llGANISiNq / 105

....--
- (NCERT Case Studies)
Neha runs a factory wherein she manufactures shoes. The business has been
doing well and she inten~s to expand by diversifying into leather bags)as well as we ste~
fonnal wear th ereby making _her company a complete provider of corporate wear. This will
enable her to market her husmess unit as the one stop for working women.
Which type of structure would you recommend for her expanded organisation and w,hY'?

~n•f:I Neha should adopt a Divisional Structure for her expanded organisation.
Since she is P_lanning to ~iversify into unrelated products 1ike clothing along with bags and
aLc;o wants to retam her old line of shoes, she would need to create separate divisions for these
varied products.
By adopting a Divisi011.1l StructurL she will be able to:
(i' Achieve products specialisation.
(ii Facilitates fixation of responsibility as divisional heads are accountable for profits,
reYenues and costs related to their departments.
(iii) Promotes flexibility, initiative and faster decision making as each division is an
autonomo us unit.
(iv) Facilitates expansion and growth as new divisions can be added without interrupti ng
the existing operation s.

CAsrla 2: The productio n manager asked the foreman to achieve a target productio n of 200
I

units per day, but he doesn't give him the authority to requisition tools and materials from
the stores departme nt. Can the productio n manager blame the foreman if he is not able to
achieve the desired target? Give reasons.

Jffinn(.j.li,No, the foreman can't be blamed as the production manager did not follow the
principle of authority and responsibility.
The foreman was made responsible to achieve a target production but wasn't grated the
authority to take the tools and equipmen ts needed to achieve it. Thus he was unable to complete
the assigned task.

CAsdET } : A manager enhances the productio n target from SO? units to 700 uni_ts per month
but the authority to draw raw material was not gi~en by h1~. The pro~uctio ~ ~anager
could not achieve the revised productio n target. Who ts responsible and which pnncrple was
violated?
I,::, • • · th rinciple of authority and responsib ility is violated and the
in..!anager
"Dl'lfP
In this s1tuatithon e pt fr m 500 units to 700 units is responsible because he did it
who enhanced e targe o .
W'th . . . t t ls
1 out giving the authonty to ge 00 and equipmen ts to the production manager.
. ed ffi . Delhi manufacturing unit at Gurgaon and
· A company has its register O ce m ' manufactures th~ consumer
arketing and sales departme_nt ~t Faridabad . ~o:~:it:; cic,pt to achieve its target?
roducts. Which type of organisational structure, .
 106 ' ,\Ill )\ 1\11II', I \ I - l\tl\iNt '' ~lllllh' (XII)
Jffi@(-#1 11w \'lm,pmw :;h,H1ht ndopt nh jqirm,11 Stwr:lt11<' 119 llw opl' t',tli on'l ,if ~lw l'ornpa, y
are gN,~t..lp hil :1lh w,d l' spl't',ld ,md thus 1
it "p11 ld llCl'd lt1 1w,::. on I onlm l .,nd dt'<'l'
aut h{,n h h) ffH\l \,'lJ;l 'T~ we,, king ,,t dilf -IH> n n,,,k in
l'h'n l ln1·,1tinn ~. F<u thi s pmp rn4t' •' Div 1 1
,, ould h• hrth.-r suih•d ~ o11,,1 1.1lr1H.ltir~

OI~
Thc- <.'nmpmn !-hould ndc,pt ., Fun( til,n,11
~lrlll ll111 • us it ,, rnw prnd\H I rnn 11_1 ,lllY 11 1
to h mdk~ it~ opvt\ltfons thn,ugh n lnnc • • d will bP nhle
lit1nnl ~lt uc1t1u• with dil ll·n•nt func tion
d m.mn~e s bt•m g perforrned
.... d nt diffo 1, 'nt lnm thlll~.

A C\)mp,m ), wh ich m,mut.,c tmx• s ., pop1

1l,1r br,md of toys, h,1s been enjoying
gqod mar ket repu tntil,n. 1t h.1~ ,1 lunclh1n
,,l lll)~,mi,;,1tion,1l stru cture with separntc
for Pro duction., Mnr k1.::' tin~ Fin,mn• l lum,m Rl'S( dcpcUtments
Hll'l' .l'S nnd R<'Sctirc h ,ind Dev
to use it::- bra nd n.mw ,md .,1':.l) h) 1.:,1s elop ment. Lately
h nn to nL'W huH11wi;s opp ortu niti es it
diYersif y in to man ufac tun.' ,.1t m'w r,ltl~ is thinking to
l' of l'kctronic toys for which a new mnr
kct is emerging.
Pre par e a rer ort rega rdin g org anis atio
n stru ctur e giving concrete reasons with
benefin- the comp.my will d~rivc from thr regard to
steps il should t.1kt• .
Jj @l.fal The compam· should adopt Division,11 Structun• as the needs and requ
man ufa ctur ing and selling the new rang irements of
e of electronic toys would need separat
to ~ crea ted from the ones that e departments
are already operational in the current scen
ario .
Electroruc toys wou ld need separate inpu
ts in terms of raw material and machine
sep ara te pur cha se dep artm ent should ry, thus a
be created to do this job. The produc
inv olve d in the new range of toys will tion processes
be quite different from the existing pro
thus ther e wou ld be a need for a separat duc tion methods
e production department for electronic
toys.
The ben ents rr1P com pan v will deri ve from
the step s of ado ptin g a D1v1s1onal stru
cture are
(i) Pro duc ts specialisation helps
in development of varied skills.
( i i) It help s in the fixation of resp
onsibility as divisional heads are accounta
rev enu es and costs related to their dep ble for profits,
artments.
(iii) It pro mo tes flexibility, initiativ
e and faster decision making as each
aut ono mo us unit. division is an
(iv) It facilitates expansion and gro
wth as new divisions can be add ed with
the existing operations. out interrupting

A com pan y manufacturing sewing machine

s set up in 1945 by the British promoters
follows formal organisation culture in totality.
It is
facing lot of problems in delays in decision
making. As the resu lt it is not able to ada -
pt to changing business environment.
be e is also not mo tiva ted since they cannot The wor k
channels, which involve redtape. Employee turnven t their grievances except through form
ove r is high. Its market share is also decl
al
Aue to changed circumstances and business env ining
ironment.
(a) You are to advise the com pan y
wit h regard to change it sho uld bring
organisation stru ctu re to overcome the pro about in its
blems faced by it.
(I,) Give reasons in term s of benefits it
will derive from the changes suggested
by you.
(c) In which sectors can the com pan
y diversify keeping in min d the declini
ng market for
the product the com pan y is manufacturing?
 i ,

ORGANisiNG / 107

~ lutioN:
'-"

(f ) The c_om~any needs to change from formal organisation structure to informal

orgarusation structure. The management should encourage employees to interact and
socialise with each other.
(b) A'"'~r..,-r\g 111 torm.~l onr,misatio11 c;;.tr1 1cturc will hPlp the cmnpanv in followi-~ ... ,;iv,·
( Information spreads faster as prescribed lines of communication are not followed.
(ii) It gives
th
em a sense of belongingness in the organisation and give more satisfied
workforce.
(iii) It helps in achievement of organisational objectives in better manner.
(c\ The . compan~ can div_ersify its activities by producing electronic and computerised
sewing machines and mter lock machines to ensure optimum utilisation of resources.

A company X limited manufacturing cosmetics, which has enjoyed a pre-

eminent position in business, has grown in size. Its business was very good till 1991. But after
that, new liberalised environment has seen entry of many MNC's in the sector. With the
result the market share of X limited has declined. The company had followed a very
centralised business model with directors and divisional heads making even minor decisions.
Before 1991 this business model had served the company very well as consumers had no
choice. But now the company is under pressure to reform.
(a• What organisation structure changes should the company bring about in order to
retain its market share?
(b) How will the changes suggested by you help the firm? Keep in mind that the sector in
which the company is FMCG.

lffi@i-#1
(a) The company should adopt a decentralised _structure. so that there is free flow of
inf ti between various people involved m the business. Managers who are at the
orma on . . Thi ill d d th
scene of action should have the authority to take dec1s1ons ... s w spee e up e
· · m aking process and help the business fight competition better. The company
dec1S1on th b .
should make chan es in the product range that it offers to com_pete e ran?e e~g
g •
offered by its competitors. The comp any should work on the quality of cosmetics being
. hn.
·th world class brands. Aggressive marketing tee 1ques
offered as it needs to compete wi h ohon strategies being adopted by the
should be used by the company to beat t e prom
competitors.
. due to decPnlralisn tion are:
(b) The benefits company may enJOY · . . It ill build the confidence of
. . . . gst subordinates. w ..
1. Develops in1hahve amon . fr dom to take their own deos1ons.
e they are given ee
subordinates b ecaus f rial decisions does not lie in
. . . The burden o manage .
2. Quick and better DeC1s1ons. di .d d among various persons which helps
the hartds of few individuals but ~e~ v1 e
them to take better and quick dec1S1ons. d· The daily managerial works
ess workloa • .
3. Relieves the top executive~ from exhi,·ch leaves enough time with the supenors
. th ubordmates w
are assigned to e s . d ing new strategies.
which they can utilize m eve1op
 108 I ABD\ Bull\ Eve - Bt.'Si-..m SwdiB (XII)

Section - IMiUiil ii WU Nii fldffiliilirtff. . . . . . . . .

