MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Organising Class 12 MCQ Questions With Answers

Question 1.

……………….. is the process of dividing work into manageable activities and then grouping the activities which are similar in nature.

(A) Coordination
(B) Departmentalisation
(C) Organisation structure
(D) Delegation of authority
Answer:
(B) Departmentalisation

Explanation:
Once work has been divided into small and manageable activities, then those activities which are similar in nature, are grouped together. This process is called departmentalization. Departments can be created on the basis of products, functions and territory. This brings specialization in operation.

Question 2.

Which of the following importance of organising stimulates creativity amongst the managers?

(A) Development of personnel
(B) Optimum utilization of resources
(C) Expansion and growth
(D) None of the above
Answer:
(A) Development of personnel

Explanation:
Organising stimulates creativity amongst the managers. Effective delegation allows the managers to reduce their workload by assigning routine jobs to their subordinates.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 3.

Which of the following is not a benefit of organising?

(A) Clarity in working relationship
(B) Adaptation to change
(C) Expansion and growth
(D) Identification and obtaining competitive personnel O
Answer:
(D) Identification and obtaining competitive personnel O

Explanation:
The significance of the organising function mainly arises from the fact that it helps in the survival and growth of an enterprise and equips it to meet various challenges.

Question 4.

Which of the following importance of organising reduces the workload as well as enhances productivity?

(A) Clarity in working relationships
(B) Benefits of specialisation
(C) Adaptation to change
(D) Effective administration
Answer:
(B) Benefits of specialisation

Explanation:
Organising leads to a systematic allocation of jobs amongst the work force. This reduces the workload as well as enhances productivity because of the specific workers performing a specific job on a regular basis.

Question 5.

Which of the following statements is true about the organizing function of management?

(A) Departmentalisation is the first step in the process of organising.
(B) Organising discourages creativity amongst the managers.
(C) Organising allows a business enterprise to accommodate changes in the business environment.
(D) All of the above
Answer:
(C) Organising allows a business enterprise to accommodate changes in the business environment.

Explanation:
The process of organising allows a business enterprise to accommodate changes in the business environment. It allows the organisation structure to be suitably modified and the revision of inter-relationships amongst managerial levels to pave the way for a smooth transition.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 6.

Which of the following is not related to ‘Organising as a Process’?

(A) Initiates implementation of plAnswer
(B) Provides framework for performing managerial and operating tasks.
(C) Clarifies jobs and working relationship.
(D) Effectively deploys resources.
Answer:
(B) Provides framework for performing managerial and operating tasks.

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

Question 7.

In order to make the ‘Annual Day’ of the school a successful event, the Headmistress of the school segregated all the activities into task groups each one dealing with a specific area. For instance, decorations, refreshments, backstage support, etc. Each group was put under the charge of one teacher. Identify the function of management performed by the Headmistress by dividing the activities and assigning the duties?

(A) Planning
(B) Organising
(C) Staffing
(D) Directing
Answer:
(B) Organising

Explanation:
Organising essentially implies a process which coordinates human efforts, assembles resources and integrates both into a unified whole to be utilised for achieving specified objectives.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 8.

An IT company currently employing 5,000 people, plans to expand its business through diversification. It aims to become a global leader. To achieve this goal, it has started shifting to a decentralised management system from a centralized one.
Thus, function of management is being performed by the company to become a decentralised company.

(A) Directing
(B) Staffing
(C) Organising
(D) Planning 0
Answer:
(C) Organising

Explanation:
Organising facilitates growth and diversification of activities through clear division of work. It helps in developing a proper organisation structure and the extent and nature of decentralisation can be determined.

Question 9.

Match the STEPS in the process of organising in Column I with the appropriate EXPLANATION in Column II.

Column I Column I
(a) Identification and division of work (i) Dividing work into manageable activities
(b) Departmentalisation (ii) Establishing a hierarchical structure
(c) Assignment of duties (iii) Grouping similar activities together
(d) Establishing authority and reporting relationships (iv) Allocating jobs to the members of each department

(A) (ii),(iii),(iv),(i)
(B) (iii), (iv),(ii), (i)
(C) (i), (iii), (iv), (ii)
(D) (iv), (iii), (i), (ii)
Answer:
(C) (i), (iii), (iv), (ii)

Question 10.

……………… ensures that the heads of separate business units in the organisation are responsible for profit or loss of their unit and have authority over it.

