functions of management as identified in part (1) of the question.

3.    State any two values that ‘Prakashay Public School’ wants to communicate to society.

Answer:

1.    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.

2.    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.

3.    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:

1.    Identify the type of organisation that Rahunath is desirous of promoting in the company.

2.    State any three advantages of the type of organisation as identified in part (a) of the question.

Answer:

1.    Informal organisation is the type of organisation that Rahunath is desirous of promoting in the company.

2.    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:

1.    Why is Manik supposed to give regular feedback about work to Atul?

2.    Can the authority granted to a subordinate be taken back and re-delegated to another person?

3.    Can Manik be held responsible for not meeting the work related expectations of Atul? Give a suitable reason in support of your answer.

4.    Differentiate between authority, responsibility and accountability on the basis of origin and flow.

Answer:

1.    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.

2.    Yes, the authority granted to a subordinate can be taken back and re-delegated to another person.

3.    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.

4.     

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:

1.    Identify and explain the two types of organisations have been discussed.

2.    State any three differences between the types of organisations as identified in part (a) of the question.

Answer:

1.    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.

2.    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:

1.    Identify and explain the concept used by Rakesh keeping in mind the competence and experience of the other librarians.

2.    Describe briefly any three advantages of using the concept as identified in part (a) of the question.

Answer:

1.    Rakesh has used the concept of decentralisation keeping in mind the competence and experience of the other librarians.

2.    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:

1.    Identify and explain the policy followed by ‘Home Creations Ltd.’ to run their stores successfully.

2.    Also, give any three points highlighting the importance of the approach followed as identified in part (1) of the question.

3.    List any two values that ‘Home Creations Ltd.’ wants to communicate to its employees.

Answer:

1.    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.

2.    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.

3.    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:

1.    Identify the two concepts which reflect the transition in the role of Jasraj in the above paragraph.

2.    What are the factors that Karan must keep while giving the independent charge of the new outlet to Jasraj?

Answer:

1.    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.

2.    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.

 Q. 1. Ishita works as a corporate event coordinator in an event management company. She

has been made an overall official in charge 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 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:

1. Identify the function of management being performed by Ishita.

2. Describe briefly the various steps involved in the performance of the function of

management as identified in part (a) of the question.

Ans.

1. The Organizing function of management is being performed by Ishita.

2. The steps involved in the process of organizing are as follows:

1. Identification and Division of Work:

2. Departmentalization:

3. Assignment of Duties:

4. Establishing Reporting Relationship:

Q. 2. As the head boy and head girl of ‘Prakashay 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 the 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:

1. Identify of the above case:

2. Describe briefly any two points highlighting the importance of each of the functions of

management as identified in part (a) of the question.

3. State any two values that ‘Prakashay Public School’ wants to communicate to

society.

Ans.

1. The planning and organizing 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.

Organizing is the process of defining and grouping the activities iof the enterprise and

establishing authority relationships among them.

1. The importance of the planning function of management is described below:

1. Planning provides directions:

2. Planning reduces the risk of uncertainty:

The importance of the organizing function of management is described below:

1. Benefits of specialization:

2. Clarity in working relationships:

1. The two values that ‘Prakashay Public School’ wants to communicate to society are:

1. Trust

2. Participation

Q. 3. Rishu, Ashu and Ravi have decided to start a business of manufacturing toys. They

identified the following main activities which they have to perform;

1. Purchase of raw materials,

2. Purchase of machinery,

3. Production of toys,

4. Arrangement of finance,

5. Sale of toys,

6. Identifying the areas where they can sell their toys

7. Selection of employees

In order to facilitate the work they thought that four managers should be appointed to look

after

1. Production,

2. Finance,

3. Marketing’

4. Personnel.

1. Identify the function of management involved in the above-mentioned para.

2. Quote the lines from the above para which help you in identifying this function.

3. State the steps followed in the process of this function of management. (6

marks)

Ans.

1. Organizing

2. ‘they identified the following main activities which they have to perform.’

‘In order to facilitate the work they thought that four managers should be appointed to look

after

1. Production,

2. Finance,

3. Marketing,

4. Personnel.’

1. Steps in Organizing Process:

1. Identify and dividing the work into manageable activities.

2. Departmentalization / Departmentation where activities of a similar nature are

grouped together.

