Organising — Chapter 5

Notes, Mind Map, 20 Case-Study Questions & 30 MCQs (Strictly from the provided Chapter 5)

1. Concise Notes (Strictly from Chapter 5)

Meaning & Concept:
Organising is the management function that translates plans into action by identifying and
grouping work, defining and delegating authority, and establishing relationships so people can
work effectively to attain objectives.
Steps in the Process of Organising:
1. Identification & division of work — break plan into manageable tasks to avoid duplication.
2. Departmentalisation — group similar activities (by product, territory, function) to
facilitate specialization.
3. Assignment of duties — allocate jobs to people matching skills and competencies.
4. Establishing authority & reporting relationships — define who issues orders and who is
accountable.
Importance of Organising:
- Benefits of specialisation (skill gain, efficiency).
- Clarity in working relationships (lines of communication, responsibility).
- Optimum utilisation of resources (avoid duplication).
- Adaptation to change (structure can be modified).
- Effective administration (clear job descriptions).
- Development of personnel (delegation fosters growth).
- Expansion and growth (adds jobs, departments, new territories).
Organisation Structure:
- Organisation structure = framework showing how managerial & operating tasks are performed;
shown via organisation charts.
- Span of management = number of subordinates a superior can effectively manage; influences
levels of management.
Types of Organisation Structures:
Functional structure: grouping of jobs by function (production, marketing, finance).
Advantages: specialisation, control, managerial efficiency, economies of scale, easier
training. Disadvantages: functional empires, coordination problems, inflexibility, limited
managerial development.
Divisional structure: separate business units/divisions (by product lines) where each division
is multifunctional and acts as a profit centre. Advantages: product specialisation,
accountability, flexibility, easier expansion. Disadvantages: inter-division conflict,
duplication of functions (higher cost), risk of divisional managers ignoring overall
organisational interest.
Formal vs Informal Organisation:
Formal organisation: designed by management; defines jobs, authority, responsibility,
rules/procedures. Advantages: easy to fix responsibility, role clarity, unity of command,
stability. Limitations: procedural delays, may not recognise creative talent, incomplete
picture of human relationships.
Informal organisation: network of social relationships arising naturally between employees.
Advantages: faster information flow, fulfills social needs, can compensate formal inadequacies.
Disadvantages: rumours, resistance to change, group norms may harm organisational interests.
Delegation:
Delegation = downward transfer of authority from superior to subordinate (manager remains
accountable). Elements: Authority (right to command; flows downward), Responsibility
(obligation to perform tasks; flows upward), Accountability (answerability for outcomes; flows
upward and cannot be delegated). Authority must be commensurate with responsibility.
Decentralisation:
Decentralisation = systematic dispersal of decision-making authority through levels (extension
of delegation). Benefits: develops initiative, managerial talent, quicker decision-making,
relief to top management, facilitates growth, better control & performance measurement.
Caution: must be balanced with centralisation to avoid disintegration.
2. Text Mind Map (Sketchable)
Central node: Organising (Chapter 5)
Branches:
- Meaning & Purpose: Translate plans into action; Clear jobs & relationships
- Process/Steps: Identification & division of work; Departmentalisation; Assignment of duties;
Authority & reporting relationships
- Importance: Specialisation; Clear working relations; Optimal resource use; Adaptation to
change; Administration; Personnel development; Growth
- Organisation Structure: Span of management
- Types of Structure: Functional (advantages/disadvantages); Divisional
(advantages/disadvantages) — note: divisional units often adopt functional structures
internally
- Formal vs Informal Organisation: Formal (rules, stability) vs Informal (social networks,
quick info)
- Delegation: Elements — Authority, Responsibility, Accountability; rule — authority
commensurate with responsibility
- Decentralisation: Systematic dispersal; benefits and need for balance
Use this as nodes & subnodes when sketching the mind map.

