Due to proper organizing and division of work, a company goes for systematic assignment of jobs among the employees, which importance of organizing is highlighted here?
a. Benefits of specialization
b. Clarity in working relationship
c. Adaptation to change
d. Effective administration
✔ Answer
a. Benefits of specialization
Deez Ltd. is a corporation that has recently adopted a decentralised management style. The company has developed rapidly, and lower-level management decisions are implemented, saving time because those making decisions are close to taking action. However, Denez’s chairman of Deez Ltd. recently met with the chairman of another manufacturing firm, who is also a good friend of Denez’s, and asked him how he would measure employee performance if he went with a decentralised method. Denez’s secretary calls him a few hours later and requests the list of works to be completed the next day. He tells him about all of the crucial duties that need to be completed.
Which aspect of decentralisation has been emphasised in the following case?
(a) Quick decision making
(b) Develops initiative among subordinates
(c) Facilitates growth and expansion
(d) Develops managerial talent for the future
✔ Answer
(a) Quick decision making
Assertion (A): Better control systems, such as balancing score cards and management information systems, are being developed.
Reason (R): One of the issues of decentralisation is performance accountability.
(a) Both A and R are correct and R is the correct explanation of A
(b) Both A and R are correct and R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
✔ Answer
(a) Both A and R are correct and R is the correct explanation of A
‘Delegation helps in developing the talents of the employees. It also has psychological benefits.’ Which Importance of delegation is highlighted in this statement?
a) Effective management
b) Employee development
c) Motivation of employees
d) Better coordination
✔ Answer
c) Motivation of employees
“It arises from a superior–subordinate relationship because the subordinate is bound to perform the duty assigned to him by his superior.” Which element of delegation is highlighted in this statement?
a) Authority
b) Responsibility
c) Accountability
d) All of these
✔ Answer
b) Responsibility
After delegating the job or the task to the subordinates, the manager
a) Is not accountable for the result of the assigned task
b) Is accountable for the result of the assigned task
c) Subordinate is responsible to the top management
d) None of these
✔ Answer
b) Is accountable for the result of the assigned task
Assertion (A): Specialization is encouraged by the functional structure.
Reason (R): In the case of a functional structure, each department must perform a specified function.
(a) Both A and R are correct and R is the correct explanation of A
(b) Both A and R are correct and R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
✔ Answer
(a) Both A and R are correct and R is the correct explanation of A
“Grouping of jobs of similar nature under functional and organising these major functions as separate departments.” Which organizational structure is highlighted in this line?
a) Functional structure
b) Divisional structure
c) Both a and b
d) None of these
✔ Answer
a) Functional structure
The level of management in the organizational structure is determined by
a) Authority
b) Responsibility
c) Span of management
d) All of these
✔ Answer
c) Span of management
Palian Ltd. specialises in the production of steel goods. The company’s goal is to make 250 goods per day. To accomplish this, all departments’ efforts are coordinated and linked, and authority-responsibility relationships between various job roles are established. There is a clear understanding of who is responsible for reporting to whom.
Identify the function of management highlighted in the above case.
(a) Planning
(b) Controlling
(c) Coordination
(d) Organising
✔ Answer
(d) Organising
Identify the types of organization discussed in the following cases:
1. Mountain cold storage has a well-defined structure of authority relationships. This structure is created after a lot of planning by the top level management.
2. Tanuj Drinks is an organisation which helps quench the thirst of people sitting on roadside and parks on Sundays. This organisation has originated from Mountain cold storage spontaneously.
3. An organisation holds its meeting according to the mood of the members. It has no set pattern of behavior.
4. An organisation which is run in Central Delhi is known for its rigid nature.
5. Cricket Club is an organisation in which the authority of the members, constituting it, is because of their positions in the management.
6. Translife is an organisation in which only the managers are the leaders.
✔ Answer
1. Formal Organisation. As it is a structure of authority relationships.
2. Informal Organisation. It emerged spontaneously from a formal organisation.
3. Informal Organisation. No set pattern of behaviour is there.
4. Formal Organisation. It has rigid nature.
5. Formal Organisation. Authority of the members is due to their position in the management.
6. Formal Organisation. Only managers because of their formal positions are leaders not because of their personal qualities.