3. Assignment of duties to job positions.

4. Establishing reporting relationships so that each individual knows from whom he has

to take orders and to whom he is accountable.

Q. 4. Tanushree runs a factory wherein she manufacturers shoes. The business has been

doing well and she intends to expand by diversifying into leather bags as well as western

formal wear, thereby making her company a complete provider of corporate wear. This will

enable her to market her business unit as the one shop for working women. Which type of

structure would you recommend for the expanded organization and why? State any four

advantages of this organization structure. (6

marks)

Ans. ‘Divisional structure’ is suitable for the expanded business since it will produce multiple

products – shoes, leather bags and western formal wear. That means, the organization will

grow; and will need to add more employees; create more divisions; and introduce new levels

of management.

By adopting divisional structure, the company will get the following advantages:

1. It will facilitate growth and expansion. Now the business of Tanushree will have

multiple divisions shoes, bags and formal wear. Within division, functions like

production, marketing finance, purchase, etc. will be performed to achieve the

objectives of the business.

2. Greater accountability will be possible because the divisional managers can be held

separately accountable for their respective division’s profits, costs, etc.

3. Product specialization: A divisional head gains experience in all functions related to a

particular product.

4. Flexibility and initiative: It promotes flexibility and initiative because each division

functions as an autonomous unit which leads to faster decision-making.

Q. 5. The directors of Gunjan Ltd. an organization manufacturing colour televisions, have

asked their production manager to achieve a target production of 150 televisions per day.

They production manager has asked his foreman to achieve this target, but he did not give

him the authority for the requisition of tools and materials from the stores department. The

foreman could not achieve the desired target. Can the directors blame the production

manager, and can the production manager blame his foreman for and achieving the target?

Explain in brief the relevant principles relating to this situation in support of your answer.

(4 marks)

Ans. Yes, the directors can blame the production manager, although he had delegated the

task to his foreman because accountability cannot be delegated by a manager. The

production manager shall still be accountable for the performance of the assigned tasks.

(Principle of absoluteness of accountability)

However, the production manager cannot blame his foreman for not achieving the target

because he did not give him the authority for the requisition of tools and materials from the

stores department. Responsibility with authority will make the subordinate ineffective, i.e.,

he will not be able to perform his duties well. (Principle of authority and responsibility)

Q. 6. 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:

1. Identify and explain the policy followed by ‘Home Creations Ltd.’ to run their stores

successfully.

2. Also, give any three points highlighting the importance of the approach followed as

identified in part (a) of the question.

3. List any two values that ‘Home Creations Ltd.’ wants to communicate to its

employees.

Ans.

1. The approach followed by ‘Home Creations Ltd.’ to run their stores successfully is

Decentralization. Decentralization refers to systematic effort to delegate to the lowest

level all authority except that which can be exercised at central points.

2. The importance of decentralization is highlighted through the following points:

1. Develops initiative among subordinates:

2. Develops managerial talent for the future:

3. Quick decision making:

1. The two values that ‘Home Creations Ltd.’ wants to communicate to its employees

are:

1. Initiative

2. Trust

Q, 7, Sudhir is working as a purchase manager in a power sector company. 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 organizational

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 I 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 organization.

In the context of the case:

1. Identify and explain the two types of organizations have been discussed.

2. State any three differences between the types of organizations as identified in part (a)

of the question.

Ans.

1. Formal organization and Informal organization are the two types of organizations

which have been discussed.

Formal organization is the structure of authority relationships created deliberately by the

management to achieve its objectives.

Informal organization is a network of social relationships arising out of the interaction among

employees within an organization.

1. The difference between Formal organization and Informal organization.

Q. 8. Rajeev, the owner of Pathway 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 unemployed youth.

On evaluation of different ways, it was decided to take the help of local residents. To

achieve the desired goal various activities were identified like

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

2. Collection of garbage;

3. Disposal of garbage, etc.

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

1. Identify the concepts of management involved in the situation and quote the lines

which help in their identification.

2. Also identify the values which the company wants to communicate to the society.

(4 marks)

Ans.

1. Concepts involved – Planning and Organizing

Lines for planning:

‘one suggested …. Unemployed youth’

‘on evaluation …. Local residents’

‘campaign to create awareness …. Surroundings’

Lines for organizing:

‘To achieve …. Disposal of garbage etc.’