3. 20 Case-Study Style Questions (Strictly from Chapter 5)

1. Wipro reorganised into product-line subsidiaries and moved from centralised to decentralised
management. Explain how this change supports customer-orientation and what risks Wipro must
manage.
2. ONGC adopted an asset-based structure and moved control of service personnel to asset
managers. Analyse how this change addresses delays and responsibility issues described in the
chapter.
3. Johnson & Johnson operates as many small companies (190 affiliates). Discuss how this
decentralised model combines the advantages of being big with agility and identify two possible
downsides.
4. Sunita’s travel agency is organised into operations, sales and administration. Propose one
change if Sunita diversifies into corporate travel and justify whether functional or divisional
structure suits the expanded firm.
5. A factory has functional departments (production, marketing, finance). The firm plans to
launch a new product line requiring rapid decisions on design and marketing. Recommend an
organisational change and explain the benefits.
6. A production manager sets a target but does not give requisition authority to the foreman.
Who is accountable if target fails — evaluate using delegation principles.
7. A division head begins prioritising divisional profit over corporate strategy. Using
divisional-structure disadvantages from the chapter, recommend controls the top management
should introduce.
8. In a formal organisation, routine decisions are delayed due to rigid channels. Propose two
practical steps to reduce procedural delay while retaining necessary controls.
9. An informal group spreads a rumor and resists a new policy. Using the chapter, outline a
managerial approach to manage the informal group positively.
10. A growing toy company with functional structure wants to diversify into electronic toys.
Judge whether it should move to divisional structure and explain the advantages it will gain.
11. A company uses a narrow span of management resulting in many management layers and slow
decisions. Explain the effect on communication and recommend span adjustments.
12. A firm gives responsibility to subordinates without sufficient authority. Evaluate outcomes
and suggest corrections referencing delegation elements.
13. A centralised FMCG firm loses market share after liberalisation. Design organisational
changes to help regain agility and market responsiveness.
14. A newly-formed division duplicates HR and finance teams of other divisions, increasing
cost. Propose a hybrid structure to retain divisional responsiveness but reduce duplication.
15. A multinational uses departmental specialisation but top managers worry functional heads
lack general management exposure. Suggest a managerial-development remedy.
16. A manager wants to decentralise decision-making widely. Create criteria to decide which
decisions to decentralise and which to retain centrally.
 17. A manufacturing plant has low morale due to lack of recognition in a rigid formal system.
Using the chapter, propose 3 organisational steps to improve motivation.
18. After restructuring into product divisions, inter-division coordination weakens. Recommend
mechanisms to improve coordination without reversing divisional autonomy.
19. A manager delegates authority but remains unclear about accountability. Prepare an
accountability checklist based on the chapter’s delegation elements.
20. A company faces rapid market change and must adapt structure. Outline a plan (steps from
organising) to redesign structure ensuring optimal resource use and minimal disruption.

4. 30 Important MCQs (Questions + Answers)

