business studies complete notes cbse class xii
What kind of problems students generally face while doing business studies? 1.Not able to memorise the points 2.Even after learning the points of different topics /chapters are mixed / confused / interchanged . 3.What to write to explain the points ? 4.How to present the answers in board exams to get good marks ? 5. Even after doing the full course not feeling confident.
Friday, 1 February 2019
Friday, 10 June 2016
CLASS 12 BUSINESS STUDIES NOTES/ NATURE AND SIGNIFICANCE OF MANAGEMENT HOTS (HIGHER ORDER THINKING QUESTIONS)-2
Q. 1. “Management involves creating an internal environment.” Explain.
Answer.
The internal environment of an organisation refers to its internal conditions, like the quality and quantity of the workforce, the production technology used, the resources available, the rules and regulations framed, etc.,which are essential for the smooth running of the enterprise. The modern approach to management suggests that management of a successful firm requires the creation of an internal environment which is conducive to changes in the external environment. Since a business operates in a dynamic environment, it is essential for its internal environment to be adjusted in accordance with the changes in the external environment. For example, suppose a company manufacturing consumer goods decides to manufacture electrical home appliances with in built transformers, as the technology for the same becomes available. In order to adopt the new production technology it becomes necessary to change the ‘internal environment’ of the company, i.e., to train the work-force accordingly, make arrangements for the infrastructure required for adopting the new technology, etc.
Answer.
The internal environment of an organisation refers to its internal conditions, like the quality and quantity of the workforce, the production technology used, the resources available, the rules and regulations framed, etc.,which are essential for the smooth running of the enterprise. The modern approach to management suggests that management of a successful firm requires the creation of an internal environment which is conducive to changes in the external environment. Since a business operates in a dynamic environment, it is essential for its internal environment to be adjusted in accordance with the changes in the external environment. For example, suppose a company manufacturing consumer goods decides to manufacture electrical home appliances with in built transformers, as the technology for the same becomes available. In order to adopt the new production technology it becomes necessary to change the ‘internal environment’ of the company, i.e., to train the work-force accordingly, make arrangements for the infrastructure required for adopting the new technology, etc.
CLASS 12 BUSINESS STUDIES NOTES/ NATURE AND SIGNIFICANCE OF MANAGEMENT HOTS (HIGHER ORDER THINKING QUESTIONS)-1
1. “Management is a set of functions directed towards the efficient and effective utilisation of resources in the pursuit of organizational goals.” Explain.
Answer.
Managers at all levels in an organisation, large or small, have to perform a series of functions, viz., planning,organizing, staffing, directing, controlling and coordinating in order to achieve the goals of the organisation. Planning refers to the process of anticipating future demands and conditions and accordingly laying down the organizational goals and suitable course of action. Organizing is the process of bringing together, the desired human, material and financial resources, designing organizational structure and creating authority responsibility relationships among employees at various levels. The managerial function of staffing relates to procurement,training and development of employees to meet the requirements of the organisation. The process of directing involves continuous guiding, supervising, leading and motivating of employees for execution of plans in the desired manner. Controlling ensures that the actual performance conforms to planned performance and timely corrective actions are taken if any deviations occur. Coordination is considered to be the key to management as it is inherent in all functions of management. Coordination is the deliberate effort of the managers to integrate and synchronize the work of various individuals, groups and departments in the pursuit of common goals. Underlying all these managerial functions are the two interrelated concepts of efficiency and effectiveness.According to Peter F Drucker, efficiency means, “doing things right” and effectiveness means, “doing the right thing”. Thus, efficient utilisation of resources means that the resources are being judiciously used and the output level is in conformation to the input level, whereas effectiveness refers to the ability and skill to determine appropriate goals, objectives and decisions which are vital for survival, growth and expansion of an organisation. Therefore, both managerial effectiveness and managerial efficiency go hand in hand as effectiveness without efficiency will only lead to increase in cost. Whereas efficiency without effectiveness will never lead to desired goals.
Answer.
