Organising

Class 12 Business Studies · Business Studies Part I · Chapter 5

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CBSE Class 12 · Business Studies

Directing: 37 marks in 4 papers, the most
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  • 31 marks: Organising, a 6-marker every set
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CBSE Class 12 · Business Studies

Financial Markets: 26 marks, not in NCERT
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Summary

Organising is the management function of identifying and grouping the work to be done, assigning duties, establishing authority-responsibility relationships and allocating resources to achieve goals. The organising process involves identifying and dividing the work, departmentalisation, assigning duties and establishing reporting relationships. Its importance lies in the benefits of specialisation, clarity in working relationships, optimum use of resources, adaptation to change, effective administration, the development of personnel and the expansion and growth of the enterprise. Organising results in an organisation structure, which may be functional (grouping jobs of similar nature under functional departments) or divisional (grouping activities by product lines). The functional structure suits firms with a single product line, gives specialisation and economy, but can create departmental conflict; the divisional structure suits multi-product firms, fixes accountability and aids growth, but costs more and may lead to inter-divisional rivalry. A formal organisation is a deliberately designed structure of roles, while an informal organisation arises spontaneously from social interaction among employees; both have merits and limitations. Delegation is the downward transfer of authority and the entrustment of responsibility; its elements are authority, responsibility and accountability. Decentralisation is the systematic delegation of authority throughout the organisation, giving lower levels more decision-making power. Delegation reduces a manager's workload and develops subordinates, while decentralisation relieves top management, develops initiative and managerial talent and gives quicker decisions.

Meaning and process of organisingImportance of organisingFunctional and divisional structuresFormal and informal organisationDelegation of authorityDecentralisation

Key terms

Organising
Identifying and grouping work, assigning duties and establishing authority relationships to achieve goals.
Organisation structure
The framework of authority-responsibility relationships, either functional or divisional.
Formal organisation
A deliberately designed structure of roles and relationships to achieve organisational goals.
Informal organisation
A network of social relationships that arises spontaneously among employees.
Delegation
The downward transfer of authority and entrustment of responsibility from a superior to a subordinate.
Decentralisation
The systematic delegation of authority throughout all levels of the organisation.

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