‘after identification of different activities … different members’

1. Values:

● Respect for environment

● Team work

● Fulfilling social responsibility

Q. 9. A company manufacturing sewing machines set up in 1946 follows formal organization

structure. It is facing a lot of problems such as delay in decision-making. As a result, it is

not able to adapt to the changing business environment. The workforce is also not

motivated, there is problem of red tapism and employees’ turnover is very high.

1. Advise the company with regard to change it should bring about in its organization

structure to overcome the problems faced by it.

2. Give reasons in terms of benefits it will derive from the changes suggested by you.

3. In which sector can the company diversify keeping in mind the declining market for

the product the company is manufacturing? (6 marks)

Ans.

1. The company should give due importance to informal organizational structure along

with the formal structure. It enhances their job satisfaction. This will overcome the

problem of lack of motivation. Informal groups can also provide useful

communication channels, which may help to transmit useful information quickly.

2. Benefits of informal organizational structure;

1. Faster spread of information:

2. Fulfillment of social needs:

3. Fills inadequacies of formal structure:

1. The company can diversify its activities by introducing embroidery machines. It can

also design special machines keeping in mind the requirement of ready – made

garment manufacturers, etc. by diversifying in the same field, it can get maximum

utilization of existing resources.

Q. 10. A company manufacturing consumer goods has grown in size. It was a market

leader but with changes in economic environment and with the entry of MNCs its market

share is declining. The company was following a centralized business model as even the

minor decisions were in the hands of top level. Before 1991 this model was suitable for

company but now the company is under pressure to reform.

What changes should the company bring about in order to retain its market share? Give its

three points of importance.

(5 marks)

Ans. The top management of the company must share decision-making authority with

middle level land supervisory level also. It should introduce the concept of ‘Decentralization’

instead of following complete centralization. In the current scenario of business

environment, there is need for fast action and quick decision-making which is possible only

with decentralization.

Importance of decentralization:

1. Relief to top management:

2. Develops initiative amongst subordinates:

3. Quick decision-making:

Q. 11. 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 CEO starts delegating some of his authority to the General Manger, who

also felt himself overburdened and with the approval of CEO disperses some of his authority

to various levels throughout the organization. Identify the concept of management

discussed above. (1 mark)

Ans. Decentralization

Q. 12. A Steel Manufacturing Company has the following main jobs:

1. Manufacturing, (ii) Finance, (iii) Marketing, (iv) Personal and, (v) Research and

development.

1. Which type of organizational structure will you choose for this type of a company and

why?

2. State any six advantages that this structure offers to an organization. (4

marks)

Ans.

1. Functional structure; because the company has diversified activities and operations

require a high degree of specialization.

2. Advantages of functional structure:

1. Functional structure leads to occupational specialization.

2. It promotes control and coordination within the department.

3. It helps in increasing managerial and operational efficiency and this results in an

increase in profits.

4. It leads to minimum duplication of effort.

5. It makes training of employees easier.

6. It ensures that different functions get due attention.

Q. 13. Identify and state the type of organization structure that should be followed by the

company in each case:

1. Vrinda Ltd. grows, so it needs to add more employees, create new departments and

introduce new levels of management.

2. Shreya Ltd. is a large organization having diversified activities and operations

requires a high degree of specialization: (3 marks)

Ans.

1. Divisional structure

It is an organization structure comprising of separate business units or divisions, created on

a certain basis, e.g. product lines.

1. Functional structure

It is an organization structure formed by grouping of jobs of similar nature under functions

and organizing these functions as separate departments like production, finance, marketing,

etc.

Q.1 4. Kiran Industries is a company manufacturing 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 organization. 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.

1. Name the framework, which the diversified organization should adopt, to enable it to

cope with the emerging complexity? Give one reason in support of your answer.

2. State any two limitations of this framework. (4 marks)

Ans.

1. Divisional Structure

Reason in support of the answer (any one)

1. Product Specialization helps in the development of varied skills in a divisional head

and this prepares him for higher positions.

2. Divisional heads are accountable for profits, as revenues and costs related to

different departments can be easily identified and assigned to them.

3. It promotes flexibility and initiative because each division functions as an autonomous

unit which leads to faster decision making.

4. It facilitates expansion and growth as new divisions can be added without interrupting

existing operations by merely adding another divisional head and staff for the new

product line.