1

CMdE1 1: Alliance Ltd. is engaged in manufacturing plastic buckets. The objective of the
company i~ tl> manufacture 100 buckets a day. To achieve this, the eff~rts 0 ~ a~ d ~
are coordinated and interlinked and authority-responsibility relationship 15 established
.m10ng v,1rious iob positions. There is clarity on how is to report to whom.
:\,m\e the function of management discuss above. (1 Mark) [CBS£, DELHI z -

Jifl@(,#$1Organising.
-------------:-::---:---:---
To make the sports day of the school successful the Headmaster of the ~
divided all the actiYities into task groups each dealing with a specific area like holding
events, arrangement of medals, refreshments etc. Each group was placed under the ~~era:}
supervision of a senior teacher. The physical education teacher was made respmb-ible for
holding different events, the home science teacher for refreshments and the Maths ~
for medals.
Identify the function of management performed by the Headmaster in doing so.
\1 Mark) [CBSE, OD & DELHI COMPIT. 2 ,._

Jtfl@M}I Organising.
CMElET J: 'Himalaya Ltd.', is engaged in manufacturing of washing machines. The tuget ci
I

the organisation is to manufacture 500 washing machines in a day. There is an occupa.tiooa!

specialisation in the organisation which promotes efficiency of employees. There is oo
duplication of efforts in such type of organisation structure.
Identify the type of organisation structure described above. (1 Mark) [CBSE, OD 2ft.

Jjnnt.fri Functional Structure.

CAsEln 4 : An Indian information technology company presently employing 10,000 people,

desires to expand its business in manufacturing, trading etc. It wants to become a gkbal
company. To achieve its objectives it has started shifting from a centralised to a decentralised
management system.
Identify the management function being performed by the company to become a decentralised
company. (1 Mark) {CBSE, DLUll COMPIT. 2

li®t.fri Organising.

CAsElET ~: Ajanta Foods Ltd. is engaged in the trading of 'Noodles'. It has its registered offd
.in IColkata, manufacturing unit in Solan and marketing department at Delhi.
Which type of organisational structure the company should adopt to achieve its target?
(1 Mark) [CBSE, OD COMP'ff. iol6l

Functional Structure.
 Explain when and wh tl . . • hich
. Y 1e need is felt for having a framework, within w
and operating tasks are p er formed to accomplish the desired goals.
lnmework' also . (4 Marks) [CHS£, DCLJII 2010
/

The framework within w hich managerial and operating tasks are performe d t0
the desired goals of an O rgamsahon
· ·
1•s known as its "Organising Structure " · It
to the network of positions roles respons1'b'l'
1 ,
· ·
1 1ty and authority in an orgarusation.
An
tional structure defines the fra mework w1·th·m which • various functions are performed
~ - - ~ and employees.
1be need for an organisational structure arises:
'i) When the activities performed b Y an organisation · scale.
· · are very large m

{ii) When_an ~rganisation focuses on growth and expansion, it needs to pay attention to its
orgarusational structure.
~ ~ o~ganisation grows and its activities require a high level of coordination, a
organisational structure to ensure its smooth functioning becomes essential.

It helps a manager to extend his area of operations as without it, his activities
1,e restricted to only what he himself cah do.
the activity referred to, in the above statement and state its elements.
(4 Marks) [CBSE, DELHI COMPIT. 2015]

!10~: The activity highlighted in the case is Delegation of Authority.

W Authority: Authority refers to the right of an individual to command his subordinates
and to take action within the scope of his position. It flows from top to bottom.
Responsibility: Responsibility refers to the obligation of a subordinate to properly
perform the assigned duty. It flows upwards.
Accountability: Accountability refers to answerability for the outcome of the assigned
task. It flows upwards.
', I 8: Sunir Gupta started a telecommunication company, 'Donira Ltd.' to manufacture
mobile phones for the Indian rural market with 15 employees. The company did
a its initial years. As the product was good and marketed well, the demand of its
"'Went up. To increase production the company decided to recruit additional
Samir Gupta, who was earlier taking all decisions for the subordinates are
capable and resourceful and can assume responsibility for effective implementation
• • · This paid off and the company was not only able to increase its production
eel its product range.
" concept used by Samir Gupta through which he was able to steer his
to greater heights.
· any three points of importance of this concept.
(4 Marks) [CBSE, DELHI & OD 2015]
 110 I ARD's Rull's [yr - fl~iNrc;c; SrucliE'> (XII)

lffitttiu#M
(11) Dccentrnlisnthm.
(I,) lhL In1JHHtmcL' of dl'tLnl1L1hi,,1l1011.11e
U> Dt•vPlops initiative among suhordirrnfer.,: Subordinates are given complete freed
to do tlwir Job. They learn to depend on their own judgment. They are constan°;
drallenged and develop solutions as per the need . Y
(r,) DcvclopN managerial talent for the future: Handling assignments by th
subordinates allow them to prove thei~ abiliti~s. This create~ a reservoir of ab~
manage_rs. They can be considered to fill up higher level positions at the time of
promotions.
(ui) Quick dccbion m.1ki 1• Decisions are taken at all the levels in an organisati
and at a place which is nearest to the point of actions. There is no requirement (
approval from the higher authorities. Thus, the decision making is much faster.or

A company has been registered under the Companies Act with an authorised
share capital of? 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 Conswner Goods (FMCG).
(a) Suggest with the help of a diagram a suitable organisation structure for the company.
(l,) State any three advantages of this organisation structure.
(4 Marks) [CBSE, DELHI COMPIT. 2 r

SolurioN: j

(a) Functional Structure:

Managing Director

Production Manager Marketing Manager

(Rajasthan) (Bhopal)

Foreman 1 Foreman 2 Foreman 3

J
Executive 1
l
Executive 2
i
Executive 3

(b) The advantages of l•unctjonal Structurl' arC':

(i) Coo~di_nation is_ establis~c~: All the persons working within a department~
specialists of therr respective Jobs. It makes the co-ordination easier at departinett
level.
(ii) Helps in increasing managerial effici<•nry: Managers of one departtne~
performing same type of function again and again which makes them spect
and improves their efficiency. .
(iii) Minimises cost: It leads to minimum duplication of effort which results in econo~
of scale and thus lowers cost.
 . r-~~====;-- ----
OR(iANi\iNG / 111
l L
[Da 'Steelo Ltd.' decided t0 . .
area of Odisha where very less . ;el-up its steel manufacturing factory in the backward
-velcomed this effort of 'Steelo Ltd!; opportunities were available. People of that area
\ro,
F
ide many other facilities like · ho attract people to work in its factory it also decided to
sc ool hos 't 1
'Steelo Ltd.' started earning hu e . ' pt a ' market etc. in the factory premises.
'A 1 ' .
anager s am to investigate th g profits. Another . company asked its prod
competing .
- uction
111 e reasons of ea . h . ' '
, Aslam foWld that in both th . mmg uge profits by Steelo Ltd.
. .. e companies th
\'arious activities to achieve orgaiu· t· ere was systematic co-ordination among the
sa 10nal goal E
and accountable to whom. The onl diff s. ·very employee knew who was responsible
Y erence was that · hi . . . .
took pace
1 onl y th rough the scalar h . m s orgarusation commurucation
communication in all the direction c am whereas 'Steelo Ltd.' was allowing flow of
8 as per the req · hi
information as well as quick feedba k wrement w ch lead to faster spread of
C .
,,1, Identify the type of organi· t· .
communication in all th d' sa. 10n which p ermi·t s 'S tee 1o Ltd.' they flow of
e rrections.
a,, State another advantage of the typ e Of organisation identified in (a) above.
( c) .
State any two values which 'Steelo Ltd ·, wanted to commurucate to the society.
(4 Marks) [CBSE, DELHI & OD 2016)

lffi®MJM
(a) Informal organisation.
a,) The advantage of informal organisation are:
(i) It leads t~ fa~ter spread of information as well as quick feedback since fixed lines of
commurucation are not followed.
(i11 It helps to fulfil the social needs of members.
(c) The values communicated to the society are:
( •J Social welfare.
(iiJ Employment opportunity.
(iii) Promotion of backward area.
(iv) Optimum utilisation of natural resources.

