Organising

2.1 Core concepts

• Meaning of organising: A process that coordinates human efforts, assembles resources, and integrates both into a unified whole to achieve specified objectives; it translates plans into action by clarifying jobs, working relationships, and deploying resources (NCERT §Meaning, p. 110–111).
• Definitions (Louis Allen, Theo Haimann): Allen — "process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing relationships." Haimann — "process of defining and grouping the activities of the enterprise and establishing authority relationships among them" (NCERT box, p. 111).
• Steps in the process of organising: (i) Identification and division of work, (ii) Departmentalisation (grouping similar activities; basis can be territory or products), (iii) Assignment of duties (match job and ability; each department under one charge), (iv) Establishing authority and reporting relationships (creates hierarchy and coordination) (NCERT §Steps, p. 111–112).
• Importance of organising (seven points): (i) Benefits of specialisation, (ii) Clarity in working relationships, (iii) Optimum utilisation of resources, (iv) Adaptation to change, (v) Effective administration, (vi) Development of personnel (through delegation), (vii) Expansion and growth (NCERT §Importance, p. 112–114).
• Organisation structure: Framework within which managerial and operating tasks are performed; outcome of the organising process; shown in an organisation chart; shaped by the span of management (number of subordinates a superior can effectively manage) (NCERT §Organisation Structure, p. 114–115). Drucker quote — "organisation structure is an indispensable means; and the wrong structure will seriously impair business performance and even destroy it" (p. 114).
• Functional structure: Grouping of jobs of similar nature under functions (e.g., production, purchase, marketing, accounts, personnel) as separate departments reporting to a coordinating head (NCERT §Functional structure, p. 115–116).
• Advantages: occupational specialisation, control and coordination within department, increased managerial/operational efficiency and profit, minimal duplication leading to economies of scale, easier training, due attention to each function (p. 116).
• Disadvantages: functional empires / overemphasis on departmental objectives, coordination problems across functions, conflict of interests between departments, inflexibility/narrow perspective, functional heads do not get diverse experience for top management (p. 116–117).
• Suitability: large organisation with diversified activities where operations need high specialisation (p. 117).
• Divisional structure: Organisation comprises separate self-contained business units/divisions, usually by product line; each headed by a divisional manager with authority over the unit; each division is multifunctional and works as a profit centre (NCERT §Divisional Structure, p. 117).
• Advantages: product specialisation aiding development of divisional heads for higher posts, accountability of divisional heads for profits, flexibility and fast decision making (autonomous unit), facilitates expansion (add another division) (p. 117–118).
• Disadvantages: conflict among divisions over funds, duplication of activities and higher costs, divisional managers may gain power and ignore organisational interests (p. 118–119).
• Suitability: firms producing a large variety of products using different resources; growing firms adding employees, departments and levels (p. 119).
• Comparative view (Functional vs Divisional): Formation (function vs product+function), Specialisation (functional vs product), Responsibility (difficult vs easy to fix), Managerial Development (limited vs better), Cost (economical vs costly due to duplication), Coordination (difficult for multi-product vs easy within a product) (NCERT Table, p. 119).
• Formal organisation: Structure designed by management to achieve goals; specifies authority/responsibility boundaries and systematic coordination; structure can be functional or divisional (NCERT §Formal and Informal Organisation, p. 121–122).
• Features: specifies relationships among positions; means to achieve plan objectives via rules/procedures; coordinates departmental efforts; deliberately designed by top management; emphasises work over interpersonal relations (p. 122).
• Advantages: easier to fix responsibility, no role ambiguity, unity of command, effective accomplishment of goals, stability (p. 122).
• Limitations: procedural delays, inadequate recognition of creativity, does not give complete picture of human relationships (p. 122–123).
