Chapter organising: Organising Application Questions | business studies Class 12 CBSE

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Chapter organising: Organising Application Questions | business studies Class 12 CBSE | ByteNotes.in

Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 1

Applied Concept

Wipro Technologies separated itself into several subsidiaries by product line such as telecommunications, engineering and financial services. Each subsidiary has its own accounting books, personnel and administrative functions. With reference to this, identify the type of organisational structure adopted and explain why it was appropriate for Wipro.

Wipro adopted a divisional structure as it divided itself into separate business units based on product lines, with each subsidiary functioning as a self-contained profit centre with its own functional departments.
This was appropriate because Wipro was dealing with diversified activities across multiple product lines; divisional structure promotes flexibility and faster decision making through autonomy which supports its goal of becoming a global giant with customer-orientation.
The divisional structure allowed Wipro to decentralise authority to divisional managers, placing growth responsibility at the unit level. This enabled de-layering and empowered business leaders, directly matching the philosophy expressed by Premji.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 2

Applied Concept

A school principal asks twelve students to unload a shipment of books, stock the bookshelves and dispose of waste. Instead of letting each student work randomly, one student forms groups, divides the work, assigns each group a quota and develops reporting relationships. With reference to this example, explain the steps of organising undertaken.

Step 1 — Identification and division of work: The total task (unloading, stocking and disposing) was identified and divided into manageable activities among the twelve students to avoid confusion and share the burden.
Step 2 — Departmentalisation: Students were grouped based on the similarity of tasks they were to perform, forming functional groups for specific activities like stocking and disposal.
Step 3 — Assignment of duties and establishing reporting relationships: Each group was assigned a specific quota aligned with their abilities, and clear reporting relationships were established so each group knew who they were accountable to, ensuring coordinated effort.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 3

Applied Concept

Sunita opened a travel agency and divided all work into three subheads: operations (travel counsellor, reservation and ticketing, customer care), sales (accounts executive) and administration (book keeper, cashier, utility personnel). Identify the type of organisational structure and explain any two advantages it offers to Sunita.

Sunita has adopted a functional structure as she has divided work on the basis of functions — operations, sales and administration — each with specific employees performing related tasks.
Advantage 1: This structure leads to occupational specialisation; employees within each functional department perform similar tasks regularly, which improves their skills and efficiency — for example, the reservation and ticketing staff develop deep expertise.
Advantage 2: It ensures minimal duplication of effort as similar functions are not repeated across departments, and it ensures that each function such as administration or sales gets due attention, making management easy for a small growing agency.

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Application Question

Hard difficulty • Concept in a practical situation

Hard

Question 4

Applied Concept

The production manager asked the foreman to achieve a target production of 200 units per day but did not give him authority to requisition tools and materials from the stores department. Can the production manager blame the foreman if the target is not achieved? Explain with reference to the principle of delegation.

No, the production manager cannot blame the foreman because he violated a fundamental principle of delegation — authority and responsibility must be commensurate. The foreman was given responsibility without matching authority.
If responsibility assigned is more than authority, a person becomes ineffective; the foreman cannot be held accountable for failing to achieve targets if he cannot access the tools and materials necessary to fulfill his obligation.
Accountability implies being answerable for the final outcome, but this presupposes that the person has been given the authority to act; since authority was withheld, the foreman's inability to meet targets is a failure of the manager's delegation, not of the foreman.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 5

Applied Concept

Neha runs a shoe factory and plans to expand by diversifying into leather bags and western formal wear to become a complete corporate wear provider. Which type of organisational structure would you recommend and why?

A divisional structure is recommended for Neha's expanded business as it involves diversification into multiple product lines — shoes, leather bags and western formal wear — which require distinct expertise, resources and market approaches.
Divisional structure allows each product line (shoes, bags, formal wear) to function as a separate self-contained division with its own production, marketing and finance, enabling product specialisation and faster decision making suited to each line.
This structure facilitates expansion without disrupting existing operations; Neha can add a new divisional head and staff for each new product line, fix responsibility clearly on each divisional head for profitability, and measure performance independently per division.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 6

Applied Concept

Johnson and Johnson operates as 190 smaller companies, each focused on a specific product franchise or geographic area, combining the advantages of being big with the agility of smaller firms. With reference to this, explain how decentralisation has benefited Johnson and Johnson.