(A) Span of management
(B) Divisional structure
(C) Functional structure
(D) Hierarchy of authority
Answer:
(B) Divisional structure

Explanation:
In a divisional structure, the organisation structure comprises of separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 11.

Which type of organisational structures is the most suitable when the size of the organisation is large and is producing one line of product?

(A) Functional
(B) Divisional
(C) Both (A) and (B)
(D) None of these
Answer:
(A) Functional

Explanation:
A functional structure is most suitable when the size of the organisation is large, has a diversified activities and operations require a high degree of specialisation.

Question 12.

Which of the following is a disadvantage of divisional structure?

(A) Conflict may arise among different divisions with reference to allocation of funds.
(B) More emphasis on departmental objectives.
(C) Leads to inter-departmental conflict.
(D) Leads to inflexibility.
Answer:
(A) Conflict may arise among different divisions with reference to allocation of funds.

Explanation:
Conflict may arise among different divisions with reference to allocation of funds and further a particular division may seek to maximise its profits at the cost of other divisions.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 13.

Which type of organisational structures is the most suitable for those business enterprises where a large variety of products are manufactured?

(A) Functional
(B) Divisional
(C) Both (A) and (B)
(D) None of the above
Answer:
(B) Divisional
Question 14.

Which of the following is an advantage of functional structure?

(A) Leads to occupational specialisation.
(B) Promotes control and coordination within a department.
(C) Helps in increasing managerial and operational efficiency.
(D) All of the above.
Answer
(D) All of the above.

Explanation:
A functional structure leads to occupational specialisation since emphasis is placed on specific functions. It promotes control and coordination within a department because of similarity in the tasks being performed. It helps in increasing managerial and operational efficiency and this results in increased profit.

Question 15.

Which of the following gives shape to the organisation structure?

(A)Extent of delegation
(B) Employee strength
(C) Span of management
(D) None of the above
Answer:
(C) Span of management
Explanation:
The span of management, to a large extent, gives shape to the organisational structure. Span of management refers to the number of subordinates that can be effectively managed by a superior. This determines the level of management in the structure.

Question 16.

Which of the following is true regarding Organisational Structure?

(A) Grouping of jobs of similar nature under functional structure and organising these major functions as separate departments creates a divisional structure.
(B) Span of Management determines the levels of management in the organisation structure.
(C) Divisional structure makes training of employees easier as the focus is only on a limited range of skills.
(D) All of the above
Answer:
(B) Span of Management determines the levels of management in the organisation structure.

Explanation:
Span of management refers to the number of subordinates that can be effectively managed by a superior. This determines the levels of management in the structure.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 17.

Yummy Foods Ltd. has its registered office in Lucknow, manufacturing unit in Kanpur and marketing department in Chandigarh type of organisational structure should be adopted by the company to achieve its objectives.

(A) Functional
(B) Divisional
(C) Both (A) and (B)
(D) Neither (A) nor (B)
Answer:
(A) Functional

Explanation:
An organisation structure formed by grouping together all activities into functional departments and putting each department under one coordinating head is called functional structure.

Question 18.

Match the STRUCTURE in an organisation in Column I with the appropriate EXPLANATION in Column II.

Column I Column II
(a) Organisation Structure (i) Grouping activities on the basis of products.
(b) Functional Structure (ii) Framework within which managerial and operating tasks are performed.
(c) Divisional Structure (iii) Grouping of simitar jobs and organizing them as separate departments.

(A) (ii), (iii), (i)
(B) (iii), (ii), (i)
(C) (ii), (i), (m)
(D) (iii), (i), (ii)
Answer:
(A) (ii), (iii), (i)

Question 19.

…………….. is the obligation of a subordinate to properly perform the assigned duty.

(A) Authority
(B) Responsibility
(C) Accountability
(D) None of these
Answer:
(B) Responsibility

Explanation:
Responsibility is the obligation of a subordinate to properly perform the assigned duty. It arises from a superior-subordinate relationship because the subordinate is bound to perform the duty assigned to him by his superior.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 20.

………………….. implies being answerable for the final outcome.

(A) Authority
(B) Responsibility
(C) Accountability
(D) None of these
Answer:
(C) Accountability

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

Question 21.

Which of the following importance of delegation establishes superior-subordinate relationship?