• Informal organisation: "Network of social relationships among employees" arising from interaction beyond officially defined roles (NCERT §Informal Organisation, p. 123).
• Features: originates within formal organisation through personal interaction; standards from group norms; independent communication channels; emerges spontaneously; no definite structure (p. 123).
• Advantages: faster spread of information and feedback, fulfils social needs and job satisfaction, fills inadequacies of formal organisation (p. 124).
• Disadvantages: rumour-spreading can be destructive, may resist management changes, pressures members to conform to group norms (p. 124–125).
• Formal vs Informal — Comparative table: Meaning, Origin (rules vs social interaction), Authority (position vs personal qualities), Behaviour (rules vs no set pattern), Flow of communication (scalar chain vs any direction), Nature (rigid vs flexible), Leadership (managers vs chosen by group) (NCERT Table, p. 124).
• Delegation: Downward transfer of authority from a superior to a subordinate; prerequisite for efficient functioning; manager remains accountable; authority can be taken back and redelegated (NCERT §Delegation, p. 125).
• Elements of delegation:
• (i) Authority — right of an individual to command subordinates and take action within scope of position; flows top to bottom; restricted by laws and rules; arises from formal position (p. 126–127).
• (ii) Responsibility — obligation of a subordinate to properly perform the assigned duty; flows upward; arises from superior-subordinate relationship; authority must be commensurate with responsibility (p. 127–128).
• (iii) Accountability — answerability for the final outcome; cannot be delegated; flows upward; enforced through regular feedback (p. 128).
• Summary: "authority is delegated, responsibility is assumed, accountability is imposed" (p. 128).
• Importance of delegation: (i) Effective management, (ii) Employee development, (iii) Motivation of employees, (iv) Facilitation of growth, (v) Basis of management hierarchy, (vi) Better coordination (NCERT §Importance of Delegation, p. 128–130).
• Decentralisation: Delegation of authority throughout all the levels of the organisation; decision-making authority pushed down the chain of command (NCERT §Decentralisation, p. 130).
• Centralisation vs Decentralisation: Centralised — decision-making retained by higher management. Decentralised — authority delegated to lower levels. No organisation is fully centralised or decentralised; both co-exist (NCERT, p. 130–131). Organising is not a one-time activity — it must be re-done whenever the firm grows, restructures, enters new markets, or shifts strategy (NCERT §Organising, p. 110-111). This dynamism links organising to the next-stage functions: staffing fills the positions created by organising; directing energises the people in those positions; and controlling measures whether the structure is producing the intended results. Organising operates simultaneously at multiple levels — the same logic of dividing work, departmentalising, assigning duties and establishing reporting relationships repeats inside every division, every department, and even every project team. This nested character makes the four-step process "scale-invariant" and applicable equally to a five-person start-up and to a 100,000-employee conglomerate. On the extremes of decentralisation: excessive centralisation leads to slow decisions, overload at the top, loss of initiative at lower levels and rigid responses to environmental change. Excessive decentralisation leads to lack of unified action, inter-divisional conflict, expensive duplication and loss of overall control. Decentralisation is therefore a philosophy rather than a binary choice — a stance the management adopts about how much autonomy to confer at each level. The Drucker quotation — "the wrong structure will seriously impair business performance and even destroy it" — is the line CUET examiners most often pick for fill-in-the-blank or attribution items.
• Importance of decentralisation: (i) Develops initiative among subordinates, (ii) Develops managerial talent for the future, (iii) Quick decision making, (iv) Relief to top management, (v) Facilitates growth, (vi) Better control (NCERT §Importance, p. 131–133).
• Delegation vs Decentralisation — Comparative table: Nature (compulsory act vs optional policy), Freedom of action (less vs more), Status (process vs result of policy decision), Scope (narrow — superior and immediate subordinate vs wide — to lowest level), Purpose (lessen burden vs increase role of subordinates) (NCERT Table, p. 134).

