Chapter-5-Organising 

  • Board
    CBSE
  • Textbook
    NCERT
  • Class
    Class 12
  • Subject
    Business Studies
  • Chapter
    Chapter-5-Organising 
  • Chapter Name
    Chapter 5 Organising
  • Category
    CUET (Common University Entrance Test) UG

MCQ-Based Questions for CUET Business Studies Chapter-5-Organising 

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Practice Questions for CUET Business Studies chapter-5-Organising SET-1

Business Studies - MCQ on Organising

Class XII

Q.1. The organisation, which has officially designed structure, is called

a. formal organisation.

b. structure of the organisation premises.

c. informal organisation.

d. grapevine.

Answer:

(a)

Explanation: Formal organisation refers to a deliberately designed organization structure. Its objectives are well defined in advance.

Q.2. The function of management that enables delegation of authority is

a. organising.

b. planning.

c. staffing.

d. directing.

Answer:

(a)

Explanation: In the function of organising, an organisation structure is designed. After designing the organisation structure, it is necessary to connect them by the thread of authority and responsibility. This activity of connecting different positions of an organisation is called delegation of authority.

Q.3. The second function in the process of management is

a. organising.

b. planning.

c. directing.

d. controlling.

Answer:

(a)

Explanation: After deciding a course of action to achieve organisational goals, it is necessary to design an organisation structure, which will enable effective and efficient achievement of those organisational goals. This act of designing organisation structure is called organising, which is done right after planning.

Q.4. Scalar chain is also called

a. production chain.

b. chain of command.

c. marketing chain.

d. standardisation.

Answer:

(b)

Explanation: Scalar chain is the relation between different designations of an organisation. This relation is also called chain of command.

Q.5. The pattern of authority that helps in developing and increasing the number of efficient and competitive managers is called

a. centralisation.

b. unity of direction.

c. concentration of authority with top management.

d. decentralisation.

Answer:

(d)

Explanation: Decentralisation means spread of authority among different positions of an organisation. More and more people can be groomed by giving authority because people gain confidence and self-esteem, if they are given the opportunity to take decisions by themselves.

Q.6. The process of identifying and grouping various activities; bringing together physical, financial and other resources; and establishing authority relationships among job positions is called

a. planning.

b. organising.

c. staffing.

d. directing.

Answer:

(b)

Explanation: In the organising function of management, various activities to be performed are grouped and assigned to a position or designation. After assigning the work, an authority and responsibility relation is created among different positions.

Q.7. Delegation of authority means sharing

a. responsibility with subordinates.

b. accountability with subordinates.

c. authority with subordinates.

d. the informal organisation.

Answer:

(c)

Explanation: When an authority to do a task is shared with the subordinates, it is called delegation of authority. Delegation of authority involves delegation of responsibility and accountability also.

Q.8. The process in which a manager shares some of his work and authority with his subordinates is known as

a. centralisation.

b. functional foremanship.

c. delegation of responsibility.

d. delegation of authority.

Answer:

(d)

Explanation: Delegation of authority takes place when a manager assigns a part of his work to others and gives them the authority to perform those tasks.

Q.9. The channel of communication in an informal organisation is called

a. official chain of communication.

b. unity of command.

c. organisation structure.

d. grapevine.

Answer:

(d)

Explanation: In an informal organisation, communication doesn’t move through official chain of command. The channel of communication in an informal organisation is called grapevine.

Q.10. Dispersal of authority or decision-making power among various levels of management is called

a. centralisation.

b. delegation of authority.

c. decentralisation.

d. grapevine.

Answer:

(c)

Explanation: In decentralization, authority is not concentrated in few hands but is distributed throughout the organisation. In a big organisation, it is not possible for the owner to take all the decisions himself within time limit. Therefore, authority needs to be spread throughout the organisation hierarchy, so that respective departments can take their decisions on time and perform efficiently.

Q.11. Organisation structure comes into existence by

a. planning.

b. organising.

c. directing.

d. staffing.

Answer:

(b)

Explanation: Organising function of management defines the organisation hierarchy. This organisation hierarchy is called organisation structure.

Q.12. The transfer of authority form one executive to another is called

a. delegation of authority.

b. decentralisation.

c. centralisation.

d. concentration of authority.

Answer:

(a)

Explanation: Delegation of authority means sharing of authority with the subordinates.

