Business Studies M.C.Q (1 Marks)

Organising may be defined as such process which is made by any business firm for the purpose of achieving its own goals or objectives in smooth way. It is the process of ensuring healthy relationship among the departments by the proper channel of communication, so that the employees of every department can give their 100% contribution in the accomplishment of desired goals.

Organising leads to proper assignment of jobs which ensures proper usage of materials, financial and human resources, which reduces confusion and wastage of resources.

Rumours are a result of informal organisation. They can have adverse effect on the working environment. It may result in arguments or conflicts among the people of the organisation. For example, a rumour about the boss may pop up during a communication among a group of employees, which may affect the superior-subordinate relationship.

Span of management means the number of subordinates that can be well-handled by a superior. Any organisational structure is based on its span of management.

For delegation to be effective it is necessary that responsibility is accompanied with authority. Responsibility refers to the obligation to complete a task which has been assigned by the superior. Complementary to this, authority refers to the power to give commands and directions to the subordinates. For successful delegation both authority and responsibility must go together. That is, if an individual is given the responsibility to carry out a task, he must also be given the necessary authority to carry it out.

Functional Organisation involves grouping of the functions of similar nature. Each group forms a separate department that report to one head. For example, departments may be divided on the basis of functions such as production, human resources, etc. that report to the managing director of the organisation.

Sometimes an organisation has more than one product line. Under such a scenario the organisation groups the activities on the basis of the product line. Such a grouping of activities on the basis of product line is known as divisional organisation. Each division further has its own sub-departments such as production, finance, etc.

In case of delegation of authority, ultimate accountability still lies with the superiors, therefore they are not completely releived of their responsibility. Thus, it is not an advantage or importance of delegation of authority.

Informal Organisation is not an element of delegation. Delegation refers to the transfer of authority to subordinates. Accountability, responsibility and authority are the major elements of delegation. On the other hand, informal organisation refers to the relationship which arises out of informal communication among the employees in an organisation. Such communication is purely informal in nature and does not involve any formal communication such as that in delegation.

Centralisation refers to the retention of decision making authority. Centralisation implies a situation where the decision making power is retained by the top level management. Under such a system, other levels of management do not have a right to intervene in policy making. The power and the authority, in such a system, remains concentrated in a few hands.

A tall structure of organisation is the one that has multiple levels of hierarchy. A tall structure of organisation has narrow span of management. That is, under such a structure a manager has charge of only a few subordinates.

Functional structure is adopted by large and diversified organisations where high degree of specialisation is required in functional activities.

Scalar Chain refers to a pre-defined, formal path of authority and communication in the order of highest to the lowest. Informal organisation do not follow a scalar chain as they arise out of informal relationship among the workers and managers. For example, it may arise from interaction which happens over lunch or an office party. Other structures such as formal organisation, divisional structure and functional structure follow a proper defined scalar chain.

The behaviour in informal organisation is not guided by any rules and has no set patterns. It prefers the current state of affair and the existing work routine. This leads to lenience in the work and results.

The formal organisation is a system of well-defined jobs, each bearing a definite measure of authority, responsibility and accountability. Such stringent rules and policies lead to delays in the process.

A network of social relationship that arise spontaneously due to interaction at work is called informal organisation. It emerges from social interaction and free flow of communication among the employees of an organisation. On the other hand, formal organisation refers to a formal system based on superior-subordinate relationship. Whereas, delegation and decentralisation are concerned with the transfer of authority and responsibility to the subordinates.