Managers at all levels in an organisation, large or small, have to perform a series of functions, viz., planning,organizing, staffing, directing, controlling and coordinating in order to achieve the goals of the organisation. Planning refers to the process of anticipating future demands and conditions and accordingly laying down the organizational goals and suitable course of action. Organizing is the process of bringing together, the desired human, material and financial resources, designing organizational structure and creating authority responsibility relationships among employees at various levels. The managerial function of staffing relates to procurement,training and development of employees to meet the requirements of the organisation. The process of directing involves continuous guiding, supervising, leading and motivating of employees for execution of plans in the desired manner. Controlling ensures that the actual performance conforms to planned performance and timely corrective actions are taken if any deviations occur. Coordination is considered to be the key to management as it is inherent in all functions of management. Coordination is the deliberate effort of the managers to integrate and synchronize the work of various individuals, groups and departments in the pursuit of common goals. Underlying all these managerial functions are the two interrelated concepts of efficiency and effectiveness.According to Peter F Drucker, efficiency means, “doing things right” and effectiveness means, “doing the right thing”. Thus, efficient utilisation of resources means that the resources are being judiciously used and the output level is in conformation to the input level, whereas effectiveness refers to the ability and skill to determine appropriate goals, objectives and decisions which are vital for survival, growth and expansion of an organisation. Therefore, both managerial effectiveness and managerial efficiency go hand in hand as effectiveness without efficiency will only lead to increase in cost. Whereas efficiency without effectiveness will never lead to desired goals.
Sunday, 11 August 2013
BUSINESS STUDIES | CBSE Notes
BUSINESS STUDIES NOTES - VALUE BASED QUESTIONS -BY BODMAS CAREER ACDEMY
Unit -1 Nature and significance of Management
Q.1 A Cloth manufacturer distributes its defective product at free of cost (after getting them repaired from Nari Niketan at lower cost) to orphanage. Which values are being attested in this solution?
Ans. i) Fulfilness of social responsibility
ii) Help to needy class of society
iii) Employment to members of Nari Niketan
iv) Full utilization of defective product after improvement
Q.2 An organization has production, purchase, marketing, finance and human resource departments. All of them working together to achieve organizational goals. From your point of view which value which value is reflected here?
Ans. Co-Operation, Co ordination, do work with the help of each other.
Q.3 A manufacturer of fridge has used new technology in place of using harmful gases, which do not cause air pollution. Which value being followed here?
Ans. i) Environment Protection
ii) To fulfill social responsibility
Q.4 A production manager has directed his employees to put/throw different types of wastes like papers, plastics & chemicals in the respective earmarked dustbins. By this which value he want to inculcate among his employees?
Ans. i) Management of waste material
ii) Environment Protection
iii) To fulfill social responsibility
iv) Awareness in employees
v) hygienic working environment
Q.5 An industrial unit, working in a backward area opens schools for education at nominal cost for the children of its employees and local people. By this act which value is promoted here?
Ans. i) Helpful in increasing literacy rate
ii) Development of society
iii) Increase in Employment opportunities in backward areas.
Q.6 A factory established in a residential locality, uses machines creating heavy noise while running. Factory Manager always ready to provide financial help to local people. Due to noise pollution student can’t study properly and residence can’t sleep/work properly. The owners also know it. Which values are affected here?
Ans. i) Noise Pollution
ii) Bad effect on the health of employees
iii) Bad effect on the studies and health of children
iv) Development of society with financial help.
Q.7 A famous doctor charges high for consultation from his patients and refuses to treat the poor patients without consultation charges. He also pays attention to the medical representatives and agents of Pharma co. he takes gifts and commission also. In your view, is it professional behavior of doctor? Does he follow the code of conduct of doctor?
Ans. i) Disobey of professional code of conduct
ii) Not fulfilling social responsibilities
iii) To take care of poor patients also.
BUSINESS STUDIES NOTES - VALUE BASED QUESTIONS -BY BODMAS CAREER ACDEMY
BUSINESS STUDIES NOTES - VALUE BASED QUESTIONS -BY BODMAS CAREER ACDEMY
Unit -1 Nature and significance of Management
Q.1 A Cloth manufacturer distributes its defective product at free of cost (after getting them repaired from Nari Niketan at lower cost) to orphanage. Which values are being attested in this solution?
Ans. i) Fulfilness of social responsibility
ii) Help to needy class of society
iii) Employment to members of Nari Niketan
iv) Full utilization of defective product after improvement
Q.2 An organization has production, purchase, marketing, finance and human resource departments. All of them working together to achieve organizational goals. From your point of view which value which value is reflected here?
Ans. Co-Operation, Co ordination, do work with the help of each other.
Q.3 A manufacturer of fridge has used new technology in place of using harmful gases, which do not cause air pollution. Which value being followed here?