2.2 Definitions to memorise

2.3 Diagrams / processes to remember

• Functional Structure chart (p. 115) — Managing Director at top with Human Resources, Marketing, Research and Development, Purchasing as functional heads.
• Divisional Structure chart (p. 118) — Managing Director at top with Cosmetics, Garments, Footwear, Skin care divisions; each division supported by its own HR, Marketing, R&D, Purchasing.
• ONGC Organisation Chart (p. 120) — Real-world divisional/functional hybrid showing C&MD with multiple directors (Offshore, Onshore, Exploration, HR, Tech & Field Services, Finance) and centralised services.
• Elements of delegation overview table (p. 128) — Authority (right; delegable; from formal position; downward), Responsibility (obligation; not entirely delegable; from authority; upward), Accountability (answerability; not delegable; from responsibility; upward).
• Four-step process of organising (p. 111–112) — Identification & division of work → Departmentalisation → Assignment of duties → Establishing authority & reporting relationships.

2.4 Common confusions / NTA trap points

• Authority vs Responsibility vs Accountability: authority flows downward and can be delegated; responsibility flows upward and cannot be entirely delegated; accountability flows upward and cannot be delegated at all (p. 128).
• Delegation vs Decentralisation: Delegation is a compulsory process between a superior and immediate subordinate (narrow scope); decentralisation is an optional policy extending delegation to the lowest level (wide scope) (p. 134).
• Functional vs Divisional: Functional groups by function (specialisation, economical, but difficult to fix responsibility); divisional groups by product (accountability is easy, but costly due to duplication) (p. 119).
• Formal vs Informal authority origin: Formal authority arises from position; informal authority arises from personal qualities (p. 124).
• Span of management determines the levels of management in the structure — not the number of departments (p. 115).
• The NCERT explicitly says "authority is delegated, responsibility is assumed, accountability is imposed" (p. 128) — distractor traps often swap these verbs.
• Span of management vs Scalar chain — span = subordinates per superior; scalar chain = vertical line of authority. CUET item-writers conflate these.
• Functional vs Divisional suitability — functional suits single-product, large operations; divisional suits multi-product firms or growing organisations.
• Six importance of organising vs five steps in organising process — different lists; do not conflate.

2.5 Case examples

• Wipro divisional structure (NCERT opening case, p. 109) — Wipro separated into telecommunications, engineering, financial services and other product-line divisions, each self-sufficient. The canonical Indian example of divisional structure in NCERT — almost every CUET case-based item on organising structure draws from this case.
• ONGC functional-divisional hybrid (NCERT chart, p. 120) — Oil and Natural Gas Corporation's chart shows C&MD at top with multiple directors (Offshore, Onshore, Exploration, HR, Tech & Field Services, Finance) — a real-world hybrid that illustrates how large Indian PSUs combine functional and divisional logic.
• Tata Group's decentralised structure (NCERT context, Decentralisation §) — Tata Sons holding company with operating subsidiaries (Tata Steel, Tata Motors, TCS) each with substantial decision-making autonomy illustrates Louis Allen's "systematic effort to delegate to the lowest level".
• Maruti Suzuki's plant-wise organisation (NCERT context, Functional §) — Maruti's plants are functionally organised (production, quality, finance, HR) under one MD. The Maruti case grounds the "functional specialisation + economies of scale" advantage of functional structure.
• Informal organisation in any Indian factory canteen (NCERT context, Informal §) — NCERT uses everyday workplace social interaction (canteen conversations, smoke-break friendships) to illustrate informal organisation: spontaneous, no defined structure, leadership by personal qualities.

Q1. Which of the following is not a step in the process of organising?

(A) Identification and division of work (B) Departmentalisation (C) Establishing authority and reporting relationships (D) Setting standards of performance

Answer: D Source: NCERT §Steps in the Process of Organising, p. 111–112 Explanation: The four steps are identification & division of work, departmentalisation, assignment of duties, and establishing authority/reporting relationships. "Setting standards of performance" belongs to the controlling function, not organising.

Q2. the number of subordinates that can be effectively managed by a superior is referred to as:

(A) Chain of command (B) Span of management (C) Departmentalisation (D) Scalar chain

Answer: B Source: NCERT §Organisation Structure, p. 115, paragraph beginning "The span of management..." Explanation: Span of management is "the number of subordinates that can be effectively managed by a superior"; it determines the levels of management in the structure.

Q3. Assertion (A): In a functional structure, fixing responsibility on a particular department is difficult.

Reason (R): In a functional structure, formation is based on functions and information has to be exchanged across functionally differentiated departments.

(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

Answer: A Source: NCERT §Functional structure — Disadvantages and Comparative Table, p. 116, 119 Explanation: The comparative table lists "Difficult to fix on a department" under Responsibility for functional structure, because coordination is hard when information has to flow across functionally separated departments.

Q4. Match the following elements of delegation with their correct description:

(A) (i)-(2), (ii)-(3), (iii)-(1) (B) (i)-(1), (ii)-(2), (iii)-(3) (C) (i)-(3), (ii)-(2), (iii)-(1) (D) (i)-(2), (ii)-(1), (iii)-(3)

Answer: A Source: NCERT §Elements of Delegation, p. 126–128 Explanation: Authority is the right to command (p. 126); responsibility is the obligation to perform (p. 127); accountability is answerability that cannot be delegated (p. 128).