(A) Employee development
(B) Facilitation of growth
(C) Motivation of employees
(D) Basis of management hierarchy 10
Answer:
(D) Basis of management hierarchy 10

Explanation:
Delegation of authority establishes superior-subordinate relationships, which are the basis of hierarchy of management. It is the degree and flow of authority which determines who has to report to whom.

Question 22.

organisation is ………………….. when decision making authority is retained by higher management levels.

Answer:
(A) Centralised
(B) Decentralised
(C) Both (A) and (B)
(D) None of these
Answer:
(A) Centralised

Explanation:
Centralization refers to that organizational structure where decision-making power is confined to the top management, and the subordinates need to follow the instructions of their seniors.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 23.

Which of the following statements is incorrect?

(A) Superior-Subordinate relationship is the source of origin of ‘Responsibility’.
(B) Authority arises from the established ‘scalar chain’ which links various job positions and levels of an organisation.
(C) Centralisation leads to quick decision making.
(D) None of the above
Answer:
(C) Centralisation leads to quick decision making.

Explanation:
In centralisation, the top management directs the day to day operations, and the subordinates have to report directly to the senior management. At times when there is no managerial staff, the subordinates are unable to take immediate decisions, thus, resulting in slowing down of business operations.

Question 24.

Which of the following statements is not applicable to the concept of ‘Accountability’?

(A) It implies being answerable for the final outcome.
(B) It cannot be denied once authority has been delegated and responsibility has been accepted.
(C) It cannot be delegated.
(D) It flows downward.
Answer:
(D) It flows downward.

Explanation:
Accountability element of delegation refers to the answerability of a subordinate to his superior for the job or task that is assigned. Accountability flows in an upward direction, which means the subordinate is accountable to the superior.

Question 25.

“It refers to the right of an individual to command his subordinate and to take action within the scope of his position.” Which element of delegation is ‘ being referred to in the above statement?

(A) Accountability
(B) Responsibility
(C) Authority
(D) None of these
Answer:
(C) Authority

Explanation:
Authority is the power to complete an assigned task. Without authority a subordinate is unable to execute the task perfectly. In order to complete the task as is expected by the manager, the manager has to provide authority of executing that task to the subordinate.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising
Question 26.

Match the ELEMENTS of Delegation in Column I with the corresponding EXPLANATION in Column II.

Column I Column II
(a) Authority (i) Being answerable for the final outcome.
(b) Responsibility (ii) Right to take decisions inherent in a managerial position.
(c) Accountability (iii) Obligation of a subordinate to perform the assigned duty properly.

(A) (ii),(iii),(i)
(B) (iii),(ii),(i)
(C) (iii),(i), (ii)
(D) (ii), (i), (iii)
Answer:
(A) (ii),(iii),(i)

Assertion and Reason Based MCQs

Directions: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.

Question 1.

Assertion (A): Identification and division of work is the first step in the process of organising.
Reason (R): Organising involves identifying and dividing the work that has to be done in accordance with previously determined plAnswer

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
The organising function begins with the division of total work into smaller units. Each unit of total work is called a job.
The division of work into smaller jobs leads to specialization because jobs are assigned to individuals according to their qualifications and capabilities.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 2.

Assertion (A): Organising provides a clear description of jobs and related duties.
Reason (R): Organising stimulates creativity amongst the managers.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
Organising provides a clear description of jobs and related duties. This helps to avoid confusion and duplication, Clarity in working relationships enables proper execution of work.

Question 3.

Assertion (A): Organising leads to the proper usage of all material, financial and human resources. Reason (R): The proper assignment of jobs avoids overlapping of work and also makes possible the best use of resources.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Avoidance of duplication of work helps in preventing confusion and minimising the wastage of resources and efforts.

Question 4.

Assertion (A): It is essential for effective performance that a proper match is made between the nature of a job and the ability of an individual. Reason (R): It is not necessary to define the work of different job positions and accordingly allocate work to variou
employees.

Answer:
(C) (A) is true, but (R) is false.

Explanation:
Once departments have been formed, each of them is placed under the charge of an individual. Jobs are then allocated to the members of each department in accordance to their skills and competencies.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 5.