Ans. i) Environment Protection
ii) To fulfill social responsibility
Q.4 A production manager has directed his employees to put/throw different types of wastes like papers, plastics & chemicals in the respective earmarked dustbins. By this which value he want to inculcate among his employees?
Ans. i) Management of waste material
ii) Environment Protection
iii) To fulfill social responsibility
iv) Awareness in employees
v) hygienic working environment
Q.5 An industrial unit, working in a backward area opens schools for education at nominal cost for the children of its employees and local people. By this act which value is promoted here?
Ans. i) Helpful in increasing literacy rate
ii) Development of society
iii) Increase in Employment opportunities in backward areas.
Q.6 A factory established in a residential locality, uses machines creating heavy noise while running. Factory Manager always ready to provide financial help to local people. Due to noise pollution student can’t study properly and residence can’t sleep/work properly. The owners also know it. Which values are affected here?
Ans. i) Noise Pollution
ii) Bad effect on the health of employees
iii) Bad effect on the studies and health of children
iv) Development of society with financial help.
Q.7 A famous doctor charges high for consultation from his patients and refuses to treat the poor patients without consultation charges. He also pays attention to the medical representatives and agents of Pharma co. he takes gifts and commission also. In your view, is it professional behavior of doctor? Does he follow the code of conduct of doctor?
Ans. i) Disobey of professional code of conduct
ii) Not fulfilling social responsibilities
iii) To take care of poor patients also.
BUSINESS STUDIES
BUSINESS STUDIES NOTES - VALUE BASED QUESTIONS -BY BODMAS CAREER ACDEMY
Unit -1 Nature and significance of Management
Q.1 A Cloth manufacturer distributes its defective product at free of cost (after getting them repaired from Nari Niketan at lower cost) to orphanage. Which values are being attested in this solution?
Ans. i) Fulfilness of social responsibility
ii) Help to needy class of society
iii) Employment to members of Nari Niketan
iv) Full utilization of defective product after improvement
Q.2 An organization has production, purchase, marketing, finance and human resource departments. All of them working together to achieve organizational goals. From your point of view which value which value is reflected here?
Ans. Co-Operation, Co ordination, do work with the help of each other.
Q.3 A manufacturer of fridge has used new technology in place of using harmful gases, which do not cause air pollution. Which value being followed here?
Ans. i) Environment Protection
ii) To fulfill social responsibility
Q.4 A production manager has directed his employees to put/throw different types of wastes like papers, plastics & chemicals in the respective earmarked dustbins. By this which value he want to inculcate among his employees?
Ans. i) Management of waste material
ii) Environment Protection
iii) To fulfill social responsibility
iv) Awareness in employees
v) hygienic working environment
Q.5 An industrial unit, working in a backward area opens schools for education at nominal cost for the children of its employees and local people. By this act which value is promoted here?
Ans. i) Helpful in increasing literacy rate
ii) Development of society
iii) Increase in Employment opportunities in backward areas.
Q.6 A factory established in a residential locality, uses machines creating heavy noise while running. Factory Manager always ready to provide financial help to local people. Due to noise pollution student can’t study properly and residence can’t sleep/work properly. The owners also know it. Which values are affected here?
Ans. i) Noise Pollution
ii) Bad effect on the health of employees
iii) Bad effect on the studies and health of children
iv) Development of society with financial help.
Q.7 A famous doctor charges high for consultation from his patients and refuses to treat the poor patients without consultation charges. He also pays attention to the medical representatives and agents of Pharma co. he takes gifts and commission also. In your view, is it professional behavior of doctor? Does he follow the code of conduct of doctor?
Ans. i) Disobey of professional code of conduct
ii) Not fulfilling social responsibilities
iii) To take care of poor patients also.
Saturday, 10 August 2013
BUSINESS STUDIES NOTES -BY BODMAS CAREER ACADEMY- staffing -chapter 6
Staffing
The managerial function
of staffing is concerned with the management of human
resources in an organisation,The staffing function in an organisation is
closely related to and dependent on its organizational structure, which in turn
is dependent on the organizational goals. Hence, the efficiency of the staffing
function can be evaluated by the extent to which the organisation goals are
achieved. Managers at all levels are responsible for staffing. The board of
directors undertake staffing for selecting other top-level managers, who in
turn have staffing responsibilities for middle-level staff, and even the
lower-level supervisors have to assume staffing activities for appointment of
workers. Staffing involves filling in of job position not only for the present
but future also. In small organisations, the responsibility for staffing rests
with the line managers. In large organisations, staffing is handled by the
human resource department, which works closely with the line managers.