MCQs (Answers listed after questions):
1. Organising primarily helps a firm to: A. Increase product prices B. Translate plans into
action C. Replace managers with machines D. Eliminate departments
2. The first step in organising is: A. Departmentalisation B. Assignment of duties C.
Identification and division of work D. Establishing reporting relationships
3. Departmentalisation groups activities that are: A. Different in nature B. Similar in nature
C. Randomly selected D. Only by territory
4. Span of management refers to: A. Number of managers in a firm B. Number of levels in the
firm C. Number of subordinates a superior can effectively manage D. Amount of work assigned to
each department
5. Functional structure groups jobs by: A. Product lines B. Geography C. Functions (e.g.,
production, marketing) D. Customer type
6. A disadvantage of functional structure is: A. Occupational specialisation B. Easier training
of employees C. Functional empires and inter-departmental conflict D. Minimal duplication of
effort
7. Divisional structure is most suitable when: A. Organisation has single product and few
employees B. Organisation has a large variety of products and needs autonomy per product C.
Organisation wants zero duplication of resources D. Specialisation is not needed
8. In a divisional structure each division usually acts as a: A. Cost centre only B. Profit
centre C. Single function unit D. Temporary committee
9. Formal organisation is characterised by: A. Spontaneous social groups B. No written rules C.
Deliberately designed jobs, authority, and procedures D. Unplanned communication channels
10. Informal organisation: A. Is created by top management B. Follows written rules strictly C.
Emerges from social interaction among employees D. Eliminates need for formal organisation
11. Delegation means: A. Upward transfer of authority B. Sideways transfer of responsibility C.
Downward transfer of authority from superior to subordinate D. Removal of superior’s
accountability
12. Which of the following cannot be delegated? A. Authority B. Responsibility C.
Accountability D. Work
13. In delegation, authority flows: A. Downward from superior to subordinate B. Upward from
subordinate to superior C. Laterally among peers D. Randomly
14. Responsibility in delegation flows: A. Downward B. Upward C. Lateral D. Circular
15. Accountability is: A. Delegable to subordinates B. The obligation to perform a task C.
Answerability for the outcome and flows upward D. The same as authority
16. A key benefit of delegation is: A. Increasing manager’s routine work B. Preventing
subordinate development C. Freeing manager to focus on higher priorities and developing
subordinates D. Removing accountability
17. Decentralisation is best described as: A. Elimination of all top managers B. Systematic
dispersal of decision-making authority to lower levels C. Narrow span of management D. Same as
centralisation
18. Which is a benefit of decentralisation? A. Slower decision making B. Relief to top
management and quick decisions near points of action C. Complete elimination of controls D.
Guaranteed absence of inter-departmental conflict
19. Centralisation implies: A. Decision making retained at higher levels B. All decisions made
by lowest levels C. No management hierarchy D. Always better organisational performance
20. Which is a correct pair about formation? A. Functional — formation based on product lines
B. Divisional — formation based on functions C. Functional — formation based on functions D.
Divisional — formation based on geography only
 21. One disadvantage of divisional structure is: A. Easy fixation of responsibility B.
Duplication of resources across divisions (higher cost) C. Product specialisation D. Faster
decision making
22. Formal organisation gives emphasis to: A. Interpersonal relationships over work B. Work to
be performed, not interpersonal relationships C. Ignoring job descriptions D. Eliminating rules
23. Informal organisation can be used by management to: A. Replace formal systems B. Gather
support and quick feedback (compensate formal inadequacies) C. Eliminate formal communication
channels D. Force employees to follow more rules
24. Which statement is true about authority: A. It arises by virtue of personal qualities only
B. It originates from formal position and is higher at top levels C. It flows upwards from
subordinates D. It is unrestricted by laws or rules
25. Which of the following is NOT listed as importance of organising? A. Division of work B.
Clarity in reporting relationships C. Optimum utilization of resources D. Guarantee of zero
employee turnover
26. A company that wants autonomy per product and accountability for each product should
prefer: A. Functional structure B. Divisional structure C. Informal organisation only D.
Centralisation
27. Which element is needed so that an employee with responsibility can perform a job
effectively? A. More accountability than authority B. Authority commensurate with
responsibility C. Responsibility without authority D. No delegation
28. Which is a limitation of formal organisation? A. Unity of command B. Procedural delays and
inadequate recognition of creativity C. Clear fixation of responsibility D. Effective
accomplishment of goals
29. Which is true about decentralisation in the chapter? A. It is always harmful and should be
avoided B. It is an optional policy decision and must be balanced with centralisation C. It
removes need for measurements and MIS D. It always results in organisational disintegration
30. Which management tool is mentioned as evolving in response to decentralisation to measure
performance? A. Balanced scorecard and management information systems (MIS) B. Only annual
reports C. No measurement tools required D. Social media feedback exclusively
Answer Key:
1.B 2.C 3.B 4.C 5.C 6.C 7.B 8.B 9.C 10.C
11.C 12.C 13.A 14.B 15.C 16.C 17.B 18.B 19.A 20.C
21.B 22.B 23.B 24.B 25.D 26.B 27.B 28.B 29.B 30.A

Generated from Chapter 5: Organising (provided PDF). All content strictly from that chapter.