Explore topic-wise InterviewSolutions in .

(a) Assignment of duties 

(b) Establishing reporting relationship: In this process, hierarchal structure establishing clear relationships among individual is established so that each individual should know who he has to take orders from and to whom he is accountable. 

(c) (i) Discipline (ii) Respect

(a) Yes 

(b) Formal and informal organization. 

(c) i) It is not stable. 

(ii) No authority responsibility relationships. 

(iii) No formal rules exist. 

(iv) Cannot be presented in organization charts. No official line of communication.

(a) A tall structure has a narrow span of management.

Correct option is c. Both (A) and (R) are correct

Correct option is c. Assertion (A) is trueand reason (R) is false

The importance of organising becomes clear with the help of the following points:

i. Benefits of Specialisation: Under organising all the activities are sub-divided into various works or jobs. For all the sub-works, competent people are appointed who become experts by doing a particular job time and again. In this way, maximum work is accomplished in the minimum span of time and the organisation gets the benefit of specialisation.

ii. Clarity in Working Relationship: Organising clarifies the working relations among employees. It specifies who is to report whom. Therefore, communication becomes effective. It also helps in fixing accountability.

iii. Optimum Utilisation of Resources: Under the process of organising, the entire work is divided into various small activities. There is a different employee performing every job. By doing so, there is no possibility of any activity being left out or any possibility of unnecessary duplicating any job. Consequently, there is optimum utilisation of all the available resources (e.g., material, machine, financial, human resource, etc.) in the organisation.

iv. Adaptation to Change: Organising process makes the organisation capable of adapting to any change connected with the post of the employees. This becomes possible only because of the fact that there is a clear scalar chain of authority for the managers right from the top to the lower level. Whenever, a managerial post falls vacant, it is immediately filled up by promotion. Since every subordinate is well aware of the working of his boss, there is no difficulty for his taking up the new post.

The functional organisation structure is suitable in the situations given below:

i. where the size of the business unit is large.

ii. where specialisation is required.

iii. where there is only one product that is sold.

Organising is the second function of management. Organising is the process of identifying and grouping the activities of the enterprise and establishing authority and relationship among them, (or) According to Henry Fayol “To organise a business is to provide it with everything, useful to its functioning – raw material, machines, tools, capital and personnel”.

Identification & Division of work.

There are three elements of delegation. 

1. Granting the authority to the subordinates 

2. Assigning responsibility to subordinates 

3. Accountability among subordinates.

Authority: Authority is the power to command employees and instruct them to perform a job. It flows from top to bottom. The subordinates execute the given jobs as per the instructions of the superior. Authority is always restricted by rules and regulation of the organization.

Responsibility: Responsibility is the obligation of a subordinate to perform the assigned duty. The responsibility flows upwards. It includes all the physical and mental activities to be performed by the employee for a job. Delegation starts when the superior transfers some of his responsibility to the subordinates.

Accountability: It is the obligation on the part of the subordinates to perform the assigned duties as expected by the managers. For this purpose, accountability is created. Accountability means being answerable for the final results. Accountability can never be delegated.

The elements of delegation are as follows 

(i) Authority: It refers to the right of an individual to command his subordinates and to take action within the scope of his position. The concept of authority arises from the established scalar chain, which links the various job positions and levels of an organisation. It must be noted that authority is restricted by laws and the rules and regulations of the organisations. Authority flows downward. 

(ii) Responsibility: Responsibility is the obligation of a subordinate to properly perform the assigned duty. It arises from a superior-subordinate relationship because the subordinate is bound to perform the duty assigned to him by his superior. Responsibility flows upward. Organising 

(iii) Accountability: Accountability implies being answerable for the final outcome. Once authority has been delegated and responsibility accepted, one cannot deny accountability. It cannot be delegated and flows upwards i.e., a subordinate will be accountable to a superior for satisfactory performance of work.

Correct option is (a) Retention of decision-making authority

Organising involves following steps that need to be taken in series 

(i) Identification and Division of Work: Organising process begins with identifying and division of total work into small units. 

(ii) Departmentalisation: After dividing the work, related and similar jobs are grouped together and put under one department. 

(iii) Assignment of Duties: After departmentalisation, the work is assigned according to the ability of individuals. 

(iv) Establishing Reporting Relationship: Assigning duties is not enough. Each individual should also know, who he has to take orders and to whom he is accountable. Thus, reporting relationship helps in co-ordination among various departments.

Correct option is (a) Both (A) and (R) are true and (R) is the correct explanation of (A)

(The organising function begins with the division of total work into smaller units.)

Correct option is (b) Both (A) and (R) are true but (R) is not the correct explanation of A

(Clarity in working relationships enables proper execution of work.)

Organising is defined as a process that initiates implementation of plans by clarifying jobs, working relationships and effectively deploying resources for attainment of identified and desired results.

Delegation of authority popularly known as ‘delegation’ is an important part of the organising process. Its need is felt when due to excessive workload on a manager, he is unable to perform all the jobs independently. In this situation, he divides his work among the subordinates. But, just mere division of work does not guarantee success. For the successful work performance, authority should be given to the subordinates to take work-related decisions. Thus, division of work and assigning authority for the successful work performance is called delegation of authority.