iC,\SEl£T 11: , 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 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.
(a) 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.
(l,) State any two limitations of this framework.
(4 Marks) [CBSE, SAMPLE PAPER 2016)
 112 / ABD's Bull's EyE - BusiNESS ::,1uu1t.:> \''''.1

•- - •#1
k+.inftf d i " to fo ll owing reai;ons:
(n) Di, i~ional ~tructurc ,.., ,1dnptc L m: . d kill . . .
. . . h l . . ti ~ development of vane s s m a divisio
(i) Product Spc-nc1hsatwn ~ r~.
111
_,c , . -· . llal
he,1'i and this prepares him tor higher pos1t10ns.
fts as revenues and costs related
ivi ~... i(,n,11 hNdS arc nccount,1b 1.c for pro
·d ·r ' d~, nd ass1gne
. d tot h em. to
(11 ) D
difkrent departments can be easily • ent1 te a
<Id l lw luntt,1twn ... ('t dl\ i~ion,11 ~h ucture arc:
•-f r · · '- with reference to allocation of funds
( L-l,nflkt nhl\' ,Ubl:" anwng d1t crr•nt l iv1s10n~ .
J • • -· • tJ1 Jre may be a duplication of activities acr056
(11I It mav lead to incre,1~c m Cl'Sts ~mu.~ 1.: '

prodw.:ts
Aradh,- -. - a-nd G.mdharv are heads of two different department in 'Yum;-,
C1tsdn 12: 111 1
. , Thev are effkient nta.n.igers and are able to motivate the employee of their respective
ll!Dartim;nt tl"' impnin" rerformance. However, their drive to excel in their own sphere of
·1y instead of gi\"in~ emphasis on objective of the enterprise had hindered the interaction
lll!l1W!En the depdrtme~ts that Aradhana and Gandharv are heading. Of then there are
-!r-Caeoartrnental conflicts and they have become incompatible. This has proved to be
llk!mfli11 in the fulfillment of the organisational objective. The situation has deteriorated to
an extent that the CEO of 'Yumco Ltd.' has hired a consultant Rashmi to resolve the
_.!Jileln. After studying the situation closely, Rashmi found that the problem arisen due to
111em·w·ty and a narrow perspective on the part of both Aradhana and Gandharv. She is of
ftlM' that this situation is a result of the type of organisational structure 'Yumco Ltd.' has

the above information identify the organisational structure adopted by 'Yumco' and
my three advantage of the structure so identified. (4 Marks) [CBSE, OD 2015

'The organisational structure adopted by Yumco Ltd. is Functional Organisatior..1

1he ad, antages of functio::1a1 structure are:

(i) It promotes control and coordination within a department because of similaritv in the
tasks being performed. .,
I helps in increasing managerial and operational efficiency and this results in increased
profit. .
· It l'Mkes training of employees easier as the focus is only on a limited range of skills-
r,,1 ! action among people at work gives rise to a network of social relationshi.P5
This relationship emerges when people interact beyond their officiallY
Wbest-people ha_v~ freque~t contacts they cannot be forced into a rigid fonn,l
"I.IIIJll'bNIM•d on their mteraction, and friendship they tend to form groups which
18..._.. of interest.
1iofwtlps mentioned in the above lines and state its any tour
(5 Marks) [CBSE, DELHI COh1PTf, 20
161
 ORGANi~iNG / 113

' •ghtc d in abov e case .

. h 1ghh
Informa l orga nisation /rcl"" ti·ons a rc
TIW (.h,1 ractl 'ristk ~ of ml o m1,1 I o rg,llli'-1,l l ion
i1 r t•:

') It originates from w ithin the fo rmnl '

()rg , 1ntS,l
• t, ,
1011
(t
cr,1 tcly created by the mt1nngcmcnt.
(ii> It emerges sp onta neou sly and is not delih
. ) The stan dard s of behaviou r evolve frorn ,..,<Yr< up norm s.
)
(rll bers.
· . t' d
(r, ) In def1cndent chan nels of commu mc,1 mn an• cvel opcd by grou p mem
cd It has no definite struc tu re or form .

for providing cyber secu rity

· ~a n Cha dha ~tarted 'Bull s Eye' n com p,my
detect and resp ond to cybe r ilttac.ks and
st11utions to businesses. Its ObJ£> ctivc is to prevent,
an expe rt in cybe r
1 protect critical data
: He was a hard working softwt1rc <'ngincer and
ds as he was not only a pers on of integrity
security. His reputation grew by leaps and boun
since rity. ThE.• business started grow ing day
but also did his wor k with utm ost honesty and
a big project by the Ministry of Defen~e.
by day. He _was delighte~ whe n he was offered

I While working on the pro1ect, he found that the

to handle all the wor k by himself. He decided to
a close liaison wi~ a local engineering college.
Vrinda were appo inte d to wor k for the new proje
volume of work mad e it impractical for him
expand the team . The company main tain ed
During a campus placement, Ishan and
ct.

IHe found the new emp loye es capable, enthusia

thus, able to focus on objectives and with the help
completed on time. Not only this Ama n Cha
operations. On the othe r han d Isha n and Vrin
stic and trustworthy. Aman Cha dha was
of Ishan and Vrinda, the project was
dha was also able to exte nd his area of
da also got opportunities to develop and
exercise initiative .
by Ama n Chadha in the above case
(a/ Identify and briefly expl ain the concept used
which help ed him in focusing on objectives.
(b) Also, state any four poin ts of imp orta
nce of the concept identified in (a) above.
(6 Marks) [CBS£, DELHI 2017]

li!1@M}I
ority from superior to subo rdin ate,
(a) Delegation: Dele gati on is the tran sfer of auth
accountability for perf orm ance whic h help s a
entrustment of resp onsi bilit y and crea tion of
manager to extend his area of oper ation s.
(b) Imp orta nce of dele gati on of auth ority
:
(i) Effective Management: It help s in
effective man agem ent as the man agers get
mor e time to conc entr ate on imp ortn nt matters.
(ii) Effective Dev elop men t: It help s in
deve lopm ent of employees as the employees
get mor e opp ortu nitie s to utilize their talent.
· n o f Emp l oyees: It help s to mot ivat e emp
loyees as the employees feel
.. ') M ohv
(m · atio
nnce further.
enco urag ed and try to imp rove thei r perf orm
(iv) Facilitation of Growth : It facilitate
s grow th by prov idin g a read y workforce to
take up lead ing posi tion s in new vent ures .
 114 A.BO\ Bd \\ [yr - Bu~iNlSS S10dil'i (XII)

lfflU iil!®f U li 'i ftnbftti\M,

1
1U5E1tt 'I : The
~\anager of Ind ian Plastic ltd . believ
es that in ord er to success
the oba -nv es of an organis--.1tion, all
necessary acti\ ities are identified and
&-e the n put tog eth er in the similar .
sam e dep artm ent . In this wa y pro duc
resoun.~ finance and adm inis trat h-e tion , marketingac:tiv·11ft_
, h 1--q
dep artm ent s are created.
On the bas is of the gi\ en info rma tion
utt\ati
abo ut the ma nag er of Ind ian Plastic
ro ow1.i,g question: Ltd., answer
Identi.fr and e.,"Plain the concept of
&it
~ . . ma nag em ent und er which similar
1..Uet:ULei° anu d epart:ment activities ar
s are setu p. e P\lt
(3 Mar
lc.'....'I ••. . .. - ,..., l
-JU lUII Oft. De p rtm
I

ent a\i, atio n: De par tme nta lisa tion refe

SUI\l:;;.f or rela ted jo~ s :ato larg
rs to com bin ing or groupin ---....
er uni ts called dep artm ent s, divisions
be gro.aped. a..'"\ the bas is of functions or sections. Similar j~ the
pro duc ts, cus tom ers and territories etc.
is don e tu achi.2,~e coordination and Departmentalisa:
to facilitate uni ty of efforts.
llilil_._. Akshay has been appointed as a manager in Zoom Car
, a com pan y giving cars on
Bu t he doe s not kno w wh o he has
to tak e ord ers fro m and to wh om he
RpOrring rela tion shi p has not bee n esta is accountable.
blished in the company.
the bas is oi the giYen info rma tion abo ut
in Zoo m Car, ans we r the following
question:
ldenti...'y the ste p of the process of a fun
ction of ma nag em ent highlighted in
case. the abm-e
Slate the t\vo ste ps wh ich are per for me
d imm edi ate ly before this step. (3 :Marks

1h e step of the pro ces s of Org ani

sin g hig hlig hte d in the above case
1epotting relationships. is establishing
The teps \, hic h are per tor me d bef ore
this step are:
1 Ide ntif ica tion and div isio
n of wo rk.
u De par tm ent alisation.