Q5. Which of the following is an advantage of divisional structure but not of functional structure?

(A) Occupational specialisation (B) Product specialisation that prepares the divisional head for higher positions (C) Minimal duplication of effort (D) Easier training of employees

(A) (A) (B) (B) (C) (C) (D) (D)

Answer: B Source: NCERT §Divisional Structure — Advantages, p. 117, point (a) Explanation: Product specialisation, by giving the divisional head experience in all functions of a product line, is a divisional-structure advantage. Options A, C and D are explicitly listed as functional-structure advantages (p. 116).

Q6. Which of the following statements about informal organisation is correct?

(A) It is deliberately designed by the top management. (B) Authority arises by virtue of position in management. (C) Communication flows only through the scalar chain. (D) It emerges spontaneously from social interaction among employees.

Answer: D Source: NCERT §Informal Organisation — Features and Comparative Table, p. 123–124 Explanation: Informal organisation "emerges spontaneously and is not deliberately created by the management" and that authority "Arises out of personal qualities," not position. Options A, B and C describe formal organisation.

Q7. Case-based: Wipro separated itself into several subsidiaries by product line — telecommunications, engineering, financial services — each self-sufficient with its own accounting books, personnel and administrative functions. The type of organisational structure adopted by Wipro is:

(A) Functional structure (B) Divisional structure (C) Informal structure (D) Centralised structure

Answer: B Source: NCERT §Opening case "Way To Go, Wipro!" and §Divisional Structure, p. 109, 117 Explanation: Grouping into self-contained units along product lines (each multifunctional and self-sufficient) is the defining feature of a divisional structure, as explained on p. 117.

Q8. Which of the following is the correct sequence of the process of organising?

(A) Departmentalisation → Identification of work → Assignment of duties → Reporting relationships (B) Identification and division of work → Departmentalisation → Assignment of duties → Establishing authority and reporting relationships (C) Assignment of duties → Departmentalisation → Identification of work → Reporting relationships (D) Identification of work → Assignment of duties → Departmentalisation → Reporting relationships

Answer: B Source: NCERT §Steps in the Process of Organising, p. 111–112 Explanation: The steps run in exactly this order — first work is identified and divided, then grouped into departments, then duties are assigned to individuals, and finally authority/reporting relationships are established.

Q9. Which of the following statements about delegation and decentralisation is correct?

(A) Delegation is an optional policy; decentralisation is a compulsory act. (B) Delegation has wide scope extending to the lowest level; decentralisation is limited to the immediate subordinate. (C) Delegation is a compulsory act; decentralisation is an optional policy decision of top management. (D) In delegation there is less control by superiors; in decentralisation there is more control.

Answer: C Source: NCERT §Delegation and Decentralisation: A Comparative view, p. 134 Explanation: The comparative table explicitly states delegation is "a compulsory act because no individual can perform all tasks on his own" while decentralisation is "an optional policy decision … done at the discretion of the top management." Options A, B and D reverse this correctly stated relationship.

Q10. Which of the following is not an importance of decentralisation (NCERT §Importance)?

(A) Develops initiative among subordinates (B) Quick decision making (C) Relief to top management (D) Elimination of the need for any control systems

Answer: D Source: NCERT §Importance of Decentralisation, p. 131–133 Explanation: The six listed points are: develops initiative, develops managerial talent, quick decision making, relief to top management, facilitates growth, and better control (not elimination of control). Decentralisation "compels the management to innovative performance measurement systems" (p. 133).

Q11. According to NCERT, which element of delegation cannot be delegated at all?

(A) Authority (B) Responsibility (C) Accountability (D) Power

Answer: C Source: NCERT §Elements of Delegation, p. 128.

Q12. Statement I: Authority flows downward; responsibility flows upward.

Statement II: Accountability arises out of authority.

(A) Both statements are true (B) Statement I is true; Statement II is false (C) Statement I is false; Statement II is true (D) Both statements are false

Answer: B Source: NCERT §Elements of Delegation, p. 126-128. Explanation: Statement I is correct. Statement II is false — accountability arises out of responsibility, not authority.