Meaning of staffing Staffing involves procurement, maintenance,
training and development of personnel to meet the current and
future needs of a business organisation. It is a continuous process in an
organisation.
Importance of staffing Staffing is the key to other managerial
functions, as the effectiveness of other functions like planning,
organizing and directing depends upon the competence of the personnel in
an organisation.
- Staffing helps in building a sound organisation, as it is concerned with regular selection, appraisal and development of personnel to facilitate organizational growth.
- Effective staffing helps to reduce the cost of human resource in an organisation.
- Staffing helps to adopt a holistic approach to functioning of people in an organisation.
- Staffing is essential to fill in the roles designed in the organizational structure.
- Staffing ensures that suitable people are hired for the organisation, as the quality of people procured affects the training and development programmes.
- Staffing helps to adopt a focused approach and use new techniques and methods.
Process of Staffing
- Manpower planning in both qualitative and quantitative terms is the first step in staffing.
- Job analysis involves systematic collection, analysis and interpretation of information related to various aspects of a specific job. It helps manpower planning.
- The next step is recruitment, which is the process of searching for prospective employees and stimulating them to apply for a job in the organisation.
- After recruitment, selection activities are undertaken to choose the most suitable person for the job.
- After selection, the selected candidates are placed on the job according to their work proficiency.
- At times, training is given to employees to increase their knowledge and skill for a particular job.
- After placement, induction or orientation training is carried out, which is
- concerned with introducing the new employees to the organisation and its procedures, rules and regulations.
- Next step is performance appraisal which is undertaken to evaluate the worth of an employee to an organisation. It facilitates training and development programme.
- On the basis of performance appraisal reports promotion or demotion decisions are taken and career planning of an employee is done.
- In order to obtain, retain and motivate employees it is important that the salary and wages paid to them are fair and competitive.
- Staffing process also involves making necessary provisions for events like resignation, retirement, death or retrenchment of employees.
Meaning of recruitment: Recruitment is the process of searching for
prospective employees and stimulating
them to apply for a job in the organisation.
- Internal sources of recruitment are promotion, transfer and layoff.
- External sources of recruitment are advertising sources, employee’s recommendation, employment agencies, campus, visits, casual or factory gate, waiting list, personnel consultants, and contractors.
Meaning of selection Selection is the process of carefully screening
the candidates who offer themselves for appointment so as to choose the
most suitable person for the job.
Steps involved in
selection
- First, the scrutiny of applications is done to shortlist the candidates who apparently fulfill minimum requirements of the job.
- Large organisations prefer to conduct a screening interview to ascertain whether the candidate fulfills the minimum requirements of a job.
- The filling of an application blank by a candidate is the third step in selection process.
- The fourth step in selection process relates to selection tests, which are conducted by organizations to measure the capability and competence of the candidates for job suitability.
- After a candidate has cleared the selection test he or she is called for an interview to assess his/her suitability for the job.
- If candidate is found suitable for a job, the organisation may contact his former employer and professional acquaintances to validate the candidate’s character, reputation, etc., for reference checking.
- Before a candidate is appointed he has to undergo a simple medical examination.
- The selection procedure comes to an end with the issue of an appointment letter to the selected candidate.
Types of selection tests
- Trade test is used for determining the candidate’s level of knowledge and skill about a particular job.
- Performance test involves assessing the prospective candidate’s competence by making him perform a specific job.
- Psychological tests help to measure the candidate’s emotional quotient, intelligence outlook, interest, etc.
Meaning of training Training is the process of
increasing the knowledge and competence of a worker for doing a particular job.
Need for training
- Training is an integral part of management process and is necessary at all levels within organizations of various types and sizes.
- Training of new employees is essential to make them ‘job fit’.
- Training helps to improve the quality and quantity of production as it enhances the employee’s knowledge and skills.
- Training helps to control cost of production by reducing wastage of resources due to mishandling or use of trial and error method.
- Training reduces the need for supervision. As a result, the supervisors may widen their span of control and spend more time on non-routine issues of the department.
- With the help of training, the best available methods of performing work can be standardized and taught to all the employees.
- Training helps the employees to develop their skill and competence and prospects within and outside the organisation.
- Training improves the staff morale and self-esteem as it increases job satisfaction.
- Training prepares and develops future managers and enables the organisation to depend on internal sources of recruitment for higher job.