....., has dec ide d tha t wh ene ver an em plo yee attains a particular age, he will
wu
~ by this pol icy of the com ·es
pany, sev era l peo ple of other comparo
y. Later, the y fou nd tha t in this com pan y com
mu nic atio n w as ~!
I,. :.I I · ed relations. It wa s not pos sib le for
any one to commUIU

gwen inf orm atio n about MM Ltd., answer the following que
stio n:
of org ani sat ion hig hlig hte d in the abo ve
case.
t:lildlalM.. •.,•• of the type of org ani sat ion hig
hlig hte d in the above ca~- Mat1'Sl

ore:am•sation-
 0RqANiSiNG / 115

fhC IJI. 111·tations of formal organi'°'cllion \fl''

l •

(i) t 1ck of initiativt"'. The cmploycl's have to do what they are told to do and they
ha\ e no opportunity of thinking.
(ii> unut('(~ in s~o1w: ll is difficult to understand all human relationships in an
cnterprtSL' as 1t places more emphasis on structure and work.

1·11t:, en1plon~es
.-
of Manik Ltd · , a ft ·
so ware company, have formed a dramatic
. their recreation.
ur wr
~ I1 ~
tJatni:' t ~
tvpe of organisation so formed and state any two features of this type of
-
organ~l·,atwn. (3 Marks)

- - Informal organisation.
Thr fcahirc~ of lnform,11 or\~,mis.ition ,in~·
(I l It originates within the formal organisation as a result of personal interaction among
employees.
ii) It has no written rules and procedures.
~ The General Manager of Bookmark Ltd. has decided to start a new branch in
Europe as apart of its expansion programme. The company has recognised the amount of
work to be done in number of hours. The company has found out that it will take 40000
hoW'S of man work and has subsequently divided the number of hours for different operations.
finally, the responsibility of the predetermined quantum of work was given to different
individuals according to their capabilities.
On the basis of the given information about Bookmark Ltd., answer the follvwing question:
(a) Identify the main function of management highlighted in above case.

(b) Identify the two steps of this function of management indicateJ above by quoting the
relevant lines. ~3 Marks)

~ SolyJt0~,~ 0

(a) The concept of management which is highlighted above is 'Organising'.

(bJ The two steps of Organising which are indicated in the above case are:
(i) Step 1 - Identification and division of work: "The company has recognised the
amount of work to be done in number of hours. The company has found out that it
will take 40000 hours of man work and has subsequently divided the number of
hours for different operations."
(ii) Step 3 - Assignment of duties: "Finally the responsibility of the pre-determined
quantum of work was given to different individuals according to their capabilities."

CAsda
. -6: The production manager asked the foreman to achieve a target producti~n of 200
ts per day, but he doesn't give him the authority to requisition tools and matenals from
stores deparbnent.
the prod ti bl the foreman if he is not able to achieve the desired
? . uc on manager ame (3 Marks)
get, Give reasons.
 116 / ABO\ Ot1II\ ( ,,, - (lu,iNI \\ s,udit' (XII)

, , the forl'tnnn if he is not able to achie

■'!11••·· l rnngl't' C,lll l 1l 1dllll
.11 J"l(lllsihility not ,,u thority. There sho Ve the
i f
•EmJ1•m11
---• •.,_..
l\'-' tlw pwl nr H'n n '
f
,
, 1 only gtVt'tl '~ • u1Q 1,._
desirt'd tar~l't hl'C\l\l~l' l,n... mnn "• :; . . . ~ ,sihility is given then nuthority for fuJf ~
'hmcr bl't~Wi'n ,rnthMity nihi rc~pon-.1b1ltty. 1I n"sp(1k1· ·~ 't l">l' complc>tcd.
b... tl1in1>
1 . th•W()I lclll . C)
that rt.'!:t'('n~n,itity mm,t be givl'll nl ,c, WISC l
k' , inn General Electric Company fi
Mr i\1Tind is an effici,mt manager wor n1 g h . d d . e~
·t· ll 1 ·.;. w )rk bv hims1..'lf. As n human being e ts very g?o an supportiv,
fond of o.~mp le mg a lL l ., • .1 . f ork to others. Sometimes he is so rn
tl . l d .., 't ,mt to g,vc buwcn o w Uch
and due to 11s ,c oc~n "' . k~. t1 , Jfficc that he even misses the priorities ar
invoked in doing diffl:'rrnt typl' ot wor s m ,c l eaa.
u G1 . 1 El , "'tric Company answer the follo •
On the basis of thr givrn inforn1c1hon .ihoul rnct,l l c Wtng
question: • d
. · · l
( ) \ Vhich concept ot m.1nageml'nt is \ a e
10 t d by Mr· Arvm ?
•'ll l: dversely affected due to this violation? (3 Mark
l ) How the company "t 1e ,1 - - - - - - -- ~

I t rfth.P¥
(a) The concept of management which is violated here is 'Delegation'.
(b) Employees need for recognition won't be satisfied. The! won't be able to develop their
slJlls if they are not assigned tasks in actual work environment.
· Mr. Joseph Thomes is a production manager of a Polyplex Ltd. He has divided
work among his subordinates in accordance with their interest and ability. The subordinates
also given the authority to take decisions relating to their work. At the end of the first
th of the year, it is found that Mr. Thomas has not achieved his target.
1homas has been asked to give a written explanation within two days stating the reason
the non-fulfillment of the assigned job.
1he basis of the given information about Mr. Joseph Thomes, the production manager of
Ltd., answer the following question:
and explain the concept of management reflected by the conversation between
Jaaeplt Thomes and Mr. Thomas. l3 Marks

Accountability: Accountability is answerability for outcome of the assigned task. It

from responsibility. When the subordinates are assigned responsibility that creates
to carry out the tasks assigned. They also have to give an account of the results
lilelred. in terms of the standards of performance laid down. It flows upward from subordinate
..
,._.,.,.~
. ·
~--------------
. Gupta, is a senior bank manager of a reputed Bank Branch situated at goH
. comp~ au~hority of approving high value queued up cash transacti~
staff m his branch. He announced that, banks will remain open thLi
111'11111:IAV its staff will do overtime till 21:00 hrs. for the next three days 10
a jump in footfalls to deposit or withdraw cash following the
and f 1000 Bank Notes. Due to heavy rush of customers in~
is unable to approve all these cash transactions hlmself· A'Jlll
taking all decisions for the bank, had to selectively d' die
 ~ N q 1117

h rit\'. He believed that the clerical staff mernbers are competent, capa ble and resourceful
,,ut l' 1 1 fo
'bTty
110d c,1n assume res~llSl _ r effective implementation of their decisions.
On thr t-,.1sis of the given information about Amit Gupta, answer the following questions:
Identify the concept of management being followed by Amit Gupta, after the
,m1muncement by Government of India.
1 ist the significance of the concept identified in part (a) above. (4 Marks)

7
5oluriON:
) The concept of management being followed by Amit Gupta is Decentralisation of
\uthoril).
\}11 Thr• nnportance of deCl'ntralis.1tion arl':
(; Den~lops initiative amongst subordinates.
<, Quick and better decisions.
(m Relien~s the top executives from excess workload.

i [.AsElET 10: CIE, an auto ancillary company promoted by Mahindra and Mahindra has
aken initiati,·es to streamline business. This includes exiting low-margin products, dosing
miable plants and adding high-margin products to boost earnings growth.
e endea,·our of the Indian JV, Mahindra CIE, is to bring its current margin level r f 9-10%.
fahindra CIE has four verticals. First is Mahindra Forging Europe, which earns one-third of
tal re,·enue by supplying parts to commercial vehicle makers in Europe. The recond is OE
orgmg caters to passenger vehicle makers in Europe and forms 26% of rev...nue. The third
usiness, Metal castings and gears, contributes 7% to revenue by providmg gears to off-
'ghway makers. The fourth one, Component Quickie which fOCUS6 on India where it
pplies parts to cars, tractors and truck makers and earns 34% oft Jtal revenue.
the basis of the given information about CIE, an auto ancir ctry company promoted by
· dra and Mahindra answer the following questions:
( a) Suggest with the diagram a suitable apojpti.on structure for the company.
(b) State any three advantages of this organisation structure. (4 Marks)

olurioN:

Divisional structure is suitable for this multi-product company.

t CIE Metal
i
Component
Mahindra
Forgings Forgings Castings Quickie

• I
Production
•
Marketing
~
Finance
 (b) The ad\ anti.1ges of di\ ii;;;ional strnctun~ ,11c· • ~ •
. i . . ' ,1 ',mcnt l'I v,n tl'd ~k,\b .
(i) Product --pedo\i!-.,1lilm hl'lps m l
-
c,t , \
.1 Tl , ,s divisinn,,1 \w,,ds MC ,H."Count,,ble f
( ii) It lwlns m tlw fh,,tion ,ll ll''-f'l'"~' ,, ' \ .' I ~l •nts llr
r J I t ' t to thl'11 l cp,H \\\l: .
,n,Hh,, re\ rnul''- ,mc1 t o~ts tl' n l:l . . . ' , " ....
l . . .. , sic• ,kl ,~llll1 11Mku1t, ,,s t ,ll h d1\. '"''nn is
(m) 1l pmnH)h''- ftc,,l,,ht\ , m11tJh\ l ,tn(1 1t\ ''"'