Identify the type of organisation structure in the following cases:
1. Apexa Glue is a manufacturing company based upon functions and has important departments like HR, Marketing, Finance, etc.
2. Ravi runs a company in Hyderabad. The company is known for its product specialisation and has a lot of reputation in the market.
3. Nitin is an owner of a reputed manufacturing company. However in his firm it is difficult to fix responsibility on a particular department.
4. Archana is a dynamic CEO. In her organisation she allows for autonomy and opportunity to perform multiple functions. This had led to managerial development in her employees.
5. Rajiv Bulbs is a city based flourishing company. Recently it has won award for being the most economical company as the functions are not duplicated in it.
6. Synchronisation of efforts is easy in Sigma Tubelights Ltd. as all the related functions related to a particular product are integrated within one department.
✔ Answer
1. Functional structure
2. Divisional structure
3. Functional structure
4. Divisional structure
5. Functional structure
6. Divisional structure
Kaamna is a bright young management trainee. After six months of testing by her organisation she is given charge of her office as an assistant manager. She starts her job with a lot of enthusiasm but realises that it won’t be possible for her to continue without sharing her tasks. She keeps a secretary who takes orders from her. This has reduced her burden of work and has helped her to focus on priority assignments.
Which concept of management is discussed in the above case? Name two importance of this concept.
✔ Answer
The concept of management discussed above is ‘Delegation’.
Two importance of Delegation:
- Delegation helps in the development of employees.
- Delegation acts as the basis of management hierarchy.
“Authority can be delegated but accountability cannot.” Do you agree? Justify with example.
✔ Answer
Yes, I agree. According to the principle of complete responsibility, authority can be delegated but responsibility and accountability cannot be delegated. Hence the manager who delegates his authority will remain accountable and answerable to his own higher authority both for the responsibility he has assigned to his subordinate as well as for the act of his subordinate.
Example: Mr. A gets a target sale of 100 units of laptops in one month from his boss. Then he delegates authority to his subordinate Mr. B with the instruction to achieve the target. However Mr. B fails in achieving the target. In this case Mr. A cannot escape from his boss on the pretext that he had delegated the authority to Mr. B and hence he is not responsible for the failure. Here Mr. A will be accountable to his boss for non-achievement of the target sale as well as for any wrong steps taken by his subordinate Mr. B.
Rolling Eagle is an organised firm. The firm has been considered as one of the major producers of steel in the manufacturing industry. A group of people from foreign countries have come to India to find out the reason for their success. They found that there is proper utilisation of resources and this has led to a great control of management over every aspect. The company has reached this place after a lot of research and its application. Every person knows what he has to do and this has led to the achievement of great skill development at ‘per employee level’. The company has a monitoring cell which keeps track of all the major developments around. This has made it possible for the company to change itself according to the requirements of the outside environment.
In the above case which concept of management is highlighted? Discuss any three importance highlighted in the above case?
✔ Answer
The concept of management highlighted above is ‘Importance of Organising’.
Three importance of Organising indicated above:
- Optimum utilisation of resources and effective administration: “They found that there is proper utilisation of resources and this has led to great control of management over every aspect.”
- Basis of specialisation: “Every person knows what he has to do and this has led to the achievement of great skill development at ‘per employee level’.”
- Adaptation to change: “This has made it possible for the company to change itself according to the requirements of the outside environment.”
A company followed formal organisation culture in totality. It started facing lot of problems and delay in decision making. The workforce was also not motivated since they could not get their grievances redressed easily. The managers found it difficult to bring the necessary changes implemented as the employees stopped cooperating.
a. Do you think that the company need to bring changes in its organisation structure? Give reason.
b. Discuss the benefits company would derive from it.
✔ Answer
a. Yes, they do need to bring a change in its organisation structure by making use of informal structure as well. They are relying too heavily on the formal structure due to which employees are not able to fulfil their psychological needs.
b. Benefits of informal structure (any three):
- It helps in faster communication and decision making.
- It provides psychological satisfaction to employees.
- It helps in maintaining group cohesiveness and harmony.
- It acts as a channel of communication for sensitive issues.