- Training is essential to ensure safety of workers and reduce accidents at the workplace.
Meaning of on-the-job
training Under this method of
training, the workers are trained while they are put on their respective
jobs. They may be trained by their immediate superior or by
some senior experts. The important techniques used under on-the-job methods are vestibule training, coaching,
understudy, apprenticeship training, job rotation, induction and internship.
Meaning of off-the-job
training Under this method, the
employees are given training at a place away from the workplace by
experts. The different types of off-the-training methods are conference,
seminar, discussions, case study, role play and sensitivity analysis.
Meaning of development Development means growth of a person in all
respects. It has wider scope than training and is career-centered.
Meaning of compensation Compensation payable to employees means and
includes all the monetary and non-monetary payments that are made to the
workers as a reward of their services. Two methods of compensation are the
time-rate wage system and piece-rate wage system. Components of a good
remuneration system are salaries and wages, bonus, long-term income,
benefits and estate building plans.
Meaning of incentive. The term ‘incentive’ refers to an act or
promise that induces an individual
to desired behavior.
Forms of incentive
- Monetary incentives are directly or indirectly associated with money, like profit sharing, co-partnership, bonus, suggestion system and commission.
- Non-monetary incentives are ones which cannot be measured in terms of money, like supervisory relationships, assignment of challenging jobs, recognition, well-determined goals objectives, level of aspiration and participation in management and experience of achievement.
Meaning of time-rate
system Under this method, wages
are determined on the basis of time spent on the job Wage = number of hours worked X rate per hour or, Wage = number
of day worked X rate
Meaning of piece rate method Under this method, wages are determined
on the basis of output irrespective of time taken. Wage = number of units
produced X rate per unit. The two methods of piece-rate plan are straight
piece rate and differential
piece rate.
Meaning of incentive
bonus plans The incentive plans have
been designed to encourage workers towards higher productivity.
The methods of incentive bonus plans are Halsey plan, Rowan plan and Gantt
task.
Friday, 9 August 2013
BUSINESS STUDIES NOTES CBSE CLASS XII
4. Planning
Summary
Management begins with planning, as it makes the objectives of an
organisation clear and specific. Planning lays down the foundation for
effective management. It involves determining the future course of action on
the basis of purpose, knowledge and estimates.
Meaning of Planning
• Planning involves deciding and working out the details of an intended action in accordance with the anticipated future conditions to facilitate realization of organizational goals.
• Planning involves deciding and working out the details of an intended action in accordance with the anticipated future conditions to facilitate realization of organizational goals.
Features of Planning
• Planning is a purposeful activity, as it involves determining various decisions and actions to be performed for achieving the goals of the organisation.
• Planning provides the basis of all other managerial functions. This is referred to as the primacy of planning.
• Planning is pervasive in nature as it is required in organisation of varying sizes and types and at various levels.
• Planning should be flexible in nature to deal with any change in the business environment.
• Planning is a continuous process, as there is perpetual need to make plans, implement them, and also to review or revise them to meet the needs of an organisation.
• Planning is futuristic in nature, as it looks ahead and determines future course of action.
• Planning involves choice among various alternatives, to select the best possible course of action to achieve the organizational goals.
• Planning is an intellectual activity, as it involves logical and systematic thinking to determine the future course of action.
• Planning lends to efficiency in operation, as it involves careful thinking before doing, which helps to avoid needless action.
• Planning is a purposeful activity, as it involves determining various decisions and actions to be performed for achieving the goals of the organisation.
• Planning provides the basis of all other managerial functions. This is referred to as the primacy of planning.
• Planning is pervasive in nature as it is required in organisation of varying sizes and types and at various levels.
• Planning should be flexible in nature to deal with any change in the business environment.
• Planning is a continuous process, as there is perpetual need to make plans, implement them, and also to review or revise them to meet the needs of an organisation.
• Planning is futuristic in nature, as it looks ahead and determines future course of action.
• Planning involves choice among various alternatives, to select the best possible course of action to achieve the organizational goals.
• Planning is an intellectual activity, as it involves logical and systematic thinking to determine the future course of action.
• Planning lends to efficiency in operation, as it involves careful thinking before doing, which helps to avoid needless action.
Importance of Planning
• Planning makes objectives clear and specific, which ensures focused managerial activities.
• Planning makes activities meaningful, as both employees and managers coordinate and understand the importance of their activities towards the accomplishment of organizational goals.