Q.13. Grouping tasks and activities, assigning duties to these jobs and connecting these jobs by a formal line of authority and responsibility is a part of

a. planning.

b. staffing.

c. organising.

d. directing.

Answer:

(c)

Explanation: The process of organising starts with division of work and grouping similar activities into one department and designing organisation structure of the organisation. Authority and responsibility are then assigned to different positions.

Q.14. The second step in the process of delegation of authority is

a. assigning duties and tasks.

b. coordinating activities.

c. assigning authority.

d. coordinating activities.

Answer:

(c)

Explanation: Assigning authority to perform the tasks is the second step in the process of delegation of authority.

Q.15. The objective of informal organisation is

a. to achieve organisational objectives.

b. to increase production of all the departments.

c. to fulfil social and cultural needs of members, e.g., friendship, sense of attachment, esteem, etc.

d. to properly communicate organisational goals to the first line management.

Answer:

(c)

Explanation: Informal organisation comes into existence by mutual relations and friendship of the employees and not by deliberate efforts of the organisation. People form groups to enhance their social circle and sense of attachment to the organisation.

Q.16. The rules and regulations of a formal organisation are

a. prescribed in writing.

b. communicated verbally.

c. communicated by first line management to top management.

d. flexible.

Answer:

(a)

Explanation: Formal organisation is designed to achieve organisational objectives. For getting work done from subordinates, it is necessary to have the rules and regulations in writing.

Q.17. The pattern of authority that improves satisfaction and morale of lower level managers by satisfying their needs of freedom, initiative and participation is called

a. centralisation.

b. concentration of authority in top management.

c. unity of command.

d. decentralisation.

Answer:

(d)

Explanation: In the process of decentralisation, authority is delegated to subordinates and subordinates so that they can take quick decisions regarding urgent assignments. This improves their decision-making skills and groom them to be a better and more competent manager. They also start showing initiative by thinking creatively, and suggesting new and better ways of doing things.

Q.18. Global Pvt Ltd produces chemicals, textiles, cosmetics and soaps. The organisation structure appropriate for this type of organisation is

a. functional foremanship.

b. functional organisation.

c. informal organisation.

d. divisional organisation.

Answer:

(d)

Explanation: Divisional (product line) organisation structure is appropriate for Global Pvt Ltd because all the activities related to chemicals, textiles, cosmetics and soaps will be grouped under respective departments.

Q.19. Delegation of authority

a. reduces the burden of top management.

b. increases the burden of top management.

c. removes the top management from organisation hierarchy.

d. removes the lower management from the hierarchy.

Answer:

(a)

Explanation: Delegation of authority means assigning the work to subordinates and then transferring authority to do that work efficiently. In this way, the superiors are relieved of the burden of routine matters and they now concentrate on more important matters.

Q.20. In an informal organisation, authority flows

a. through chain of command.

b. vertically and horizontally.

c. through formal scalar chain.

d. outside the organisation.

Answer:

(b)

Explanation: In an informal organisation, there is no set movement of authority. It can move vertically or horizontally or even across the hierarchy.

Q.21. The pattern of authority distribution that enables growth and diversification of an enterprise is called

a. decentralisation.

b. centralisation.

c. concentration of authority with top management.

d. concentration of authority with middle management.

Answer:

(a)

Explanation: Decentralisation enables growth and diversification of an enterprise. It increases the number of decision makers in the organisation, thus fastening the process of diversification.

Q.22. One of the disadvantages of informal organisation is that

a. it creates sense of belongings.

b. it resists changes.

c. it provides support to formal organisation.

d. it gives relief from monotony.

Answer:

(b)

Explanation: In an informal organisation, employees start to live in comfort zone. In this way, they start resisting any kind of change even if that leads to better performance.

Q.23. The function of management that is necessary before staffing the personnel is

a. planning.

b. directing.

c. controlling.

d. organising.

Answer:

(d)

Explanation: It is not possible to hire people, if we don’t know the positions for which they are to be hired. Organising function of management provides the organisation with a set of hierarchy. This hierarchy is then manned by the staffing function.

Q.24. The sum total of all the delegations of authorities is called

a. centralisation.

b. Unity of direction.

c. unity of command.

d. decentralisation.

Answer:

(d)

Explanation: Delegation of authority means transfer of authority from one person to another person. Decentralisation is the end result of all the delegations of authorities.

Q.25. Delegations of authority means

a. transferring some part of the authority to subordinates.

b. transferring the whole authority to subordinates.

c. retaining the total authority by the manager.

d. transferring authority from subordinate to superior.

Answer:

(a)

Explanation: In delegation of authority, some part of the superior’s authority is transferred to subordinates, so that they can function effectively towards common objectives.

Q.26. Grouping of tasks and responsibilities is also known as

a. formal organisation.

b. departmentalisation.

c. functional foremanship.

d. organisation structure.

Answer:

(b)

Explanation: In departmentalisation, departments are formed by clubbing similar types of activities. Then, authority and responsibility are assigned to these departments for their proper functioning.

Q.27. Delegation of authority is based on the principle of

a. division of work.

b. functional structure.

c. centralisation.

d. concentration of powers on top management.

Answer:

(a)

Explanation: Authority is delegated to get the work done by those who specialise in the jobs delegated. In division of work, work is assigned to the employees who are experts.

Q.28. The informal organisation helps employees by

a. making them adhere to time schedules.

b. dividing the work.

c. communicating the official information.

d. creating a sense of belonging towards the organisation.

Answer:

(d)

Explanation: Informal organisation gives the employees a platform where they can share their feelings and views. This sharing gives them a sense of belonging because they get emotionally connected to the environment.

Q.29. One of the disadvantages of functional structure of organisation is that

a. it is based on products.

b. it increases specialisation.

c. it makes coordination difficult.

d. it gives more accountability.

Answer:

(c)

Explanation: Functional structure of organisation makes coordination difficult. As the organisation grows, departments may also become too large causing a delay in decision-making and making coordination difficult.

Q.30. The organisational structure in which each major or basic function such as marketing, production and finance is organised as a separate department is called

a. functional structure.

b. structure of organisational polices.

c. functional foremanship.

d. divisional or product structure.

Answer:

(a)

Explanation: In functional structure of organisation, activities are based on specialisation. Specialised people are hired for marketing, finance, production, etc.

Q.31. The formal relationship of authorities, duties and responsibility between various positions of an enterprise is called

a. functional foremanship.

b. informal organisation.

c. grapevine.

d. organisation structure.

Answer:

(d)

Explanation: Organisation structure means a structure of authority and responsibility that is deliberately designed to achieve organisational goals. Different components (designations and departments) of this structure are connected by authority responsibility relationship.

Q.32. The pattern of authority that enables better utilisation of middle and lower level management is called

a. centralisation.

b. decentralisation.

c. concentration of authority in the top management.

d. sharing authority with outside parties.

Answer:

(b)

Explanation: In decentralisation, authority is transferred to all the levels of the organisation. When more and more people are assigned authority to do their respective tasks, they can perform better and utilise the resources more efficiently.

Q.33. The organisation structure, which provides specialization, is called

a. departmentalisation.

b. divisional or product-line structure.

c. grapevine.

d. functional structure.

Answer:

(d)

Explanation: In functional structure, departments are formed on the basis of functions such as production, marketing, finance, etc. Thus, specialised people are hired for different activities, which increase specialisation.

Q.34. Mr Sunil is a manager in ABC Limited. He has transferred some of his authority to his subordinates for routine work so that he can concentrate on non-routine and important matters. This is an example of

a. centralisation.

b. concentration of powers.

c. delegation of authority.

d. delegation of accountability.

Answer:

(c)

Explanation: Mr. Sunil has delegated his authority because he has shared his authority with his subordinates for routine matters so that he can concentrate on important matters.

Q.35. Principle of objective, which is a principle of organising, means that

a. objectives should be laid down by top management.

b. objectives of an organisation should be clearly defined and fully understood by the personnel.

c. first line management should take part in planning process.

d. employees should be motivated to give suggestions.

Answer:

(b)

Explanation: Principle of objective means that objectives of an organisation should be clearly defined and fully understood by the personnel. Objectives should be laid down not only for the organisation as a whole but for each department and members thereof.

Q.36. The first step in the process of organising is

a. assigning duties and responsibilities.

b. division of work.

c. delegation of authority.

d. coordinating activities.

Answer:

(b)

Explanation: Division of work is the first step in the process of organising. In organising function, we classify different activities, club similar activities and make departments for them.

Q.37. The pattern of authority that enables middle and lower level managers to take quick decisions is called

a. centralisation.

b. concentration of authority.

c. decentralisation.

d. authority responsibility relationship.

Answer:

(c)

Explanation: In decentralisation, authority is transferred to the bottom of the hierarchy so that every part of the workforce can take their own decisions effectively without any delay.

Q.38. The power and rights to make decisions, issue order, use resources is called

a. responsibility.

b. authority.

c. division of work.

d. accountability.

Answer:

(b)

Explanation: Authority means the rights to order and correct subordinates. It is needed to lead people without authority there can be no leadership.

Q.39. One of the disadvantages of centralisation is that

a. it delays decision-making.

b. it quickens the process of decision-making.

c. it delegates the power to lower management

d. it delegates the power to middle management.

Answer:

(a)

Explanation: Centralisation delays decision-making because all the decisions need to be sanctioned by the top management before their implantation.

Q.40. The first step in the process of delegation of authority is

a. assignment of authority.

b. assignment of accountability.

c. defining organisation structure.

d. assignment of duties and tasks or responsibilities.

Answer:

(d)

Explanation: In the process of delegation, the first thing to be done is to assign the tasks to be performed. If an employee does not know what he is supposed to do, he would misuse his authority. The first thing is to tell the employees what is expected from them, and then to apprise them of their rights and privileges in pursuing these functions.

Q.41. Mr Mittal, a manager in Golden Publishers Pvt Ltd, is a part of middle management. However, he has very little authority to do his tasks and has to depend on the top management for instructions and guidance in the day-to-day functioning of his job. This is an example of

a. centralisation.

b. decentralisation.

c. delegation of authority.

d. unity of command.

Answer:

(a)

Explanation: This is an example of centralisation of authority in the hands of top management. Very little authority is transferred to middle level managers and they get difficulties in pursuing their jobs effectively.

Q.42. The principle of span of control (a principle of organising) implies that

a. the control should be exercised by the top management.

b. the control should be exercised at all the levels of management.

c. the number of subordinates should be such that a manager can effectively direct and control.

d. the lesser number of subordinates should be managed by a supervisor.

Answer:

(c)

Explanation: Principle of span of control means that the number of subordinates should be such that a manager can effectively direct and control them. If a manager has lesser number of subordinates, his qualities and expertise is underutilized. On the other hand, if he has a larger number of subordinates, he would not be able to control and check the performance of each and every subordinate.

Q.43. Duplication of physical facilities and functions is a disadvantage of

a. functional structure of organisation.

b. informal organisation.

c. divisional organisation.

d. delegation of authority.

Answer:

(c)

Explanation: This is a disadvantage of divisional or product line structure of organisation because each product division maintains its own facilities and personnel due to which operating costs may be high.

Q.44. In formal organisation, authority flows

a. vertically upwards.

b. horizontally.

c. vertically downwards.

d. through informal groups.

Answer:

(c)

Explanation: Authority flows vertically downwards in an organisation through the official chain of command. This is referred as scalar chain.

Q.45. One of the disadvantages of delegation of authority is that

a. it does not involve informal organisation.

b. it lessens the work of a manager.

c. it passes through scalar chain.

d. it may result in loss of managerial control on subordinates.

Answer:

(d)

Explanation: Delegation of authority may result in loss of managerial control on subordinates because after getting the authority, the subordinates may not obey their superiors.

Q.46. The systematic dispersal of authority in all departments and at all levels of management for taking decisions and actions appropriate at respective levels is called

a. decentralisation of authority.

b. delegation of authority.

c. centralisation of authority.

d. unity of command.

Answer:

(a)

Explanation: When authority is delegated to every department and to every level of management, authority is said to have been decentralised. Decentralisation is the end result of all the delegations of authorities among all the managers and employees of the organisation.

Q.47. Informal organisation is

a. wider that formal organisation.

b. more flexible than formal organisation.

c. more rigid than formal organisation.

d. the official chain of communication.

Answer:

(b)

Explanation: Formal organisation has officially described rules and regulations, whereas informal organisation does not have any such rules. The rules of informal organisation are verbal and based on mutual understanding of its member.

Q.48. The pattern of authority distribution that delays decision-making at middle and lower level management is called

a. delegation of authority.

b. decentralisation.

c. scalar chain.

d. centralisation.

Answer:

(d)

Explanation: This is an example of centralisation because in this case middle and lower management will have to take permission from the top management for every decision, which will delay the whole decision-making process.

Q.49. Delegation of authority involves

a. two levels of management.

b. more than two levels of management.

c. different executives involving same level of management.

d. concentration of authority.

Answer:

a

Explanation: Delegation of authority takes place between a superior and a subordinate. In this way, it involves two levels of management.

Q.50. In informal organisation, communication

a. flows through chain of command.

b. flows through formal channels.

c. flows through informal channels.

d. has a definite path.

Answer:

(c)

Explanation: In informal organisation, members do not interact in a fixed manner. They develop their own channels of communication. The channel of communication in an informal organisation is called grapevine.

Q.51. Once the authority is delegated,

a. it cannot be taken back.

b. it reduces the responsibility of the superior.

c. the manager is not accountable for the activity delegated.

d. it can be taken back at any time.

Answer:

(d)

Explanation: Delegation means sharing of authority with subordinates. When delegation of authority does not yield results, the respective superior may take it back.

Q.52. The system of social relationship among the members of an organisation created due to common interests, tastes, attitudes, hobbies etc. is called

a. formal organisation.

b. chain of command.

c. chain of communication.

d. informal organisation.

Answer:

(d)

Explanation: Informal organisation refers to the social relations developed by the members of an organisation without deliberate efforts.

Q.53. The organisation structure in which the departments are formed on the basis of product divisions is called

a. functional structure.

b. grapevine.

c. functional foremanship.

d. divisional or product structure.

Answer:

(d)

Explanation: The organisation structure in which the departments are formed on the basis of product divisions is called divisional or product structure of organisation. Each department in it looks after the productions, sales, marketing and finance function of a product.

Q.54. Designing the framework of various positions, assigning them various tasks and accountability is called

a. planning.

b. staffing.

c. organising.

d. controlling.

Answer:

(c)

Explanation: In organising function of management, work is divided and grouped into departments. Then, a relation of authority and responsibility is created among them, so that they all can work for some common purpose.

Q.55. Division of work, grouping jobs or activities, assigning duties, delegation of authority and coordination of activities are known as

a. principles of organising.

b. steps of organising process.

c. part of planning process.

d. part of specialisation.

Answer:

(b)

Explanation: The aforementioned are the steps in the process or organising.

Q.56. The pattern of distribution of authority at all levels of management, and thus creating democracy in management of the organisation is called

a. decentralisation.

b. scalar chain.

c. unity of command.

d. centralisation.

Answer:

(a)

Explanation: In decentralisation, authority and responsibility is delegated to all levels of management and in all departments. In this way, all the people have similar authorities at the same position.

Q.57. One of the factors that help an organisation to grow and expand is

a. delegation of accountability.

b. concentration of power and duties in top management.

c. centralisation.

d. delegation of authority.

Answer:

(d)

Explanation: Delegation of authority helps an organisation to expand and grow because it increases the number of quality managers. The organisation can grow in size and increase its business activities after having a large pool of talented personnel.

Q.58. The pattern of authority in which people at all levels of management are involved in decision-making is called

a. centralisation.

b. decentralisation.

c. concentration of authority in top management.

d. concentration of authority in middle and lower of management.

Answer:

(b)

Explanation: The pattern of authority in which people at all levels of management are involved in decision-making is called decentralisation.

Q.59. Within a formal organisation, communication

a. flows through chain of command.

b. flows through informal channel.

c. flows through grapevine.

d. does not have a definite path.

Answer:

(a)

Explanation: Formal organisation provides a clear-cut path of authority and communication. This path provides the way through which information travels from one executive to another executive.

Q.60. Mr. Rajeev is an associate in XYZ Limited in which only a few managers who are at the top level take all the decisions on specific matters. The middle and lower level management have very little authority. This is an example of

a. decentralisation.

b. centralisation.

c. delegation of authority.

d. unity of command.

Answer:

(b)

Explanation: The authority in XYZ Ltd is centralised in the hands of top management.

Practice Questions for CUET Business Studies chapter-5-Organising SET-2

Q.61. Wider span of control means

a. no levels of management.

b. too many levels of management.

c. fewer levels of management.

d. only one level of management.

Answer:

(c)

Explanation: Wider span of control means that a manager has a number of subordinates. The levels of management will be fewer where a manager has a higher number of subordinates and vice versa.

Q.62. One of the advantages of informal organisation is that

a. it gives relief from the monotony of work.

b. it resists changes.

c. it may create rumours.

d. it causes conflict with formal rules and procedures.

Answer:

(a)

Explanation: In an informal organisation, employees share their personal views on things they like and they don’t like.

In this way, they get relieved of the routine tension and the boredom of doing repetitive work.

Q.63. Delegation of authority helps an organisation by

a. improving quality and quantity of work through effective division of work.

b. increasing the working hours of the employees.

c. transferring the accountability to subordinates.

d. concentrating the authority to top management.

Answer:

(a)

Explanation: Delegation of authority increases the production and quality of goods by affecting division of work.

When authority is distributed among many people, they can apply their personal expertise and knowledge on the work they are assigned. In this way, the quality and quantity of work is improved.

Q.64. One of the disadvantages of centralisation is that

a. it reduces the authority of top management.

b. it reduces the authority of middle and lower management.

c. it delays decision-making.

d. it improves the creativity and initiative level of middle and lower management.

Answer:

(b)

Explanation: In centralization, top management retains most of the part of the authority regarding decision-making for routine and non-routine matters. This reduces the authority of middle and lower level of management.

Q.65. Accountability in an organisation

a. is delegated to superiors.

b. is delegated to subordinates.

c. cannot be delegated.

d. means authority.

Answer:

(c)

Explanation: Accountability means taking ownership of the work done. When an executive does a work, he cannot run away from the responsibility of doing it as per standards. If the work done is not up to the mark, that executive is responsible for it. He cannot avoid this accountability.

Q.66. The principle of authority and responsibility (a principle of organising) means that

a. authority not responsibility should be given to the employees.

b. responsibility not authority should be given to the employees.

c. authority and responsibility should not be delegated.

d. authority and responsibility delegated should be proportionate to each other.

Answer:

(d)

Explanation: Authority and responsibility go hand in hand. Whenever a person is made responsible for doing a task, responsibility to perform that task should also be delegated to him so that he is able to do his work efficiently and effectively.

Q.67. One of the advantages of divisional or product structure of organisation is that

a. it adds specialisation.

b. it emplasises on functions.

c. decision-making is fast and effective in this structure.

d. it is difficult to fix accountability in this structure.

Answer:

(c)

Explanation: In divisional structure, one department is formed for one product. All the decisions regarding that product are taken in that department itself. This fastens the process of decision-making.

Q.68. The three elements of delegation of authority are

a. responsibility, authority and accountability.

b. authority, division of work and functional foremanship.

c. unity of command, specialisation and division of work.

d. responsibility, specialisation and functional foremanship.

Answer:

(a)

Explanation: In delegation of authority, responsibility for doing a work is transferred to subordinates. Then, they are given the authority to do that work with efficiency. Once they complete the tasks assigned to them, they are held accountable for the work they have performed.

Q.69. The organisation structure, which is suitable for complicated products such as automobiles and electronic items, is

a. functional structure of organisation.

b. grapevine.

c. divisional or product structure of organisation.

d. functional foremanship.

Answer:

(c)

Explanation: Divisional structure is suitable in this case because decisions regarding the issues of same product can be taken quickly.

Q.70. Grouping similar activities is also called

a. departmentalisation.

b. centralisation.

c. decentralisation.

d. accountability.

Answer:

(a)

Explanation: Grouping similar activities is called departmentalisation. In this process, departments are formed on the basis of the work to be done.

Q.71. The obligation of a subordinate to give information to his superior about how much of the job assigned to him has been completed is called

a. authority.

b. responsibility.

c. accountability.

d. power.

Answer:

(c)

Explanation: Accountability means taking ownership of the work done. When an employee performs a task, he is held accountable for good or non-performance of the job.

Q.72. Little authority in the hands of middle and lower managers is an example of

a. decentralisation.

b. delegation of authority.

c. centralisation.

d. divisional structure.

Answer:

(c)

Explanation: This is an example of centralisation because most of the decision-making authority is in the hands of top management.

Q.73. Informal organisation is

a. larger than formal organisation.

b. the official chain of command in an organisation.

c. a part of formal organisation.

d. beyond the boundaries of formal organisation.

Answer:

(c)

Explanation: Informal organisation is a part of the formal organisation and the two cannot be separated form each other. Any organisation is a mixture or combination of formal and informal organisation.

Q.74. The third step in the process of delegation of authority is

a. assignment of authority.

b. creation of accountability.

c. defining organisation structure.

d. assignment of duties and tasks.