~uh1nnJl\ll\l~ uml . l I
• . l •ti ,~ tll'W divishms C,\ll lC all dcd Wilho
{t ) H facilililll'~ cxpnn~10n ,\I\L gro" ' • lit
inl~rruptmp, the C\.isting oprratil''""·
--------~cc=
Ambika Cottons l td.
.------:d---: -·,--
7'
.- c-id-,~,m,,dc garment
c, 1mg m • .,
1
~. monufacturing and

I
1s l
p l • · "' md s,,lcs) nnd clcpMlmental head
\ r thn.'C ~eparate departments (Pm chnsc, rn, llL 1H ' "' --, • f ' lO l kh . s
look after these functions. Rel'cntl\' tlw wmp,my I cpl,rh·d •' o<.s o ~ ..a s l~ first
rter and Amrit,1, who b CFO of lhl' n,mp,my c,, lkd ,,\1 tlw dl'p.MtmPnt<1\ h~ni~ to discuss
matter. Departmental hl',,ds \\'L'l'L' b\,uning l',tCh olhl'r for this loss lind it ccame very
cult for Amrita to fix the rrspnnsibihtv.
the basis of the gi\ en i.nfornMtion Ambika Cottons Ltd. dnswcr the following question:
The aboYe case highlights the problem~ a~~ociated w:th a particular form of
organisation structure Identify that orgamsahon structure.
I
List the disadvantages of this type of organisation structure. (4 M rk )J
ltiiih-Pl1
(a> Functional organisation structure has been adopted by Ambika Cotton Ltd. that has
resulted in difficulty in fixation of responsibility.
(b ) The disad,·amages of functional organisation structure adopted by Ambtka C tt
Ltd. are:
(i) Ignorance of organisational objectives.
(ii) Difficulty in Inter-departmental coordination.
(iii) Hurdle in complete development.

CAsElET 12: Aman, Avneesh and Amish have decided to start a business of manufacturing
toya. lhey identified the following main activities and which they have to perform:
(t) Purchase of raw materials. (2) Purchase of machinery.
Arrangement of finance. (4) Production of toys.
(5) Sale of toys.
Identifying the area where they can sell their toys.
1) Selection of employees, in order to facilitate the work they thought that four managers
Jlhou).d be appointed to look after.
Production (B) Finance (C) Personnel
· the function of management involved in the above mentioned Para.
the lines from the above Para which help you in identifying this function.
steps followed in the process of management. (5 Marks)
- -· (atl ()rgnm~mg.
(I,) {d "They idl"'nti~ied the
foll ow ing m<1in activities which
(rrl "In ord er to taci lita tc thl' wo rk
th1'y hnvc to per for m'' . .
to loo k afte r.... they thought thclt four mringers should
be npp oin ted
(t) ~ter.., m the p1occi;.,s of organi'-mg.
(i) Ide ntif yin g and div idin g the wo
rk in to mt1nc1geable c1ctivities.
(id De par tme nta lisa tion / dcp artm
gro upe d tog ether. ent ation where activities of a
sim ilar nat ure s are
(rii) Ass ign me nt of d uties to job
positio ns.
st
(1P) E abl ish ing rep ort ing
rela tion shi ps so tha t each individ
take ord ers fro m and to w hom ual knows wh o he has to
he is accoun table.
E\·erea dy sta rte d its ope rati on in
1905 by selling batteries and wa s
in 1934 by Khaita n family und er inc orp ora ted
the nam e Na tion al Car bon Co mp
\\rilliamson Ma gor gro up in 199 any . It became a par t of
3 and cha nge d its nam e to Eve
1995 and is cur ren tly hea ded by Mr. B.M rea dy Ind ust ries Limited in
. Khaitan, the Ch airm an. The com
under four main bus ine ss seg me nts pan y ope rate s
: Batteries, Flashlights, Lighting and
and Packet Tea . Electrical Co mp one nts
On the basis of the giv en inf
orm atio n abo ut Eve rea dy Ind
following questions: ust ries Limited ans we r the

(a) Sugges t wit h the hel p of

a dia gra m a suitable organisation
structure for the company.
(l Sta te any thr ee adv ant age s of
this org ani sat ion structure.
(5 Marks)
F£nfiM}I
(a Divisio nal stru ctu re:

J i
Bat teries Fla shl igh ts Lighting and Pac ket Tea
I Electrical Co mp one nts

J
Pro duc tio n
i i i
Ma rke tin g Fin anc e Hu ma n Resource

(b) The adv ant age s of Div isio

nal stru ctu re are:
(i) Pro duc ts spe cia lisa tion hel
ps in dev elo pm ent of var ied skil
ls.
(ii) It hel ps in the fix atio n of
res pon sib ilit y as divisional hea
ds are accountable for
pro fits , rev enu es and cos ts rela ted to the ir dep
artm ent s. . . . .
.. ') It
(ttt pro mo tes flexi'bil ihr
~1 ,
init iati ve and faster decision ma kin g
as each d1v1s10n is an
aut ono mo us unit.
 120 / AHD\ n~ll\ h1 l kl\lNI\\ <i rnd1 •' (XII)

<:MEio 14: Coral l ri~oratonr I td. as n two decadl old company with ultra ll\Odern
• strategKalh pl;)Ct:°'CI plant,;; n,l: wmpan,' l"('gtste~~ offi~c 15 at c:atk~;:, :;!umbai alld
rbn~ arc Itxakd at Daman, the mnrketing of mrchcines 15 underta en hradun °
On tht ba'-15 ot the gn en mformnhon about Coral Laboratories Ltd. answer the folloWing
ur,tio~·
\\1uch type of organisation structure should the company adopt.
State am four ad, antages of this orgarusation structure.

·dl rioN: Coral Laboratories Ltd . should adopt functional structure ilS it is a single prOdUct
...,.......... ,y ,,ith different departments situated at different locations.
Th c mp m gets tollo" mg dd, antages b) c1doptmg function,il ~tructure
d Coordination is establisherl: All the persons workin_g ~ithin ~ departmental are
specialists of their respecti\'e Jobs. It makes the co-ordination easier at departmental
Ie,·el.
(i ) Helps in increasing managerial efficiencv: Managers of one department are perfomun
same type of function again and again which makes them specialised and improv!
their efficiencv.
(iii } Minimises cost: It leads to minimum duplication of effort which results in economies
of scale and thus lowers cost.

Elder Laboratories Ltd. is a company with ultra modern strategically placed

The company identifies the various types of activities to be done. For this it divides h
mto \·arious departments. The company then gets involved in its business with a lot of
After one year of successful run the company decides to transfer the decision making
•m·ty to the lower most level of the employees. For this a major policy decision is taken.
6e basis of the given information about Elder Laboratories Ltd. answer the following

ldentify the main function of management and its important concept highlighted in
above case
lain any two significance of this function of management as well as its concept
·ghted in above case. (5 Marks

(•) 1be function of management highlighted in the above case is 'Organising'. The
concept of organising which is highlighted in the above case is 'Decentralisation'.
0,) The importance of organising is:
(i) Benefits of specialisation: rn· organising every individual is assigned a part ol
total work and not the whole task. This division of work into smaller units and
repetitive performance leads to specialisation. Thus, organising promoteS
specialisation which in tum leads to efficient and speedy performance of taSkS-
(ii) Oarity in working relationship: It helps in creating well defined jobs and ~
clarifying the limits of authority and responsibility of each job. The su~
subordinate relationship is clearly defined in organising.
 ORGI\Ni\iN<t / 121

The importancL' of dcn n1t ' 1 Jis• t,t ·IOll

1
ill'(•·
(i) De\'elop., initi,1tiv(' i11lH>ngst sul ,
the subordinates tlrc g iVL'n frc ·d ' 0rd1 nntcs: It helps to promote con fi dence b ecause
. c om lo fd kl' thei r own decisions.
(ii> Qm ck ,md bt. . lt('r dccisionc,· Tl , t . .
}rnnds of fow individ b. '\c 'U rd en of managn ial clcdsiom, docs not he m the
' 1
ua s ut ge ts d" 'd · h h I 5
them to take better and . k : . ivi (.'d nmong various pcn,ons whtc eP
qmc dec1s1ons.
~ Ncha runs a factory whcp· 1
~ d ·h · t d . em s ,e mnnu fac h1res shoes. The business has been
dolflg "t anh s : m e~~-s to] expat1 by diversifying into lea ther bags as well as western
d
'- 1tal wear t ere V makmg 1er company .
1~1 n h to mark~t her bu . . . 1 provid er of corporate wear. This w1.11
a compete
enable er smess unit as the one stop for working women.
n..:ch nrpe of structure would you reco d f
/ \\·iu •1 rnmen or her expanded organisa tion and why?
(5 Marke;)

~
, · • because the factory
Divisional Structure is recommend ed for expanded orgamsahon
n"lanufacture
will "'. . · of products
. s t rue t ure sh e may avail· the benefits
three product. By th1·s
special1Sahon. The company gets following advantages by adopting divisional structure:
(i) Products specialisation helps in development of varied skills.
(ii) It helps in the fixation of responsibility as divisional heads are accountable for profits,
revenues and costs related to their departments.
(iii) It promotes flexibility, initiative and faster decision making as each division is an
autonomous unit.