Assertion (A): A proper organisation structure is essential to ensure a smooth flow of communication and better control over the operations of a business enterprise.
Reason (R): An organisation structure provides the framework which enables the enterprise to function as an integrated unit by regulating and coordinating the responsibilities of individuals and departments. 0

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
The organisation structure can be defined as the framework within which managerial and operating tasks are performed, It specifies the relationships between people, 1 work and resources.

Question 6.

Assertion (A): Delegation of authority allows more time for managers to concentrate on the tasks that are of higher importance for the organisation. Reason (R): Delegation allows for changing of the routine work which brings a sense of freedom.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
By empowering the employees, the managers are able to function more efficiently as they get more time to concentrate on important matters. Freedom from doing routine work provides them with opportunities to excel in new areas.

Question 7.

Assertion (A): Authority refers to the official powers and position required to carry on any task.
Reason (R): Accountability refers to the obligation on the part of the subordinates, to whom responsibility and authority are granted to see to it that the work is done.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
When duties are assigned to subordinates then the required authority must also be conferred to him. The delegatee is fully answerable to his superior for performance of the task assigned to him. Thus, the superior ensures performance through accountability by his subordinate.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 8.

Assertion (A): Responsibility arises from a superior- subordinate relationship.
Reason (R): The subordinate is bound to perform the duty assigned to him by his superior.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Responsibility is the obligation of a subordinate to properly perform the assigned duty. It arises from a superior-subordinate _ relationship because the subordinate is bound to perform the duty assigned to him by his superior. Thus, responsibility flows upwards, i.e., a subordinate will always be responsible to his superior.

Question 9.

Assertion (A): Delegation helps in developing the talents of the employees.
Reason (R): Delegation does not facilitate the growth of the enterprise.

Answer:
(C) (A) is true, but (R) is false.

Explanation:
Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures. Trained and experienced employees are able to play significant roles in the launch of new projects by replicating the work ethos they have absorbed from existing units, in the newly set up branches.

Question 10.

Assertion (A): Functional structure makes training of employees easier as the focus is only on a limited range of skills.
Reason (R): Divisional heads are accountable for profits.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
Divisional heads are accountable for profits, as revenues and costs related to different departments can be easily identified and assigned to them. This provides a proper basis for performance measurement. It also helps in fixation of responsibility in cases of poor performance of the division and appropriate remedial action can be taken.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Case-Based MCQs

I. Read the following text and Answer:the questions given below:

‘Pappu Sweets Makers’ is a sweets making company which has turnover in crores. In order to manage the work in the organisation, the departments have been created on the basis of functions.
Examine the following situations of this organisation and give answers accordingly:

Situation 1: It is expected that employees who are performing similar tasks work under the same department. So the company now has HR, Marketing and Finance departments. The division is based on specific functions.
Situation 2: There are similarities in the tasks performed within the same department.
Situation 3: The profit is increasing month by month due to the success of this structure of the organisation.
Situation 4: There has been minimum duplication of efforts as the same department is taking care of single function.

Question 1.

Which type of organisation structure is discussed in the above case?

(A) Functional
(B) Divisional
(C) Linear
(D) None of these
Answer:
(A) Functional

Explanation:
A functional structure leads to occupational specialisation since emphasis is placed on specific functions. This promotes efficiency in utilisation of manpower as employees perform similar tasks within a department and are able to improve’ performance.

Question 2.

What will be the outcome of Situation 2 ?

(A) Increase in control and coordination
(B) Quick decision-making
(C) More initiatives
(D) Flexibility
Answer:
(A) Increase in control and coordination

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 3.

Why do you think the profit is increasing as given in Situation 3?

(A) Due to product specialisation
(B) Due to managerial and operational efficiency
(C) Due to flexibility
(D) Due to no repetition of tasks
Answer:
(B) Due to managerial and operational efficiency

Question 4.

What will be the result of Situation 4?

(A) Reduction in cost
(B) Increase in cost
(C) Stability to the organization
(D) None of the above
Answer:
(A) Reduction in cost

II. Read the following text and Answer:the questions given below:

Bimal, the owner of ‘Reliable Constructions’ decided to begin a campaign in order to create awareness among the residents for creating a clean and safe environment. In an effort to develop clean surroundings in the area, he formed a team of 20 members to list the different ways that can be adopted for keeping the area clean.