Decentralisation allowed each of the 190 companies to stay close to its customer and maintain short communication lines, enabling faster response to customer needs and local market conditions.
It accelerated the development of talent by giving managers at each affiliate the freedom and responsibility to operate independently, developing initiative and creating a pipeline of capable leaders.
Decentralisation combined the advantages of scale (being part of a multi-billion dollar corporation with shared resources) with the agility and focus of smaller firms — each affiliate generating multiple options for growth, facilitating expansion.

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Application Question

Hard difficulty • Concept in a practical situation

Hard

Question 7

Applied Concept

ONGC's functional management system led to delays exceeding a year for urgent field decisions, wrangling over shared responsibilities and group loyalties overriding task requirements. McKinsey recommended an asset-based divisional structure. Explain why a divisional structure was more appropriate for ONGC.

ONGC's functional structure caused coordination failures and slow decision making because functional heads shared responsibilities, leading to confusion and delays; a divisional (asset-based) structure placed clear responsibility on asset managers for performance.
Divisional structure allowed each asset team to be a self-contained unit with all necessary services vested in the asset manager, eliminating the wrangling over shared responsibilities that plagued the functional system.
With clearly defined responsibilities and procurement powers devolved to asset managers, decision making became faster, accountability was fixed unambiguously on each unit, and the structure became far more responsive to business and field needs.

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Application Question

Hard difficulty • Concept in a practical situation

Hard

Question 8

Applied Concept

A company manufacturing toys has been doing well with a functional structure. It now plans to diversify into electronic toys. With reference to the concept of organisational structure, which structure should it adopt and what specific benefits will it get from the change?

The company should adopt a divisional structure, creating separate divisions for traditional toys and electronic toys, as diversification into a new product category with different technology, markets and resources requires product-oriented organisation.
The divisional structure will allow the new electronic toys division to develop product specialisation independently, with its own production, marketing and R&D functions focused on the emerging electronic toys market, without disrupting the existing traditional toys division.
It facilitates accountability as divisional heads can be held responsible for their division's profitability; the company can leverage its brand across both divisions while granting each the flexibility and autonomy to pursue their distinct market opportunities.

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Application Question

Hard difficulty • Concept in a practical situation

Hard

Question 9

Applied Concept

A company set up in 1945 follows a formal organisation culture in totality. It faces delays in decision making, cannot adapt to changing environment, has unmotivated workforce who cannot vent grievances except through formal channels, and high employee turnover. Advise what changes it should make in its organisational structure.

The company should recognise and leverage the informal organisation that inevitably exists alongside its rigid formal structure; informal channels can allow employees to vent grievances and provide faster communication, addressing motivation and turnover issues.
It should move towards a more decentralised structure where lower-level managers are empowered to take operational decisions without traversing the entire formal chain of command, thereby reducing delays in decision making.
Introducing flexibility within the formal structure — allowing some deviation from rigidly laid down policies and creating mechanisms for creative input — will address the inadequacy in recognising talent and improve the company's ability to adapt to the changing business environment.

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Application Question

Medium difficulty • Concept in a practical situation

Medium

Question 10

Applied Concept

A manager in an organisation is handling all decisions himself, including routine operational matters, and is therefore overburdened. His subordinates feel underutilised and lack motivation. Explain how delegation can resolve this situation.

By delegating routine operational tasks to competent subordinates, the manager can free himself to concentrate on high-priority and strategic matters, directly addressing the problem of being overburdened.
Delegation will motivate the subordinates by building their self-esteem and confidence — when a superior entrusts a subordinate with a task it signals trust; this encourages subordinates to improve their performance and feel they are valued contributors.
Through delegation, subordinates get opportunities to utilise their talent, develop latent abilities and gain the experience needed for higher positions, removing feelings of underutilisation and preparing a pool of better future managers.

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Chapter organising: Organising | Application Questions

Neha runs a shoe factory and plans to expand by diversifying into leather bags and western formal wear to become a complete corporate wear provider. Which type of organisational structure would you recommend and why?

Johnson and Johnson operates as 190 smaller companies, each focused on a specific product franchise or geographic area, combining the advantages of being big with the agility of smaller firms. With reference to this, explain how decentralisation has benefited Johnson and Johnson.

A company manufacturing toys has been doing well with a functional structure. It now plans to diversify into electronic toys. With reference to the concept of organisational structure, which structure should it adopt and what specific benefits will it get from the change?

A manager in an organisation is handling all decisions himself, including routine operational matters, and is therefore overburdened. His subordinates feel underutilised and lack motivation. Explain how delegation can resolve this situation.

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