• Planning reduces the risk of uncertainly by anticipating the future threats and opportunities and by making provisions to meet them in a desired manner.
• Planning facilitates decision-making, as both evaluation and selection of the best course of action are done on the basis of planned targets much in advance to avoid a situation in which hasty and ad hoc decisions have to be made.
• Planning facilitates coordination of various activities within and among the departments for achievement of common goals.
• Planning promotes creativity, as it stimulates planners to be innovative and creative in their approach to perform the present and future business operations.
• Planning provides the basis of control as it furnishes standards against which actual performance is measured.
• Planning leads to efficiency and economy, as the plans indicate clearly how the various tasks have to be done and how resource have to be utilised.
• Planning makes objectives clear and specific, which ensures focused managerial activities.
• Planning makes activities meaningful, as both employees and managers coordinate and understand the importance of their activities towards the accomplishment of organizational goals.
• Planning reduces the risk of uncertainly by anticipating the future threats and opportunities and by making provisions to meet them in a desired manner.
• Planning facilitates decision-making, as both evaluation and selection of the best course of action are done on the basis of planned targets much in advance to avoid a situation in which hasty and ad hoc decisions have to be made.
• Planning facilitates coordination of various activities within and among the departments for achievement of common goals.
• Planning promotes creativity, as it stimulates planners to be innovative and creative in their approach to perform the present and future business operations.
• Planning provides the basis of control as it furnishes standards against which actual performance is measured.
• Planning leads to efficiency and economy, as the plans indicate clearly how the various tasks have to be done and how resource have to be utilised.
Types of Plans
• Goals are the ambition, or future position, which an organisation seeks to realize through its existence and activities.
• Objectives are the ends which managers seek to reach through their managerial functions of planning, organizing, directing and controlling.
• Policies are the general statements that provide the framework for managerial decision-making and action.
• Procedures are the plans that determine the method or chronological sequence in which a particular activity must be performed in an organisation.
• Programmes are a complex of goals, policies, procedures, rules, tasks assignments, steps to be taken, resources to be employed and other elements necessary to carry out a given course of action supported by a budget.
• Rule is a specific and definite statement describing the action to be taken or to be avoided in a given situation.
• Method refers to a well-defined and specific way of performing the jobs of repetitive and routine nature.
• A budget is a statement of forecasted revenue and associated cost of any activity or project.
• Goals are the ambition, or future position, which an organisation seeks to realize through its existence and activities.
• Objectives are the ends which managers seek to reach through their managerial functions of planning, organizing, directing and controlling.
• Policies are the general statements that provide the framework for managerial decision-making and action.
• Procedures are the plans that determine the method or chronological sequence in which a particular activity must be performed in an organisation.
• Programmes are a complex of goals, policies, procedures, rules, tasks assignments, steps to be taken, resources to be employed and other elements necessary to carry out a given course of action supported by a budget.
• Rule is a specific and definite statement describing the action to be taken or to be avoided in a given situation.
• Method refers to a well-defined and specific way of performing the jobs of repetitive and routine nature.
• A budget is a statement of forecasted revenue and associated cost of any activity or project.
Wednesday, 7 August 2013
Saturday, 27 July 2013
business studies notes cbse class 12 -ORGANISING
5. Organizing
Summary
In general terms, ‘organizing’ refers to the systematic
arrangement of things and activities. However, in the context of management,
‘organizing’ may be interpreted in two ways—as a structure and as a process.
Meaning of organizing As a process, organizing is
concerned with the productive integration of human, physical and financial
resources to meet the goals of an organisation. As a structure, organizing
involves creating a structural framework within which the individual efforts
are coordinated to meet the needs of an organisation.
Importance of organizing and organizational structure
• Organizing lends to specialization, as the whole work is
sub-divided into specific activities and allocated to different Individuals.
• Organizing helps to create a well-defined structure of jobs,
as the roles and responsibilities of each job position are clearly defined in
the organizing process.
• Organizational structure clarifies the authority and power
associated with each job position in the organisation.
• Organizing helps to avoid duplication of work through a
clear-cut distribution of work between individuals and groups.
• Organizing facilitates: coordination between the various
levels of management by synchronizing the efforts of people at various levels.
• Organizing serves as a source of support and security by
assigning a definite job designation to each employee.
• Organizing facilitates
adaptation of a business to changes in external environment.
