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75 MCQs 50 Flashcards Unit 5 · 7 marks weightage Updated April 2026
Ch 5 · Unit 5 · Part A

Chapter 5: Organising

Master the structure of organisations — formal vs informal, functional vs divisional, delegation of authority, and the principles of decentralisation. High-yield chapter for CBSE Class 12 Board exams.

▶ Practice Test — Ch 5 All BST Chapters

What is Organising?

Organising is the management function of identifying and grouping the work to be performed, defining and delegating authority and responsibility, and establishing relationships to enable people to work most effectively toward set goals. It converts plans into an action-ready structure by assigning the right work to the right person with the right authority.

The process of organising follows four steps: (1) Identification and division of work — the total work is broken down into manageable activities to avoid duplication and share the workload; (2) Departmentation — similar or related activities are grouped together into departments; (3) Assignment of duties — specific jobs are assigned to employees based on their skills and qualifications; (4) Establishing reporting relationships — the hierarchy is defined, creating the scalar chain that shows who reports to whom and how authority flows.

Why is Organising Important?

Key Concepts at a Glance

Element of Delegation
Delegation of Authority Delegation = assigning work + granting authority + creating accountability. Three elements: Authority (flows down), Responsibility (flows up), Accountability (cannot be delegated). Principle of Parity: authority must equal responsibility.
Element of Delegation
Authority vs Responsibility Authority = the RIGHT to give orders (flows downward). Responsibility = the OBLIGATION to perform the assigned duty (flows upward). Accountability = the ANSWERABILITY for results (cannot be delegated — delegator always remains answerable).
Organisation Structure
Functional Structure Departments by function: Production, Marketing, Finance, HR. Suitable for single-product, large firms. Advantages: specialisation, minimal duplication. Disadvantages: functional empire building, difficult inter-department coordination, hard to fix accountability.
Organisation Structure
Divisional Structure Departments by product/territory/customer — each division has its own functions. Suitable for multi-product firms. Advantages: quick decisions, clear accountability, develops general managers. Disadvantages: resource duplication, selfish attitude, costly.
Concept
Accountability (Cannot Be Delegated) When a manager delegates, the subordinate becomes accountable to the manager. But the manager remains accountable to his own superior. Accountability flows upward through all levels. No one can escape accountability by delegating to someone else.
Concept
Decentralisation Systematic delegation of authority to ALL levels of management — it is a policy, not just one act. Importance: develops initiative, relieves top management, speeds decisions, promotes growth. Contrast: Centralisation = authority concentrated at the top.

Sample MCQs — Chapter 5: Organising

1. Which of the following CANNOT be delegated?
  1. Authority
  2. Responsibility
  3. Accountability ✓
  4. Both authority and responsibility
Correct answer: C — Accountability is the obligation to answer to one's superior for the use of delegated authority and results achieved. Even when a manager delegates authority and responsibility to a subordinate, the manager remains accountable to his own superior for the final outcome. Accountability cannot be passed down the hierarchy.
2. Functional structure is most suitable for a company that:
  1. Produces multiple product lines and needs quick divisional decisions
  2. Is large in size but deals in a single product or limited product range ✓
  3. Has operations in multiple countries requiring regional autonomy
  4. Has just started operations and has fewer than 10 employees
Correct answer: B — Functional structure groups departments by function (production, marketing, finance). It is ideal for large organisations with a single product because it maximises specialisation and minimises duplication. For multi-product companies, a divisional structure is more appropriate.
3. [Case-based] A company assigns its new Branch Manager a target of ₹10 crore sales but gives him no budget to hire staff or run promotions. Which management principle is violated?
  1. Scalar chain
  2. Unity of direction
  3. Parity of authority and responsibility ✓
  4. Division of work
Correct answer: C — The principle of parity of authority and responsibility states that authority and responsibility must be co-equal. Here, the manager has been given a responsibility (₹10 crore target) without commensurate authority (budget, hiring power). Without authority, achieving the responsibility is impossible — this violates the parity principle.
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