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Students who are searching for NCERT MCQ Questions for Class 12 Business Studies Organising with Answers are compiled here to get good practice on all fundamentals. We have provided Organising Class 12 Business Studies MCQ Questions with Answers to help students understand the concept very well. Know your preparation level on MCQ Questions for Class 12 Business Studies with Answers.

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1. Organising process includes one of the following:

(a) Grouping of activities
(b) Prescribing disciplinary action
(c) Determining objectives
(d) Prescribing work schedule

2. One of the following is not an importance of organising:

(a) Role clarity
(b) Performance appraisal
(c) Adaptation to change
(d) Growth and expansion

3. Organisation structure establishes relationships between

(a) organisation and environment
(b) people, work and resources
(c) organisation and society
(d) suppliers and customers

4. Divisional structure leads to conflict in

(a) resource allocation
(b) marketing management
(c) motivation
(d) planning process

5. Which one of the following does not follow scalar chain?

(a) Informal organisation
(b) Functional structure
(c) Formal organisation
(d) Divisional structure

6. .....involves giving authority and responsibility to subordinates

(a) Division of work
(b) Decentralisation
(c) Delegation
(d) Centralisation

7. ...is the process of grouting similar activities together and creating departments

(a) Division of work
(b) Departmentalisation
(c) Delegation
(d) Centralisation

8. .....is the organisational structure in which activities are grouped on the basis of products

(a) Divisional structure
(b) Functional structure
(c) Formal
(d) Informal

9. ___ is the duty for job performance

(a) Authority
(b) Responsibility
(c) Accountability
(d) Both (a) and (c)

10. ......is the right to command

(a) Authority
(b) Responsibility
(c) Accountability
(d) Both (b) and (c)

11. ..........cannot be delegated

(a) Authority
(b) Responsibility
(c) Accountability
(d) Both (a) and (b)

12. When decision-making authority is retained organisation is said to be by higher management levels, an

(a) Decentralised
(b) Centralised
(c) Fragmented
(d) None of the above

13. Authority granted  to an employee should be

(a) More than the responsibility entrusted to him
(b) Less than the responsibility entrusted to him
(c) Equal to the responsibility entrusted to him
(d) All of the above

14. Name the process which co-ordinates human efforts, assembles resources and integrates both into a unified whole to be utilised for achieving specified objectives,

(a) Management
(b) Planning
(c) Organising
(d) Directing

15. It is defined as the framework within which managerial and operating tasks are performed.

(a) Span of management
(b) Organisational structure
(c) Informal organisation
(d) None of the above

16. As the span of management increases in an organisation, the number of levels of management in the organisation

(a) Increases
(b) Decreases
(c) Remains unaffected
(d) None of the above

17. Which organisation structure is consciously or deliberately established?

(a) Formal
(b) Informal
(c) Both (a) and (b)
(d) None

18. Nature of informal organisation is

(a) Mandatory
(b) Rigid
(c) Flexible
(d) None of the above

19. A network of social relationship that arises spontaneously due to interaction at work is called:

(a) Informal organisation
(b) Formal organisation
(c) Delegation  
(d) Decentralisation

20. Degree of decentralisation indicates

(a) degree of authority delegation
(b) degree of responsibility
(c) degree of power delegation
(d) degree of accountability

21. It refers to the number of subordinates that can be effectively managed by a superior,

(a) Organisational structure
(b) Informal organisation
(c) Span of management
(d) None of the above

22. When managers are made responsible for coordinating a particular number of jobs effectively is called

(a) Adaptation
(b) Span of control
(c) Coordination
(d) Job design

23. ___________ clearly defines what tasks & activities shall be carried out at particular job

(a) Role clarity
(b) Coordination
(c) Job design
(d) Specialization

24. Which of the following is not a process of organising?

(a) Division of work
(b) Assignment of duties
(c) Grouping jobs
(d) Decision making

25. The accountability flows

(a) In all directions
(b) Downwards
(c) Upwards
(d) None of the above

 Answer:

1. Answer: (a) Grouping of activities

Explanation: Departmentalization (or departmentalisation) refers to the process of grouping activities into departments. Division of labour creates specialists who need coordination. This coordination is facilitated by grouping specialists together in departments.

2. Answer: (b) Performance appraisal

Explanation: A performance appraisal is the periodic assessment of an employee's job performance as measured by the competency expectations set out by the organization. The performance assessment often includes both the core competencies required by the organization and also the competencies specific to the employee's job.

3. Answer: (b) people, work and resources

Explanation: Organisation structure is the aspect of organising that establishes relationships between people, work and resources.

4. Answer: (a) resource allocation

Explanation: Duplication of Activities: Similar types of activities performed in all divisions leads to duplication of work and increased expenditure. Conflict: There may be conflicts among different divisions over allocation of funds.

5. Answer: (a) Informal organisation

Explanation: Elements of scalar chain:

(i)  Divisional structure

(ii) Formal organisation

(iii) Functional structure

Hence, Informal Organisation does not follow scalar chain.

6. Answer: (c) Delegation

Explanation: Delegation is commonly defined as the shifting of authority and responsibility for particular functions, tasks or decisions from one person (usually a leader or manager) to another. Most delegated tasks take some time, planning and effort to complete properly.

7. Answer: (b) Departmentalisation

Explanation:The process of departmentalizing an enterprise for gaining efficiency and coordination. the grouping of tasks into departments and sub departments and delegating of authority for accomplishment of the tasks.

8. Answer: (a) Divisional structure

Explanation: Divisional structure: - For large diversified organisations activities of personnel are grouped on the basis of different products manufactured.

9. Answer: (b) Responsibility

Explanation: It's the duty of decision-makers to document roles and responsibilities for each position and make them known to employees. When it comes to job performance and satisfaction, certainty fosters confidence and efficiency. Confident employees are more engaged with their jobs, and engaged workers are more productive.

10. Answer: (a) Authority

Explanation: Authority is defined as a person who is considered an expert in his field. A philosophy scholar who publishes books is an example of an authority. Played the sonata with authority. noun. The power to enforce laws, exact obedience, command, determine, or judge.

11. Answer: (c) Accountability

Explanation: The definition of accountability is taking or being assigned responsibility for something that you have done or something you are supposed to do. An example of accountability is when an employee admits an error she made on a project.

12. Answer: (b) Centralised

Explanation: Centralised alludes to an arrangement whereby the decision-making powers are given to a couple of leaders at the highest point of the hierarchical framework. Decisions are made at the top-level management and imparted to the lower level of management for execution.

13. Answer: (c) Equal to the responsibility entrusted to him

Explanation: Authority in management is the option to direct and coordinate the activities of others and to get from their reactions that are suitable to the accomplishment of the purposes, goals, and objectives of the association. The authority that is given to an employee must be equal to the responsibility that he takes on his shoulder.

14. Answer: (c) Organising

Explanation: Organising essentially implies a process which coordinates human efforts, assembles resources and integrates both into a unified whole to be utilised for achieving specified objectives.

15. Answer: (b) Organisational structure

Explanation: An organizational structure is a framework that traces how specific business activities are guided to accomplish the objectives of an association. These activities can incorporate standards, jobs, and obligations.

16. Answer: (b) Decreases

Explanation: because more subordinates can be effectively managed by a superior.

17. Answer: (a) Formal

Explanation: Formal organisational structure is consciously and deliberately designed structure of well-defined jobs. Answer: True; formal organisational structure is consciously and deliberately designed structure of well-defined jobs, each bearing a definite authority, responsibility and accountability.

18. Answer: (c) Flexible

Explanation: Formal organisation is rigid in nature while informal organisation is flexible.

19. Answer: (a) Informal organisation

Explanation: Informal organization as the network of personal and social relationships which is not established or required by formal organization.

20. Answer: (a) degree of authority delegation

Explanation: The delegation of authority refers to the division of labor and decision-making responsibility to an individual that reports to a leader or manager. It is the organizational process of a manager dividing their own work among all their people.

21. Answer: (c) Span of management

Explanation: The Span of Management refers to the number of subordinates who can be managed efficiently by a superior. Simply, the manager having the group of subordinates who report him directly is called as the span of management.