Following are the salient characteristics of decentralisation:

i. It is an expanded version of delegation of authority.

ii. It increases the significance of the role of subordinates.

iii. It is a process which is applicable to the organisation as a whole.

Functional structure of organisation means an organisational structure which is formed by grouping jobs of similar nature functions and organising such functions into separate departments such as production, marketing, finance, etc.

Advantages:

(i) Specialization: A functional structure leads to occupational specialization since emphasis is placed on specific functions.

(ii) Efficiency: It helps in increasing managerial and operational efficiency and this result in increased profit.

(iii) Minimises costs: It leads to minimum duplication of effort which results in economies of scale and thus reduces cost.

(iv) Better control and co-ordination: It promotes control and coordination within a department because of similarity in the tasks being performed.

(v) Proper attention: It ensures that different functions get due attention.

(vi) Ease in training employees: In makes training of employees easier as the focus is only on a limited range of skills

Disadvantages or Limitations:

(i) Functional empires: A functional structure places less emphasis on overall organisation than the departmental objectives. Such practices may lead to functional empires and the importance of a particular function (or department) may be overemphasized.

(ii) Problems in co-ordination: Pursuing departmental interest at the cost of organisational interests can also hinder the interaction between two or more departments. It may lead to problems in co-ordination among different departments.

(iii) Conflict of interests: A conflict of interests may arise among departments when the interests of two or more departments are not compatible.

(iv) Inflexibility: It may lead to inflexibility as people with same skills and knowledge base may develop a narrow perspective and thus have difficulty in appreciating each others point of view.

Meaning of Functional Structure: It refers to the division of the whole enterprise according to the major activities performed by it.

Advantages of Functional 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.

Functional structure of organisation means an organisational structure which is formed by grouping jobs of similar nature functions and organising such functions into separate departments such as production, marketing, finance, etc.

Advantages:

(i) Specialization: A functional structure leads to occupational specialization since emphasis is placed on specific functions.

(ii) Efficiency: It helps in increasing managerial and operational efficiency and this result in increased profit.

(iii) Minimises costs: It leads to minimum duplication of effort which results in economies of scale and thus reduces cost.

(iv) Better control and co-ordination: It promotes control and coordination within a department because of similarity in the tasks being performed.

(v) Proper attention: It ensures that different functions get due attention.

(vi) Ease in training employees: In makes training of employees easier as the focus is only on a limited range of skills

Disadvantages or Limitations:

(i) Functional empires: A functional structure places less emphasis on overall organisation than the departmental objectives. Such practices may lead to functional empires and the importance of a particular function (or department) may be overemphasized.

(ii) Problems in co-ordination: Pursuing departmental interest at the cost of organisational interests can also hinder the interaction between two or more departments. It may lead to problems in co-ordination among different departments.

(iii) Conflict of interests: A conflict of interests may arise among departments when the interests of two or more departments are not compatible.

(iv) Inflexibility: It may lead to inflexibility as people with same skills and knowledge base may develop a narrow perspective and thus have difficulty in appreciating each others point of view.

The need for a framework is felt by an organisation whenever the size of its activities increases. In case of large sized organisation, it is difficult to coordinate all the activities. Hence, it becomes inevitable to think over the matter that the organisation can run smoothly and face the dynamic environment boldly. Such thinking gives rise to a framework, namely, the ‘organisation structure’. The organisation structure creates harmonious adjustment of various parts to accomplish desired goals.

Meaning: Functional structure refers to the division of whole organisation according to major functions to be performed by it.

Advantages of Functional 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 the coordination easier at department level.

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

iv. Minimal Duplication of Efforts: In this type of organisation unnecessary duplication of efforts is eliminated. For example, the function of finance is only carried out by the finance department. There is no need to establish two or more departments. It makes it possible to utilise the human and other resources effectively.

It refers to the organsiation structure which is designed by the management to accomplish a particular task.

Advantages:

i. It is easier to fix responsibility since mutual relationship are clearly defined.

ii. It avoids overlapping of efforts since there is no ambiguity regarding the role of each and every employee of the organisation.

Organisation is considered to be a machine of management. It is that machine in which no part can afford to be ill-fitting or non-functional. In other words, if the division of work is not done properly or posts are not created correctly, the whole system of management collapses.

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

Advantages:

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.

Limitations:

Following are the limitations of Informal Organisation:

i. It creates Rumours: All the persons in an informal organisation talk carelessly and sometimes a wrong thing is conveyed to the other person which may bring in horrible results.

ii. It resists Change: This organisation resists change and lays stress on adopting the old techniques.

It is about the importance of decentralisation.

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

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

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

ii. Fulfils 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.

It is right to say that the decentralisation is an extension of delegation of authority.

It can be understood with the help of following example:

Example: If CEO delegates some authority to a divisional manager then this is called delegation of authority. If divisional manager delegates his authority further to his subordinate this will be called decentralisation. If the same process is repeated for two divisions then expansion of decentralisation takes place. If this process is implemented on the organisation as a whole then decentralisation will be at its peak.

The purpose of delegation of authority is reduction of workload of an officer, while the purpose of decentralisation is expansion of authority in an organisation.

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

Advantages of Informal Organisation:

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

(ii) It fulfils the social needs of the members.

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

Disadvantages of Informal Organisation:

(i) It leads to spread rumours.

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

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

Difference between Formal and Informal Organisation: