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Because it acts as a linear structure that co-ordinates goals of business, departmental goals and goals of employees.

• According to Louis Allen, “Delegation of authority means assignment of responsibility and power to the subordinates by creating accountability for effective performance.”
• He also says that “Delegation of power is such kind of process in which the administrator gives a part of the powers to his helpers along with duties, and the helpers, with the help of others, for the purpose of work performance, accepts such powers consciously.”

• The system of giving power to the other person for doing a particular task is called delegation of power.
• For example, marketing managers are given power to incur necessary expenditure in their work area, appointment of employees, take disciplinary actions against the employees, etc.

• In business terminology, ‘power’ refers to giving orders and also to see to it that the orders are followed.
• When the size of the organization becomes large, the upper level administrators assign some work to their subordinates.
• These subordinates have to see that the orders are followed properly. For this the subordinates are given some powers.
• This vesting of powers is called delegation of power.
• Thus, the system of giving power to the other person for doing a particular task is called delegation of power.
• According to Louis Allen, “Delegation of authority means assignment of responsibility and power to the subordinates by creating accountability for effective performance.” He also says that “Delegation of power is such kind of process in which the administrator gives a part of the powers to his helpers along with duties, and the helpers, with the help of others, for the purpose of work performance, accepts such powers consciously.”
• It should be noted that although the subordinates are given powers and they are responsible to get the work done but the final completion of the work and its responsibility rests with the upper level administrator only and he cannot free himself from that.
• Delegation of authority can be for various purposes. For example, Marketing Managers are given power to incur necessary expenditure in their work area, the appointment of employees, to take disciplinary actions against the employees, etc.

Accountability flows from lower level management to upper level management in the organization

Correct option is (C) Accountability

Correct option is (A) Louis Allen

Correct option is (B) Centralization

• During delegation of work, the person who has been delegated the power and work is accountable for this work to the higher authorities.
• He needs to provide proper explanation and follow reporting process to the top level management.
• The delegated person may be having the powers to get the work done by others but finally the responsibility of getting the work done rests with the upper level administrators only.
• This means if the delegated work is not done as planned, the person who has delegated cannot put the blame on the shoulder of the person to whom the work was delegated. Hence, a task may be delegated but not the accountability.

Correct option is (A) Accountability

• Decentralization cannot be adopted in very small units, especially because the business secrets cannot be maintained.
• Sometimes when common policies are not implemented or if co-ordination is not maintained properly, decentralization becomes unsuccessful.

Decentralization:  The delegation of power from upper to lower level in orderly manner is known as decentralization of power.

• According to Henri Fayol, “To assign powers to the superiors, to enable distribution of work, and to include in decision making process is called decentralization.”
• Whether to opt for centralization or decentralization largely depends of the size of the unit and the approach of the administrators.
• Small sized organization can have centralized powers but generally large sized organizations should have decentralized form of management for successful organizing.
• Under decentralization not all but some major powers such as executive powers are given by the upper level administrators to the lower level.

The delegation of power from upper to lower level in orderly manner is known as decentralization of power.

To assign powers to the superiors, to enable distribution of work, and to include in decision making process is called decentralization.

1. Hierarchy,
2. Non-scientifically taken decisions,
3. Non-cooperation,
4. Lack of specialization, and more work load, etc.

Chief Executive Officer has the supreme power in functional organization

In organizational units where more variety is seen in work.

Keeping in view limitations of linear organization, functional organization came into existence. The organization where in experts with specialized knowledge are given separate responsibilities of respective work of respective department, is called functional organization.

Functional organization gives special importance to work distribution and specialization. The assignment of power and responsibilities are made on the basis of functions and not departments; in this type of organization. For each functions different experts are appointed. These experts are not only advisors but also administrative heads for their respective functions. They are fully responsible for the work assigned to them.

In functional organization (work based organization), the supreme power rests with the Chief Executive Officer. The unit is divided into two parts. For each department their list of functions are determined, their functional departments are decided and then various officers are assigned with respective authority and responsibility.

As per Chester I. Bernard, “The activity conducted by the co-operation of two or more people and their co-ordination is called Organizing.”
According to Louie Allen, “Organizing is the process of identifying and classifying the work to be performed, defining and delegating responsibility and authority, and establishing relationship for the purpose of enabling people to work most effectively together in accomplishing objectives.”

Basically the concept of organizing is linked to group. Where more than one person work together, the structure necessary to accomplish the work effectively is called organizing and it is also termed as an arrangement.

Correct option is (C) Peter F. Drucker

On the basis of departments

Correct option is (C) The task to determine departmental positions and abilities

Correct option is (B) Linear structure

Functional organization is an organizational structure where the structure is built on the basis of distribution of work.

Correct option is (C) Bottom level management

Correct option is (D) Policy based decisions

Correct option is (D) Departmental organization

Linear organization gives more importance to department than work which is its biggest limitation.

Correct option is (B) Administrators

Correct option is (A) Matrix organization

Characteristics of Formal Organization:

• Formal Structure,
• Lacking Flexibility
• Delegation of Power from Upper Level to Lower Level
• Large Size
• Particular Relations and
• Communication.

In the formal organizational structure, individuals are assigned various job positions. While working at those job positions, the individuals interact with each other and develop some social and friendly groups in the organization i.e. they form informal organizational structure.

• The existence of informal structure depends upon the formal structure because people working at different job positions interact with each other to form informal structure and the job positions are created in formal structure.
•  So, if there is no formal structure, there will be no job position, there will be no people working at job positions and there will be no informal structure.
• Although formal organization goes as per procedures, divisions and work allocations, the informal organization makes the execution more effective and harmonious and serves as a complement of formal organization.

• In the formal organizational structure individuals are assigned various job positions. While working at those job positions, the individuals interact with each other and develop some social and friendly groups in the organization. This network of social and friendly groups forms another structure in the organization which is called informal organizational structure.
• The members while doing the formal work also interact at social level, bring their own values and assumptions during work discussion.
• The members of informal organization develop friendship, alliances, trusted sources of information and share preferences on how work should be done.
• This makes achieving the goals easily and in a harmonious manner.
• Owing to several benefits the organization gets, it accepts informal organization.

To achieve the predefined goals, the formal structure of relationship among persons and work is establishes which is known as formal organization.

Correct option is (C) Both (A) and (B)

1. Formal organization,
2. Lacking flexibility,
3. Delegation of power from upper to lower level,
4. Large size,
5. Particular relations, and
6. Communication.

Correct option is (D) Based on human relations

• In business terminology, ‘power’ refers to giving orders and also to see to it that the orders are followed.
• Person having power has right to make decisions and execute tasks. This leads to smooth functioning of management and administration.
• However, when the size of the organization becomes large, it becomes difficult .for the upper level administrators to conduct all work on their own and execute all their powers on own. Hence, they assign some work to their assistants.
• By delegating power to the lower level, the upper level administrators get free from such works that can be performed by junior level staff. This helps the upper level people to focus upon their core tasks i.e. policy making.
• This increases efficiency of the management and organizing.

Matrix organization is a modern type of organization. It has two different types of structure. One is the simple kind of structure which forms part of decision making. The second one is for the solution of technical questions/problems. It is called project structure. The combination of both these result into Matrix Organization.

Matrix structure can result in internal complexity. Some employees may become confused as to who is their direct supervisor. For example, an employee may receive different directions concerning the same thing from supervisors in different departments.

• Miscommunication and ineffective managing can result in employee dissatisfaction and low morale.
• Prolonged issues may cause the organization to experience high employee turnover.
• Matrix organizational structure is expensive to maintain.
• A company’s overhead cost typically increases because of the need for double management.

• Matrix organization is a modern form of organization, which has two different types of structures.
  One is the functional structure which forms the part of decision making. The second is the technical problems solution based structure which is called project structure. The combination of both these structures results in matrix organization.
• Moreover, in matrix organization, the organization gets the benefits of specialized work as well as that of project management.
• Hence, matrix organization is multi-faced structure.

There is combination found of work based and project based organization. In this organization each project manager is assigned with different type of work responsibilities. For total projects, each project-wise project manager is appointed. Their responsibility is to’ accomplish project timely and successfully. The necessary experts staff is obtained from various sections. They are divided into different teams. On completion of the project they are sent back to their respective sections.

Matrix Organization:

• The organizational structure in which people with similar skills are pooled for work assignments, resulting in more than one manager is called a matrix organization.
• Matrix organization is a combination of work based (functional organization) and project based organization.
• Matrix management is the practice of managing individuals with more than one reporting line i.e. in a matrix organization structure.
• For example, all engineers may be in one engineering department and report to an engineering manager (i.e. part of functional organization structure), but these same engineers may be assigned to different projects and report to a different engineering manager or a project manager while working on that project. Therefore, each engineer may have to work under several managers at same point of time.

Correct option is (A) Project structure

Correct option is (A) Subordinate

Correct option is (C) Henri Fayol

Correct option is (B) Organizing

Under organizing, the authority and responsibility of each individual is decided. It is also decided who will report to whom.

• Divisional heads, sub-divisional heads and skill based heads are finalized and then all the heads are given power and responsibilities so that they can perform their work well.
• In addition to this, the post of each person is also clarified. His role, authority and responsibility in the organization is also decided
• Over and above all these, the power and responsibilities are divided and balanced among employees of various posts.
• Doing so gives every employee a clear picture of his roles and the contribution – he has to make to achieve business goals. Moreover, this also removes any confusion regarding every individual’s role in the organization.
• Hence, distribution of authority and responsibility is the base of an organization.