22. Answer: (b) Span of control

Explanation: The span of control, also known as the span of the management, is the term utilised in business management, especially in human resource management. The term alludes to the number of subordinates or direct reports a boss is liable for.

23. Answer: (a) Role clarity

Explanation: Role clarity is how much reasonable comprehension representatives have of their tasks, jobs, responsibilities, and processes at work. This clarity isn’t restricted to their own job; it additionally incorporates their partners’ jobs. Lucidity is a fundamental antecedent of efficiency, and scarcity in that department can create pressure and turmoil.

24. Answer: (d) Decision making

Explanation: A decision can be characterised as a strategy deliberately chosen to accomplish authoritative or administrative goals or objectives. The decision-making process is a persistent and vital part of dealing with any association or business activities.

25. Answer: (c) Upwards

Explanation: Being accountable means remaining by actions, decisions, and the general prosperity of projects or tasks. Accountability is likewise an administration cycle that guarantees workers respond to their boss for their activities and that managers act mindfully also. Accountability flows from the lower management to the upper management.

(a) It originates from within the formal organization due to personal interaction.

(b) It emerges spontaneously and is not deliberately cleated by the management.

(c) The standards of behaviour evolve from group norms rather than official norms.

(d) Independent channels of communication are developed by group members.

(e) It has no definite structure or form.

(f) Authority arises out of personal qualities.

Advantages of Informal Organisation:

(1) It leads to faster spread of information as well towards a quick feedback.

(2) It fulfills the social needs of the members.

(3) It contributes towards fulfillment of organisational objectives by compensating for inadequacies in the formal organisation.

Informal organisation is a network of personal and social relations not established by the formal organisation but arising spontaneously due to people associating themselves with one another.

Features of Informal Organisation are:

(a) Origin: It originates within the formal organisation.

(b) Formation: It emerges spontaneously and is not deliberately created by the management.

(c) Behaviour: The standards of behaviour evolve from group norms.

(d) Communication: Independent channels of communication are developed by group members.

(e) Structure: It has no definite structure or form.

(d) To fulfill the firm’s goals.

Informal organisation

(c) Number of subordinates under a manager.

Limitations of Informal Organisation:

(i) It leads to spread of rumours.

(ii) It may lead to the resistance to change.

(iii) It pressurizes members to conform to group expectations which may be against organisational interest.

Limitations of Informal Organisation:

(i) It leads to spread of rumours.

(ii) It may lead to the resistance to change.

(iii) It pressurizes members to conform to group expectations which may be against organisational interest.

Meaning: It refers to the natural groupings of people in the work situation to meet personal needs.

Limitations:

i. It creates rumours.

ii. It resists changes.

Advantages of Informal Organisation: Following are the advantages of Informal Organisation:

i. Effective Communication: In the absence of any definite course, it is an effective system of communication. Messages can be quickly conveyed from one place to another with the help of this system.

ii. Fulfills Social Needs: In the informal organisation, people having similarity of thoughts and ideas form a group of their own. All the people in the group stand by one another in all the organisational or personal matters.

iii. Fulfills Organisational Objectives: In the informal organisation, the subordinates put their ideas before the superiors without any fear or hesitation. It helps the superiors to understand their difficulties and immediate solution of the problem is sought out. Since the problems are easily solved it becomes easier to achieve the objectives of the organisation.

a. Quick decision making 

b. Effective management

The policy followed is centralization. Drawback is the delay in decision making.

Advantages of Functional Organisation: The following are the advantages of functional organisation structure:

i. Benefits of Specialisation: The whole company is divided into many departments on the basis of major activities to be performed. Each department is headed by an expert manager. This results in more and better work being accomplished in much lesser time. Hence, the benefits of specialisation become available.

ii. Coordination is Established: All the persons working within a department are specialists of their respective jobs. It makes coordination easier at the departmental level.

iii. Managerial Efficiency is Increased: It helps in increasing managerial efficiency because of performing the same work again and again. Further, this results in increased profit.

a. Promotes efficiency in utilisation of manpower 

b. It helps in increasing managerial and operational efficiency

Organising process refers to identifying and grouping of activities to be performed, defining and delegating authority, casting responsibility and establishing relationships to enable people to work together effectively in accomplishing objectives.