CAsdrr '17: : A company, which manufactures a popular brand of toys, has been enjoying
good market reputation. It has a functional organisational structure with separate departments
for Production, Marketing, Finance, Human Resources and Research and Development.
Lately to use its brand name and also to cash on to new business opportunities it is thinking
to diversify into manufacture of new range of electronic toys for which a new market is
emerging.
Prepare a report regarding organisation structure giving concrete reasons with regard to
benefits the company will derive from the steps it should take. (5 Marks)

The company should shift from functional structure to divisional structure as the
mpany is now diversifying by adding a new product line. By this structure, the performance
each product i.e., simple toys and electronic toys can be easily ascertained.
The company gets following advantages by adopting divisional structure:
(i) Products specialisation helps in development of varied skills.
(ii) It helps in the fixation of responsibility as divisional heads are accountable for profits,
revenues and costs related to their departments.
<iii) It promotes flexibility, initiative and faster decision making as each division is an
autonomous unit.
- ,------~~-;.,-;.~~~~~~r~~,i:rri~wmJu·~~~~,,~
i ' .
\}'nn,, I'' t'!-l 1
• \th ,•m1~1t\vinp. I~ llllll l'''''Pl,, ct
, l'st...._
i
i""a,•EIET 1 · An hh 1.111 h t. '" , ,•,1uipnwnt . •i ·n t\\,ll kt'I:-- , l l \ •"hh•, ,, ii~• (\t,1,·, In,·-. ti hns. ~ tl\tliq
c,\n -,~
'""° . tl) t'\.P,llhrt '' t:-- [,u,11\\'!-!-
· •
It\ hll\ ~. •
i fl, tt,c.:•ntr,,l11c·, I m {\l\l\~t'I\H'l\t ~,•:--h•tt\, ''1

~hi•tt1lh' fn,m n N•ntt\ iltr ,·, ' ,,rm,·,1 h, lhl' u 1 mp,,n, to h,

:,. • ' 11 llH' ~'1'1 1 ''Oil
l,knhh lhl' m.111.11:l'llll'lll I""' 11, '" ' •• (I ~1,,1
dt'\"\'Illf,1h ,·d \\llllJ',ll\\ •

HiNT: O~anbing.
l f, • l't\hl\ft',
t ti\
• t\\
tmut.wlu1 inh ,,f min<'t,11 Wl\h•r bot11,~..
I 1 2·• Him~,,g,ir lkH•ragt'' tc ., 1:-- • to ·lmt' ~00ll h,,tlh-~ in n d,1) . 1 here'"
r .. .
ul'>f f.
•
• 1ti 'tl \s h\ l\h\t\ll l ~~
The t,1rgt>t pf th(' ,,1-g,,ms ' . . ... . i " \t i<m which pr(mh,t('~ l'ffic,c,nc\:
' r ~ lion II\ the ,,i ,,,m ~. , I 0
ocrupationnl ~J"l'Ct.l •~.1 . . - ,th,t h in such IVpt• n, l'thM'llStltion stn1ctu
] ~ TI1t't'"' i, '"' dunhrahl'll ot l
~•n1p ''.\'l't, ~. ' · r J I tl ( ~
Idcntit\ tlw t\ F'L' l)t ,)q.~.Hu-..1tlllll :-- t I lll hlh' hlf, hlaM lll'l II\ \L' l .i l' I !\14

Hi NT· F1.; nt'tll,nnl St a :dun'. l l ,h

. . :--,''/'('
~ y ·t 'h Ltd h ,.._ ~n'" 11 m lt ",lS ,l 1\hlrk.l'l h'.llll't' 'Ht Wtt c.hannes
--'fl~ ..
~
1 11:
~IEIIET } :\.1t1t~na n _e(
b ~-·,e,, env1n,nnwnt · '' ; tl th, •ntr, tlt lNC~ tb m,uk.l•t shat'(• i~ declining l
,1nu "1 l l l 1 l .
u~i · - .... cl")
rope up,, .1.th tht' ~1tu,1twn L c ~ • • 't lrt~ dt'IC'~,
, 1 tm~ , ~l'llll' f't "~ ,Htl ,onty
, to the Gerti),,,,,
..... ~
' l
Mana~er wht1 .1ls0 tt' t 1m~t: h. , ,If o, t'rburdt'lH.'ll .1nd \\'tth .,. • ill •of C'Eo
tlll ,nppr<)\
.. h , th
disrerses St'lillt' 0t 1~ au Ort \ l • t t, v:irit,us lt'' t'ls thrt,u~ht,ut t 1'lt t)1bnm~ation.
ldennn tnt' conCT'pt ot m:magl'nwnt dt~C'll~~l'll ,lbll\'t'. (1 \t
IINr: Decentrahsahon.
4: Identify and state the tvpe of org,mb.1twn stmt:tut't' .1d1.,ptt.•d. b, tht• compan} ir.
following case:
(11) Cosmo Films Ltd., grnws, so it ncPds tl) add nw1\' Pmplo, t'l':-- "n: l

departments and introduce new le, '-'ls ot m,mt1gl'llh'nt.

(b) Shourva Steel Ltd. is a l.1rgl' org.misation h.wing di , l't~ifil·d ,lth\lt "'
operations requin's a high degn:~e of SPl'Ci.1li:--.1tion. (3 M ,
(11) Divisional Structure. (l,) Functional Structurt'

5: AD expenses bills of employees are processed bv t\ \r. R1k.t'sh. l~t'l\t'r,1l M,m;i_~

himself at R.K. Trading Ltd. He feels quite overbunienC'd. l h.' dt,'i"fr-d to ddt~a~'
this work to ~istant manager ~ lr. Rwindra. But ,1fter St.'mt.'tin\t' tlw ~ tr. R.n indri
disperses this authority to various levels throughout tht' l'l'~,1nis.1htm. N"'"' tr,n t'll~
biDs are processed through respcchvc d('partnwnt supt•rvis1.,r.
Specify the two important concept ot mM,agt'llll'llt highhghtPd in .lbl,\ '-' \ 'l'

(3 M ~·
Centralisation and Decentralisation.
6: 'Sheny Foods Ltd.' is a famous comp,my nM\..ing difft•r,'nl fo,1d malt'fi$'
Mi: David is the managing director of the con,pmw. I it' is full,· ,1ttachtxl "' ti>'
employees of his company. This is the n1.1in re,1son 1hat bl't,,n, 1.1i..ing nn)' J,~"'
he mnsults all the a>ncemed employees. A suggl'Sh.>n bo\. h.1s ,1lso bl..-n pn•1:
in the ~ y . It_ is opened once in fift,~,n d,t\'s. Tlw ,•mplt>\W$ giYing Pf'I ~
suggestions are SWlably rewarded. Besides all the t•mployl.'<'s ,,f tlw conipanY
 01UjANi,iN(i / 123
L\n1·oy complctl' ft'L'l\dn,n l0 ,. . . ff' • "ny time, for all
lonrn,utllt:.,I(' with nny senior,, iccr '
1

types of m,,ttcr wlwtht•t· it is J'nh

, 1
t L' 11 1e, 1 nr Ilc.m;nnt1 1,
On t1w b,,sis of the >;ivcn intorm"t '
11mn n1:,011 t •si,,crry 1j l) o tJa.. I~ td ,, ;1nswcr the
fo\lt)\\'tng qlll'Slions :
( 1)kknltl\ tlw lV J'l' of nnl .. ,, t 1 I
, r," ••~a mn '1p, ,hghll d 111 tlw ,Jhovc. c I l
1