1. Limitations of the Divisional Structure: (Any two)

1. Conflict may arise among different divisions with reference to allocation of funds.

2. It may lead to increase in costs since there may be a duplication of activities across

products.

3. Divisional interests may supersede organizational interests.

Q. 15. Samir Gupta started a telecommunication 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 its

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 area competent, capable

and resourceful and can assume responsibility for 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.

1. Identify the concept use by samir Gupta through which he was able to steer his

company to greater heights.

2. Also explain any three points of importance of this concept. (4 marks)

Ans.

1. Decentralization

2. Importance of Decentralization

1. Relief to top management:

2. Develops initiative amongst subordinates:

3. Develops managerial talent for the future:

Q. 16. ‘Himalaya Ltd.’, is engaged in manufacturing of washing machines. The target of the

organization is to manufacture 500 washing machines in a day. There is an occupational

specialization in the organization which promotes efficiency of employees. There is no

duplication of efforts in such type or organization structure.

Identify the type of organization structure described above. (1 mark)

Ans. Functional structure.

Q. 17. 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 organizational goals. Every employee knew who was

responsible and accountable to whom. The only difference was that in his organization,

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.

1. Identify the type of organization which permits Steelo Ltd. the flow of communication

in all the directions.

2. State another advantage of the type of organization identified in part (a) above.

3. State any two values which Steelo Ltd. wanted to communicate to society.

Ans.

1. An informal organization permits the flow of communication in all the directions in My

Car Ltd.

2. Another advantage of informal organization is that it helps to fulfill the social needs of

the members by giving them a sense of belongingness in the organization and

enhances their job satisfaction.

3. The two values that My Car Ltd. wants to communicate to the society are:

1. Trust

2. Social Responsibility

Q. 18. 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.

1. Suggest how the organization can overcome the problems faced by it.

2. Give any two benefits it will derive from your suggestions.

Ans.

1. The organization can overcome the problem faced by it by adopting informal

organization. Informal organization emerges from within the formal organization

when people interact beyond their officially defined roles.

2. The two benefits of informal organization are as follows:

1. It helps to fulfill the social needs of the members by giving them a sense of

belongingness in the organization and enhances their job satisfaction.

2. It contributes towards the fulfillment of organizational objectives by compensating for

inadequacies in the formal organization.

Q. 19. 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:

1. Which function of management is being described in the above lines?

2. Identify the framework created by Karan within which all managerial and operating

tasks are to be performed in his organization.

3. Name the type of the framework as identified in part (a) of the question. Also, give

any two of its advantages.

Ans.

1. The Organizational function of management is being described in the above lines.

2. Organizational structure is the framework created by Karan within which all

managerial and operating task are to be performed in his organization.

3. 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, reservation department for airways, railways and roadways, accommodation

booking department, and securing payments department.

The two advantages of functional structure

Q. 20. 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 for Manik, Atul realizes 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:

1. Why is Manik supposed to give regular feedback about work to Atul?

2. Can the authority granted to a subordinate be taken back and re-delegated to another

person?

3. Can Manik be held responsible for not meeting the work related expectations of Atul?

Give a suitable reason in support of your answer.

4. Differentiate between authority, responsibility and accountability on the basis of origin

and flow.

Ans.

1. 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.

2. Yes, the authority granted to a subordinate can be takenback and re-delegated to

another person.

3. Yes, Manik can be held responsible for not meeting the work related expectations of

Atul as it is the obligation of subordinate to perform the assigned duty to the best of

his ability and skill.

Q. 21. 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 to 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:

1. Identify and explain the concept used by Rakesh keeping in mind the competence

and experience of the other librarians.

2. Describe briefly and three advantages of using the concept as identified in part (a) of

the question.

Ans.

1. Rakesh has used the concept of decentralization keeping in mind the competence

and experience of the other librarians.

2. The three advantages of using decentralization are as follows:

1. Decentralization helps to promote self-reliance and confidence amongst the

subordinates:

2. Relief to top management:

3. Quick decision making:

Q. 22. A truck manufacturing company has its registered office in Delhi, manufacturing unit

at Gurgaon and marketing department is located at Faridabad. The company manufactures

different types of trucks. Which type of organizational structure should it adopt to achieve its

target? Give reasons. State any four any advantages of this organization structure.