Different people had different suggestions, someone suggested to take the help of local residents including young children, one suggestion was to involve unemployed youth. The idea to take the help of volunteers was also given. A combination of the most effective strategies after evaluating all options was selected for implementation. To achieve the desired goals and objectives, various activities were identified like:

(i) Purchase of essential items like dustbins, garbage bags, brooms, phenyl, etc.
(ii) Door-to-door collection of garbage.
(iii) Recycling of garbage.
(iv) Disposal of garbage, etc.

Thus, an organisational design was chosen which grouped similar activities together in order to minimize duplication of effort. After identification and grouping of these activities, the work was allocated among the different members.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 1.

“To achieve the desired goal various activities were identified like:….” Which step does this represent in the process of organizing?

(A) Identification and division of work
(B) Departmentalisation
(C) Assignment of duties
(D) Establishing reporting relationships
Answer:
(A) Identification and division of work

Explanation:
The process of organising involves identifying and dividing the work that has to be done in accordance with previously determined plans The work is divided into manageable activities so that duplication can be avoided and the burden of work can be shared among the employees.

Question 2.

“Thus, an organisational design was chosen which grouped similar activities together in order to minimize duplication of effort.” Which organisational design is being referred to in this line?

(A) Functional
(B) Divisional
(C) Formal
(D) Informal
Answer:
(A) Functional

Question 3.

“Thus, an organisational design was chosen which grouped similar activities together in order to minimize duplication of effort.” Which step under the process of organizing is being referred to in this line?

(A) Identification and division of work
(B) Departmentalisation
(C) Assignment of duties
(D) Establishing reporting relationships
Answer:
(B) Departmentalisation

Explanation:
Once work has been divided into small and manageable activities then those activities which are similar in nature are grouped together. Such sets facilitate specialisation. This grouping process is called departmentalisation.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 4.

“After identification of different activities the work was allocated to different members.” Which step does this represent in the process of organizing?

(A) Identification and division of work
(B) Departmentalisation
(C) Assignment of duties
(D) Establishing reporting relationships
Answer:
(C) Assignment of duties

III. Read the following text and Answer:the questions given below:

Alpha Tonics is a progressive company which has achieved new records in the field of medicines. Recently the company decided to go for a major shift in policy decision by handing over the decision making authority to the lower most level of employees. For this the company went for a thorough planning. Within four months the positive results of this major policy decision was recognizable. The employees felt a lot of development in their skill of taking first step to manage things on their own. Some major newspapers also covered this development. The production of the company increased. The company’s top management could now focus on new areas of innovation as the employees turned more reliable.

One day it so happened that the company’s manufacturing branch in south could not fulfill even half of its production target and the operations manager was held answerable for the assigned target. He was called in the office. When he was questioned it was found that his right to command the workers was insufficient and it should have been more to create results. The management decided to listen to him and he was given more power. When he went to the shop floor he told the workers that the standard of behaviour of the workers should come from the official rules and procedures.

Question 1.

Which concept of management has been related to in the first paragraph of the case?

(A) Delegation
(B) Decentralisation
(C) Both (A) and (B)
(D) None of the above
Answer:
(B) Decentralisation

Explanation:
Decentralisation explains the manner in which decision making responsibilities are divided among hierarchical levels. Decentralisation refers to delegation of authority throughout all the levels of the organisation.

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

Question 2.

Which of the following advantages of decentralization have been highlighted in the above case?

(A) It helps in development of initiative among subordinates.
(B) It helps in developing managerial talent for the future.
(C) Both (A) and (B)
(D) None of the above
Answer:
(C) Both (A) and (B)

Question 3.

Which elements of delegation have been highlighted in the second paragraph of the case? (A) Accountability

(A) Accountability
(B) Authority
(C) Both (A) and (B)
(D) None of the above
Answer:
(C) Both (A) and (B)

Explanation:
Authority refers to the right of an individual to command his subordinates and to take action within the scope of his position. The concept of authority arises from the established scalar chain which links the various job positions and levels of an organisation. Accountability implies being answerable for the final outcome. Once authority has been delegated and responsibility accepted, one cannot deny accountability.

Question 4.

Which feature of the informal organisation has been opposed by the operations manager in the above case?

(A) The standards of behaviour originate from the group norms.
(B) Independent channels of communication without specified direction of flow of information are developed by group members.
(C) It emerges spontaneously and is not deliberately created by the management.
(D) None of the above.
Answer:
(A) The standards of behaviour originate from the group norms.

MCQ Questions for Class 12 Business Studies with Answers