Process of organizing
• Division of work
is the first step in the organizing process. It
involves subdivision of the total work to be done into specific jobs to
promote specialization, efficiency and economy.
• Grouping of jobs, or departmentation, is the second step in
the organizing process. It relates to grouping similar jobs into departments on
the basis of functions, type of product, geographical area, etc.
• Establishing authority-responsibility relationships is the
third step in organizing process, involving the linking of all
jobs in a hierarchy by authority-responsibility relationships.
Structure of organisation
• An organizational structure is a system of job positions
reflecting the roles and responsibilities associated with each job position and authority
responsibility relation between them. The organizational structure appears like
a pyramid with a narrow top and wide bottom.
• The following factors
need to be
kept in mind
while designing an organizational structure job design, departmentation,
span of control and delegation of authority.
Types of organizational structure
• Functional structure is created by grouping the various
activities of an organisation on the basis of basic functions to be performed,
like finance, marketing, production and personnel.
• Divisional structure is created by grouping the various
activities to be performed in an
organisation on the basis of various product lines. It is useful in large and
diversified organisations.
Formal organisation
•
Formal organisation is a deliberately planned and created
structure of activities and authority-responsibility relationships to meet the
organizational goals.
Features of formal organisation
• It is deliberately
planned and created by management.
• It strives to
achieve organizational goals.
• It is rigid in
nature.
• It contains a
well-defined structure of authority and responsibility.
• It follows the
formal channel of communication, i.e., scalar chain.
Informal organisation
• Informal organisation is a
network of social relationships which arises
spontaneously from within a formal
organisation to meet the social and cultural
needs of its members.
Features of informal organisation
• It arises spontaneously from within a formal organisation as
a result of social interaction among members of the organisation.
• It strives to meet social and cultural needs of the members.
• It is flexible in nature.
• It is a complex network of human relationships.
• It follows informal channels of communication.
Delegation of Authority
The process by which a
manager shares some of his work and authority with his
subordinate is known as delegation
of authority.
Importance of delegation of authority
• Delegation of authority reduces the workload of managers, as
through delegation the manager shares his workload with his subordinates.
• It provides the basis for superior-subordinate relationships,
as grant of authority by superior to subordinates gives meaning to
superior-subordinate relationships.
• It improves managerial effectiveness, as by delegating
routine work to the subordinates, the managers can concentrate on important
matters.
• It motivates subordinates, as it gives them a sense of
importance and also an opportunity to apply their creativity and skill to their
job.
• It helps to develop managers, as it gives the subordinates an
opportunity to individually handle and solve managerial problems.
• It facilitates the growth of the organisation, as it develops
the potential of employees.
Elements of Delegation
• The three elements in the process of delegation are the
assignment of tasks, grant of authority and creation of responsibility and
accountability.
• The principle of delegation by results expected states that
there should be a relation between the results expected from a subordinate and
the amount of authority granted to him.
• Principle of parity of authority and responsibility states
that there should not be any disparity between
the authority granted to a
subordinate and responsibility imposed on him because responsibility without
authority makes the person ineffective and grant of excessive authority to
subordinates makes him misuse it.
• The principle of absolute responsibility states that
authority can be delegated but responsibility cannot be delegated by a
superior. The superior remains responsible, or accountable, to his superior for
the tasks which may be assigned to his subordinate. The responsibility of the
superior is absolute.
• The authority level principle states that before taking a
decision, a manager should ensure that he has due authority to take a decision
at his level and if he does not have authority to take decisions at his level,
he should refer to his superior.
Centralization of authority
• Centralization of authority refers to concentration of authority for decision-
making
and actions in the hands of a few managers at the higher level.
Decentralization of authority
• Decentralization of authority refers to the systematic delegation
of authority at all
levels of management and in all departments of the
organisation for decision-
making and actions appropriate at the respective
levels:
I Importance of decentralization: Decentralization helps an
organisation to cope
with changes, reduces the workload of managers,
facilitates growth of an
organisation, helps to develop managers, facilitates
decision-making, ensures
smooth running of an organisation and promotes
initiative and creativity.
Meaning and Importance of Organizing
Very-Short-Answer Questions
1. What is meant by
organizing?The managerial function of
organizing refers to
the process of integrating human, physical and financial resources
required to
meet the goals of an organisation. It also involves determining the
various
activities / jobs to be performed, grouping similar jobs into
departments, then
designing the organizational. Structure accordingly and
establishing authority-
responsibility relationships among various job
positions.
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