(6)

Ans. The company should adopt ‘Functional Structure’ since it manufactures trucks only (a

single product). The company has separate departments like manufacturing unit (Gurgaon),

marketing and sales department (Faridabad), etc. That means, the size of the organization

is large, it has diversified activities and operations require a high degree of specialization.

So, it should adopt functional structure.

By adopting functional structure, the company gets the following advantages:

1. Each functional area of business (production, marketing, finance and personnel) will

be controlled by an expert / specialist. It will lead to specialization.

2. It will lead to minimum duplication of efforts. This results in lower costs.

3. It helps in increasing managerial and operational efficiency and this results in

increased profit.

4. It ensures that different functions (production, marketing, finance, etc.) get due

attention.

Q. 23. 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.

1. Suggestion how the organization can overcome the problems faced by it.

2. Give any two benefits it will derive from your suggestion. (5)

Ans.

1. Introduction of informal organization

2. Two benefits the firm will derive are:

1. Faster spread of communication and quick feedback.

2. It helps to fulfill the social needs of the members and enhances their job satisfaction.

Q. 24. The Employees of Manik Ltd., a software company, have formed a dramatic group for

their recreation. Name the type of organization so formed and state its four features.

(4)

Ans. The type or organization formed by employees of Manik Ltd. is informal organization

Features of Informal Organization:

1. An informal organization originates from within the formal organization as a result of

personal interaction among employees.

2. The standards of behavior evolve form group norms rather than officially laid down

rules.

3. Independent channels of communication without specified direction of flow of

information are developed by group members.

4. It emerges spontaneously and is not deliberately created by the management.

Q. 25. Ravi runs a locks manufacturing factory. He manufactures locks used in houses. He

wants to expand his business. For this, he wants to enter into the manufacturing of locks for

cars and motorcycles.

Which type of organizational structure will he choose for his factory and why? (1 mark)

Ans. Functional structure; because the company produces a single product (locks used in

houses) or a small number of related products (locks for cars and motorcycles).

Q. 26. Neeta Ltd. is engaged in the production of marble articles. The members of the

organization have friendly relationships among them. What type of organization is Neeta

Ltd.? (1

mark)

Ans. Informal organization

Q. 27. Sherya Ltd. has been awarded recently with the ‘Best Employer of the Year Award’.

The company has believed in the ideas and suggestions of its employees. There is

systematic dispersal of decision making at all levels. There is no delay in delivery of orders

to customers due to prompt decisions taken by employees.

1. Identify and state the concept of management followed by the company.

2. State any two values responsible for the success of the organization. (4

marks)

Ans.

1. Decentralization

It refers to systematic delegation of authority through all the levels of management and in all

the departments except that which can be exercised only at central points.

1. Values:

● Confidence / faith in the abilities of the subordinates

● Initiative by subordinates

● Respect towards others’ opinion

● Acceptance (any two)

Q. 28. An electronic company manufacturing TV and Refrigerators wants to bring two new

Washing machines and ACs in the market. For each product separate division is to be set

up. In charge of washing machine division and ACs division will be females and disabled

person respectively.

1. What type of organizational structure is suitable for this company? Give reason.

2. State any one value which has been considered by the company. (3

marks)

Ans.

1. Divisional structure; because it is a large company having multiple products with

distinctive characteristics.

2. Values:

● Women Empowerment

● Promotion of equality (any one)

Q. 29. A manager has kept all right of decision making with himself. Each and every

employee has to come to him for orders again and again.

1. Identify and state the concept of management not followed by the manager.

2. Which values are being violated here? (4

marks)

Ans.

1. Delegation of authority

It means transfer of authority from a superior to a subordinate to operate within the

prescribed limits.It has three elements – authority, responsibility and accountability.

1. Values:

● Wastage of time and resources

● Lack of employee development without delegation of authority

● Frustration in employees (any two)

Q. 30. At Alpha Ltd. all expenses bills of employees are processed by general manager

himself. He feels quite overburdened. He decided to delegate this work to deputy general

manager. But after sometime the deputy general manager, disperses this authority to

various levels throughout the organization. Now all bills for travelling are processed through

respective department supervisor;

Name the concept of management highlighted in above case before and after delegating the

authority.

Ans. Before delegation of authority-centralization.

After delegating of authority-decentralization.