(11) ~t,1ll' .m, l\\o nw11 ts of 01gilnhi1tion hwhli,lhll'd Ill the ahov< c,1 r (1 Mark8)
, l n ,,
HiNl: (a) lntorma Org,misntion.
(b) Mrrits:
1~ lca<l~ lo fo 5 lPr sprc.1d of
(i) informt1tion [I S well as quick feedback sjnce
hxcd Imes of con,muntc,ltinn Mc not followed .
(ii) It helps to fulfil the soCI.11 lll'l'ds of mPmhcrs.
{;AsE El 7: Pranj~l, i~ th e personnel nMnagcr in I IXY Lld. Om• of his job responsibilities included
sanctioni ng leaves of employee s and the firm followed a policy of granting leaves
to only 10 out of the 75 workers in any giwn ddy. /\s the year drew to a close,
Pranjal was drawing up the recruitme nt plan for the next year. Since he did not
want to be disturbed , he asked his assistant Mr. Bandari to look after sanctioni ng
leaves that day. Mr. Bandari granted leave to 14 workers and as a result, the factory
manager was very upset.
Who will be accountable for this errer in granting leaves? Why? (3 Marks)
HiNT: Pranjal will be accountable as delegation does not mean abdication.
CASdEl 8 Rajeev, the owner of Pathways constructions decided to start a campaign to create
awarenes s among people for developin g clean surround ings in their area. He formed
a team of 10 members to list the different ways for cleaning the surround ings. 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
unemplo yed youth. On evaluatio n of different ways, it was decided to take the
help of local residents . To achieve the desired goal various activities were identified
like:
o) Purchase of necessary items like dustbins, garbage bags, brooms, etc.
(ii) Collectio n of garbage.
(iii Disposal of garbage, etc.
After identifica tion of different activities the work was allocated to different
members .
(a) Identify the concepts of managem ent involved in the above situation and
quote the lines which help in their identification.
(b) Also, identify the values which the company wants to communi cate to the
societv. (4 Marks)
Ans. (a) Conc~pts involved - Planning and Organising.
Lines for planning:
(i) 'One suggeste d ...... unemplo yed youth'
(ii) 'On evaluatio n...... local residents'
(iii) 'Campaig n to create awarenes s ...... surround ings'
 l 24 / AllD's H1111's Ip - 1l11,IN1 ,, S,wlii" (XII)

I Inc•!, tm oigi1nl~lng:
(i) ''lh th hiPv,• ...... di~p11qr1I n( gn, b.igc• i•I, ,'

un 'i\llt'l' id,•ntilirnlitHl 111 diffr 1

1t'lll ,1rtlvilics ...... differPnf members'

(I,) \ ,1h1r1t: (A n, 11, 0 )

(d lxt'SJ'•" I 1,11 ('1l\'irnn11w11I.

( ,r) l1•:11n - \\'Ill k,

(,rr) h1lfilling ~o(·inl rt•spnnsihility.

U \t In 9: Anita w;is ,1 , t't )' tillPnlt'd pnllt•r· .,nd •-ht• p,11 tidp:tlcd in exhibitions and her Work
w,,~ ,lf'l'''l'l"illtl'd hy ,,II. Snnn, ~lw ,,1,11'1Pd s1•t111 in~ b11l.k c~rdns c.~nd realb~cd that
slw hnd nn ,,pp,n hmily to t"tlll\ 1,, f hl'I' hohby into n fur111shmg business. She started
grtting rcgul.1r Prdl'r~ fwm t•~l1tbltslwd 1l'1.iil slwcs ,ind ,1a th•• number of people
shl' employ,•d inrrc•,,~l·d al ,1 sll-.1dy r.1tc.•, Rlw H'.1.li~•:d thnf she now nccd:d to specify
clt?3 r-tv tlw boundnril'~ ,,f .mthnrity ,md rP1:1pon•;ib1l1ty of the employees Job positions
nnd r;tablish ., :-., sh•n1.1tic coord111t1lion ,m10ng the vnrious activities to achieve her
organisn tion.1 J g,),1 ls.
ldl•ntit, the struchm" th.11 sill' is try ing lo d('wlop i!nd expla in its featu rec-,
(4 MarksJ
HiNT: Fom1al Structure.
Features of formal organisation:
( Clarifies Authority Responsibility Relationships.
(i1) Means to Achieve Organisational Objectives.
(iii) Coordinate Efforts of Various Departments
(iv) Deliberately Designed by Top Management .
CMda I 0: Optima Industries is a company manufacturin g spectacle glasses and frames. The
company choses to diversify its operations so as to improve its growth potential
and earn more profits. Many alternatives were thought for the purpose and were
discussed amongst the members of the organisation. After evaluating the various
alternatives Mr. Atul, the Managing Director of the company decided that they
shouJd add office furniture as a new line of business activity.
On the basis of the given information about Optima Industries, answer the
following questions:
(a) Name the framework, which the divPrsificd organisation should adopt, so a,
to achjeve the objectives of growth and highl'r profits? Give one reason 1n
support of your answer.
(b) State any two limitations of this framework. (4 Marks)

Hllff: (a) Divisional Structure: Reason in support of the answer (any one).
(i) It leads to Product Specialisation which helps in higher efficiency and
revenures.
(b) Limitations of the divisional structure:
(i) Conflict may arise among different divisions.
 (ii) It rn,,y k•ad to incn•,1St• in coi:;t9
-----
sin<(' tlwrP mny be a
·
duplication
of

fl'Sl1\lt"f('S.

(iii> Di\ ,-.wnnl inl('H'S19 m.,y supersede th•-- nrganis.ition's intercSl.

1 A l'llJllp,m) nlclnufac_tt_1rin_g soft drinks w.,s doing ~mod business for many years. Jt
11 0
vr.atrh t d
h,1d" "fomm,,nt pos1hon m tht> mark11t. But over,, period of time it'r, Hharc stare
dt"clining.
th
This ~hangt' h,,ppciwd due lo l'wnomic environmental changes and with e
th
entry of multmalton,,l companies in the ficl<l of soft drinks. Since its inception e
company was following ,, Cl'nlr,,li sed model. Even the minor decisions were
always madt• by tlw lop level m,magcmcnt, tlw middle level and the lower IeveJ
managers had no say in dt•cision mdking.
This model St'rvt•d the compJny well till tht• year 1991 but now the company was
fadng pressure due to changcR in the bm;jncss environment.
()n the basis of the given information, answer the following questions:
ca) Suggest tlw change that the company should bring c1bout in order to regain its
market share.
(I,) Explain tlw importance of the concept identified above. (5 Marks)
HiNT: The top management of the company mu st introduce the concept of
' Decentralisation'.
Importance of decentralisation:
(1) Relief to lop management. (ii) Develops initiative amongst subordinates.

(iii) Quick decision-making. (iv) Develops managerial talent for future.

CMEla 12 · Mr. Mohan is a senior accountant in a departmental undertaking. He is a very
conscientious worker and likes to complete work assigned to him all by himself. He
does not like to share his work or take help from his colleagues and subordinates.
Sometimes he's over burdened with handling so many different problems that he
misses the deadline and then has to carry work home. This adds to his stress levels
and dissatisfaction. A lot of times Mr. Mohan is pulled up by his seniors for not
completing work on time.
On the basis of the given information, answer the following questions:
(a) Identify and explain the concept of managcnwnt thdl is being violated here.
(b) What are the disadvnnlagt·s thnt Mr. Moh,m is facing due to the violation of
the concept identified in (a) .ibovP. (5 Marks)
HINT: (a) Delegation of authority.
(b) Disadvantages of not following Delegation:
(i) Employees get over burdened.
(ii) Stress levels and dissatisfaction is on the rise.
(iii) Being pulled up for non-completion of tasks.
sElET 1 J: Anjali works as advertising manager in an advertising company. She has been
made an overall official incharge for organising a trade show for one of the clients
of the company. For ensuring that the show takes place successfully, she identifies
 . . ·tt· ·nvolved and divides the whole work into various task
the vanous activ1 es I d ti
ee an recep on COmmittee l-&to\l~
.
. 'tte" presentation committ
like marketing comm1 c, . tt h . l.llord
facilitat e conrdin ntion within a nd among comm_1 ees, s e appoin ~
to f ,1 p Foch member in the group 1s asked to report ts q
superintcndrnt l) cal l grou . ., - . k d to •L
. .· ,. . d
re~pectn c supermtt n l"nt . Fnch ,
member in the group 1s as e to report '(1~
. ~ •d to th
~
re~pectwt? supen •1so1~ unuJ <111 the su,,erv1sors nre cxpcctc to work as per ·~jaj1,
• • ..
L ~.

orders.
On the basis of th!? given infomiation about Anjali , answer the following questi~
(a) hknhh tlw function of management being perform ed by AnJali.
(h) [1: "-Cnbc brictl, the, arious steps involved in the pe_rformance of th fllJl
of management as idrntifir d in part (a) of th c que'itton. (5 Ma
HiNT: (a) Organising Function .
(l,) The steps involved in the proces5 of organisi ng are as follows:

(i) Identification and Division of Work.