Correct option is (d) None of the above

'Delegation of Authority' reduces the work load of a manager.

It helps in increasing managerial and operational efficiency.

Decentralisation should be applied with caution because it can lead to organisational disintegration if the departments start to operate on their own guidelines which may be contrary in the interest of an organisation.

Accountability implies being answerable for the final outcome. It arises from responsibility.

Inflexibility.

Clarity in reporting relationship helps in developing and maintaining effective coordination amongst the departments and the level of functions of management.

Increase in costs

It is easier to fix responsibility

Delay in decision making.

According to Keith Davis “Informal organisation refers to the relationship between the people in the organisation based on the personal attitudes, likes and dislikes etc”.

Meaning of functional structure: It refers to the division of the whole enterprise according to the major functions/activities to be performed by it.

Disadvantages of Functional Organisation: The following are the main disadvantages of functional organisation structure:

1. Ignorance of organisational objectives: Each departmental head works according to his sweet will. They always give more importance to their departmental objectives. Hence, overall organisational objectives suffer. For example, to establish its image, the production department may produce quality product ignoring the fact that market trend favours accepting medium quality product.

2. Difficulty in interdepartmental coordination: All departmental heads may work as per their own wish. No doubt this facilitates coordination within the department but it makes interdepartmental coordination difficult.

3. Conflict of interest: Every departmental head wants to become a functional empire. To satisfy their ego every one demands maximum resources for their department. This situation leads to conflicts among the various departmental heads.

4. Hurdle in complete development: This system is a hurdle in the way of the complete development of the employees. Each employee specialises only in a small part of the whole job.

According to Brown “Formal organisation refers to structure of well-defined jobs each bearing a definite measure of authority, responsibility and accountability”.

Meaning of divisional structure: Divisional organisation structure means division of the whole enterprise according to the major products to be manufactured by it.

Advantages of divisional organisation: The following are the advantages of divisional organisation structure:

i. Development of divisional heads: The head of each division looks after all the functions connected with their product, that is, purchase, sale, advertisement, production, finance, etc. It helps in the development of varied skills in a divisional head.

ii. Divisional results can be assessed: All the activities of each division are carried out independently. Hence, the divisional results (profit/loss) can be assessed easily. On this basis, an unprofitable division can be closed.

iii. Quick decision making: Every division is independent in itself. The divisional manager can take any decision regarding his division independently without consulting other divisional managers. Hence, decisions are quick and effective.

iv. Easy expansion: For every product a separate division is opened. If a company wants to introduce a new product, it can be introduced easily without disturbing the existing division. Hence, it is easy to expand the concern.

Meaning: It refers to the organisation structure which is designed by the management to accomplish a particular task.

Features:

i. It has Defined Inter-relationship: Formal organisation is a sort of arrangement which clearly defines mutual relationship. Everybody knows their authority and responsibilities. This clearly shows who will be reporting to whom.

ii. It is Based on Rules and Procedures: It is important to observe all the predetermined rules and procedures in the formal organisation. The objectives laid down under planning are thus achieved.

iii. It is Deliberately Created: It is deliberately created in order to achieve the objectives of the organisation in an easy manner.

iv. It is Impersonal: Under it, personal feelings are ignored and strict discipline is observed. It is not the person but the work that happens to be important.

Formal Organisation: It refers to jobs and positions with clearly-defined functions and relationships, which is designed by the management to accomplish a particular task.

a. Benefits of Specialisation 

b. Clarity in Working Relationships

Advantages:

(a) It is easier to fix responsibility since mutual relationships are clearly defined.

(b) It avoids duplication of efforts 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 the accomplishment of goals by providing a framework for the operations to be performed.

(e) It provides stability to the organisation because there are specific rules to guide behaviour of the employees.

Formal organisation refers to the organisation structure which is designed by the management to accomplish a particular task.