Bunty opens a retail Mart in a local market. As he knows it will be impossible for him to handle all the work alone, so he appoints Neetu to perform routine tasks on his behalf thereby reducing his work load. As a result of this decision, Bunty is left with more time to concentrate on important matters. Besides, he recruits ten other persons as support staff. Five years later, as his business earns a good name for itself, he opens another outlet in the city. Considering Neetu's competence, he gives the independent charge of running the new outlet to her. Thereby empowering her autonomy in functioning of the outlet.
In the context of the above case:
(a) Identify the two concepts which reflects the transition in the role of Neetu in the above paragraph.
(b) Give any two differences between the two concepts as identified in Part (a) of the question.
(c) What are the factors that Bunty must consider while giving the independent charge of the new outlet to Neetu?
✔ Answer
(a) Delegation of authority and decentralisation of authority.
(b) Any two differences between delegation and decentralisation:
- Delegation is a compulsory act, while decentralisation is an optional policy decision.
- Delegation involves only superior-subordinate relationship, while decentralisation involves all levels of management.
(c) Bunty needs to be careful while selecting those decisions related to the outlet which will be taken by Neetu independently and those that will be retained with him. It is important to demarcate the decision-making power as complete decentralisation would imply the delegation of all decision-making functions to Neetu and this would obviate Bunty's role as the owner of the business.
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.
(i) In the above case which concept of management has been related to in the first paragraph of the case?
(ii) Which two advantages of this concept have been highlighted in the above case?
(iii) Which two elements of delegation have been highlighted in the second paragraph of the case?
(iv) Which one feature of the informal organisation has been opposed by the operations manager in the above case?
✔ Answer
(i) The concept of management highlighted in the first paragraph is
‘Decentralisation’.
“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.”
(ii) Two advantages of decentralisation highlighted:
- Development of initiative among subordinates: “The employees felt a lot of development in their skill of taking first steps to manage things on their own.”
- Developing managerial talent for the future: “The Company’s top management could now focus on new areas of innovation as the employees turned more reliable.”
(iii) Two elements of delegation highlighted in the second paragraph:
- Accountability: “The operations manager was held answerable for the assigned target.”
- Authority: “When he was questioned it was found that his right to command the workers was insufficient.”
(iv) The feature of informal organisation opposed here is that
“the standards of behavior originate from the group norms” which should not be the case in a formal organisation bounded by rules and procedures.
‘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.
1. Which type of organisation structure is discussed in the above case?
2. What type of specialisation exists in the above case in the organisation according to Situation 1?
3. What will be the outcome of Situation 2?
4. Why do you think the profit is increasing as given in Situation 3?
5. What will be the result of Situation 4?
✔ Answer
1. The type of organisation structure discussed is Functional Structure.
2. The type of specialisation in Situation 1 is Occupational Specialisation.
3. The outcome of Situation 2 will be increase in control and coordination.
4. The profit is increasing as given in Situation 3 as there is increase in managerial and operational efficiency.
5. The result of Situation 4 will be the resulting of economies of scale due to attainment of specialisation which will lead to lowering of cost.
Identify the type of organisation structure in the following cases:
1. A manager gains experience of all the related functions like HR, Marketing, Finance, etc.
2. A particular division may try to increase its profit at the cost of others in an organisation.
3. This type of structure is suitable for large business enterprises where several products are there for sale. It is easy to add new departments as new products are added.
4. The organisation believes in occupational specialisation and lays stress on specific functions.
5. In this type of organisation less focus is given on overall enterprise targets.
6. The size of organisation is large and there is a need for higher degree of specialisation.
7. There is a similarity of tasks within a department and more chances of control and coordination.
8. Problems of improper coordination may result as message will flow between functionally different departments.
9. There can be blame game as conflict of interests may arise between functionally different departments.
10. There are chances of flexibility and initiative as the departments function as autonomous units.
11. A manager supervises all the situations and functionalities related to a particular department. Here the authority is more than the other type of organisation structure.
12. The expansion and growth is easier as new units can be adjusted without disturbing the ongoing operations.
✔ Answer
1. Divisional structure
2. Divisional structure
3. Divisional structure
4. Functional structure
5. Functional structure
6. Functional structure
7. Functional structure
8. Functional structure
9. Functional structure
10. Divisional structure
11. Divisional structure
12. Divisional structure