(ii) Departm entalisat ion.
(iii) Assignment of Duties.
Establishing Reporting Relahonslup.
(fr•)
dn 14: Ms. Maria is the marketing head of a Multi-N ational Company. In a high le,;
departmental meeting, she asks o~e of her su~ordinat~s, Ms. Kavya, to take charge
of the company's new office in Smgapore. Miss Mana grants necessary authom
to Ms. Kavya to take complete charge howeve r within two months of seeking
feedback about Ms. Kavya's work Miss Maria realises that Miss Kavya is not doing
the \\·ork as per expectations. So, she decides to take away the authority from Miss
Kavya and redelegate the same to Miss Esha.
Due to this change over in the manager-in-charge, at the Singapore office, the
work there suffers a lot and the compan y is not able to meet the desired goals.
On the basis of the given information, answer the following questions:
(a) Why is Miss Kavya suppose d to give regular feedback about her work to\ ,
Maria?
(b) Can Miss Maria take back the authorit y granted to Miss kavya and delegate
to another person?
(c) Can Miss Kavya be held responsible for not meeting the work allotted to her
(d) Differentiate between authority, responsibility and accountability on the bas·
of origin and flow. (6 Marks'
HINT: (a) Miss Kavya is suppose d to give regular feedback about her work as she haS
been granted authorit y and entruste d responsibility, so she remains answerable
for the outcome.
(b) Yes, the authorit y granted to a subordin ate can be taken back and re-delegated
to another person.
(c) Yes, ~- ~vya c~ b~ held responsible for not meeting the work
her as 1t IS the obligation of subordin ate to perform the assigned duty t
allow:;
best of his ability.
 ipn l of ., lc•ndl1111' dw ol of I I ( II l 1 " ' ,, f (f
"II I
, , ,rki nf llR tlw prim I' I. I•
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f I\ I~ \\ ( (J
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1

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1> un•ll
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1 lt•r or1d <'XJJ( f rv, ry(I , u,'
ins1itutmn, 11c J!, n .lou g, ID'1k 1110
1•
h' '1 J I till'
, h,•,u• ll 11flwr hn,, d 1, m 1.
,.,
:,loj till . ,titmol rnlcs nnL1,1cg11 1.,1 1011 s, Un the ' , 1 , iir.1 <or 'u,,
' ,r~nn1:--,
l'lopt'I' f1wndly tl'po, l with 111~ /lt,1(( m( mht, J y " fIr rt,1 ~1
1,,lh"1-.' l(l l • 11JC' \ •rh)p clt•V I .
h brr ik J Jr ol o orp,c1m
10tl lll s t1nd dw "'t'1 tlu• lunc
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l,11,
11
• ,hill ' Jw tt t,1k mg •
tlll'n 1 ''
1 kno w tht' ii ilff rnr·mf'"~ JI
,, ,t
i1 d m:111 info1 m,1 I 1get togc•t 1e1 s to gl'I lo
, -'"""' p n,, y
,ic~ c1111 ~ , .I I him fou nde r tand th"
sL1 H mc•n,hl•rs hulp
pH:~r·intcr,ll ti,ms 1h.1t lw ms w rt 1 I 1e
vit•WS llf st,1fl tlll'l lllw r~ nhotrl the
polic 1eq hc•ir,o,, followccf In fl11 noo ...,,
1
fh, ·. nd
pi 111 0ns ,1 (fion,n g f t
l) k ,· usl\ l)f this •fl'l db,1
1
ck wrn,tr lll ll V<'ly lo improve J11 c. fun 1 m u ur
. •
Hr nu1 L!- • , •
wc•r llu· follo wjng que stw ns·
()n till' basis ()f thl! g1\Cll mtorm,,11011, ,rns
l ldcntif) ,md e~pl.1111 the two typl
'~ of organil1itl1on, thtll h Vf b rl
een llil' typt'r, of org,lflJ c1twn ,rl
;,,) Brin~ out an) threl' diffcrl'llCl's betw
(6 Mark )
111 part (a).
anisation.
:ormal organisatio n and lnformal org
('1) l the
was set up in 195 5 TIJJ date it foIJows
.
HiNT:
b· A company manufacturing bedsheets its day-to-
1 to t~s it is facing a Jot of problems in
srlET • formal organisation stru~ture. -~ue nging
king _like: del ay~ de~1s~on mak ing, no~ being able to ada pt to the cha
dav wor a
demotivated workforce, red tapism and
business environment, dissatisfied and is not
leads to a stagnant company which
\·ery high employee turnover. All this
es.
able to cope up wit h the cha ngi ng tim
, answer the following questions:
On the basis of the given information
that 1t
company with regard to the changes
("' What would be you r advise to the
keep pace with the current times?
should bring abo ut in its structure, to
s7
(b) What benefits wou ld the com
pan y derive by making these change
dIVersify
(c) Using your ow n jud gem ent , adv
ice the company which field should it
(6 Marks)
into to improve its profits.
n.
The com pan y sho uld giv e due importance to the Infonnal Organisatio
HiNr: (a)
(b) Benefits of informal organis
ational structure:

(i) Faster spr ead of information.

(ii) Fulfilment of social needs.
(iii) Fills in the inadequacies of
formal structure.
ing curtains and sofa cushions as this
The company can diversify into produc
(c)
e solution to their needs of furnishing.
will provide the customers a complet
chargers. ~e
Ela J 7: Bharti Dut ta run s a fac tory
wh ere in she man ufa ctu rers mobile
m~bile
ines s has bee n doi ng wel l and she intends to expand by diversifying into
bus r
making her company a complete provide
accessories as well as batteries, thereby st0 P
to market her business unit as the one
of mobile solutions. This will enable her
shop for mobile solutions. d f or th e exp,anded organisation
. wo uld you reco mm en (6 Marks)
Wh 1ch type of stru ctu re . . • t cture
·
of this org ams atw n s ru
and why? State any four advantages · since it will produce
d d buSm ess
. .
HiN . 'D'1v1s10nal stru ctu re' is suitable for the exp an e
'·
multiple products.
•,••r----------,i.~o 1 "' IJU '!I O U II '!I l"'J'r-"" Otntl'ft:n--;:JIIJUl t.~ \I' ll J

C ASI hr 18: Rish u, Ashu ,ind Rov1 h,1vc de<.:idecl to 6!~rl a business of manufacturing bi~.
They idc1 ntifit'd lhe following mnm nct1v1hcs which they have to penOrrn: ~
Pu1t:hnsf• of mw mnt, rinl G.
(,> Purchase o( machmery.
(11)
(tit) Produ, 110n of h1su111 s. (w) Arrangement of finance
(r•) S.ill' of h1 sc1J11t;. (r,i) Jdcnttfy ing the sales area.
(r "> Sel.---•diun of Pmployces.
In 01drr ti) 1.i, ilit,,lt' the work they thought th a t four managers should be aPl>oi.... .
tn look afler Production, Finance, Marketing' Personnel. - · -~~
(a) fd('nl1f"y the function of mnnagenwnt Quote the Imes from the ah(
\\ lrnh 11l'lp ~ l>U m 1dcnllfymg tJw, fundmn.
(l,) SIJll' the ~tc. p~ fn1lo,vl·d in l111• procct;~ of th1C:; function of managernen

(6 1\1.i
HiNT: (a) Organising.
(b) The steps involved in the process of organising are as follows:
(i) Jdl~ntification and division of work.
(1i) Departmen talisa ti on .
(iii) Assignment of duties.
Establishing Reporting Relationship.
(it,)
;.iiitiH 19: Buyers Stops Ltd., a company having multiple stores in various parts of the CCJUntr.
offers variom, types of daily use products under one roof. Each store is Placec
under the charge of a store manager who is allowed to run their stores independ_enfi,;.
by deciding about the products to be promoted, appointment of workers, cus~
complaints etc. As these managers have a wide knowledge of the area acceptabiJih
it enables them to take these decisions effectively keeping in view of the prevailing
circumstances and consumers' needs. This resulted in improvement of customer
service and at the same time serves to boost morale and increase the job satisfactn
of the store managers as it empowers them to innovate and use their initiatives.
On the basis of the given information about Buyers Stops Ltd., answer the following
questions:
(a) Identify and explain the policy followed by 'Buyers stops Ltd.' to run th
stores successfully.
(b) State any three points highlighting the importance of the approach follo\ltt'C
as identified in part (a) of the question.
(c)Llst any two values that 'Buyers Stops Ltd.' wants to communicate to ts
employees. (6 Marks
(a) Decentralisation.
(b) The importance of decentralisation:
(i) Develops initiative among subordinates.
(ii) Develops managerial talent for the future.
(Iii) Decision making.
(c) 1be two values are: Initiative and Trust.
❖❖❖