Answer:

(b)

Explanation: Creation of accountability is the third step in the process of delegation of authority after the assignment of tasks and authorities.

Q.75. One of the features of informal organisation is that

a. they are larger than formal organisation.

b. they are related to official relationship of employees.

c. they are smaller than formal organisation.

d. they help in creating formal organisation.

Answer:

(c)

Explanation: Informal organisation comes into existence when a formal organisation is designed. Informal organisation generates from within the formal organisation. Employees form informal organisation for their satisfactions and for creating a sense of belonging to the organisation.

Practice Questions for CUET Business Studies chapter-5-Organising SET-3

Q.76. Wide span of control means

a. effective supervision.

b. fast communication.

c. too many levels of management.

d. complicated organisation structure.

Answer:

(b)

Explanation: If there are fewer levels of management, communication has to flow through fewer people to reach the desired person.

Q.77. Ravi, Sunita, Mita and Ganesh are working in an organisation at different positions. They have become good friends because of their common interests, hobbies and preferences. This non-official relationship among them is called

a. formal organisation.

b. delegation of authority.

c. informal organisation.

d. functional foremanship.

Answer:

c

Explanation: These four friends have developed an informal organisation within the formal organisation.

Q.78. One of the advantages of decentralisation is that

a. it reduces the authority of middle management.

b. increases the burden of top management.

c. it reduces the authority of first line management.

d. it reduces the burden of top management.

Answer:

(d)

Explanation: Through decentralisation, top management delegates responsibility and authority to lower levels of management. They are thus relieved of the burden of doing the entire job by themselves.

Q.79. The marketing manager of an organisation has been asked to achieve a target sale of 200 generators per month. He delegates this task to 20 sales managers. Three of the sales managers could not achieve the target. The person responsible for not achieving targets is

a. marketing manager.

b. sales managers who did not achieve the target.

c. all the sales managers.

d. the owner or board of directors of the company.

Answer:

(a)

Explanation: The marketing manager is responsible for non-achieving of targets of his subordinates because marketing manager can delegate authority but not accountability.

Q.80. In an organisation, authority flows

a. from lower to higher positions in the hierarchy.

b. form top to bottom of organisation hierarchy.

c. horizontally.

d. outside the organisation.

Answer:

(b)

Explanation: Authority flows from top to bottom of the organisation hierarchy through the scalar chain.

Q.81. The organisation in which employees are allowed to interact freely without any rules and regulations is called

a. formal organisation.

b. functional organisation.

c. informal organisation.

d. divisional structure.

Answer:

(c)

Explanation: Informal organisation provides its employees the platform to share their feelings and viewpoints. Informal organisation helps an employee to feel connected with the organisation.

Q.82. Delegation of authority helps in

a. making right decisions.

b. creating informal organisation.

c. making quick decisions.

d. centralisation.

Answer:

(c)

Explanation: By delegating the authority, the lower level employees can take decisions quickly without consulting their superiors.

Q.83. In an organisation, responsibility flows

a. downwards.

b. upwards.

c. horizontally.

d. outside the organisation.

Answer:

(b)

Explanation: Lower level managers are accountable to their subordinates who are one level higher in organisation hierarchy. Thus responsibility flows upwards.

Q.84. The organisation structure suitable for multi-product manufacturing company is

a. divisional structure.

b. functional foremanship.

c. functional structure.

d. informal structure.

Answer:

(a)

Explanation: Divisional structure is suitable for multi-product manufacturing company. In divisional structure, all the activities related to one product are grouped under one department.

Q.85. In Vikas Real Estate company, top management retains absolute authority for making almost all decisions on the functioning of the organisation. This is an example of

a. decentralisation.

b. centralisation.

c. delegation of authority.

d. unity of command.

Answer:

(b)

Explanation: An organisation where top management retains absolute authority for making almost all decisions on the functioning of the organisation is an example of centralisation.

Q.86. Short span of control means

a. effective supervision.

b. fast communication.

c. simple and small organisation structure.

d. fewer management levels.

Answer:

(a)

Explanation: Short span of control means effective supervision because a manager can effectively manage fewer people as his subordinates.

Q.87. The type of organisation in which friendly relationship exists among members is called

a. formal organisation.

b. functional foremanship.

c. scalar chain.

d. informal organisation.

Answer:

(d)

Explanation: In an informal organisation, the members interact with each other because of their common hobbies and preferences. There is no official chain of communication and command in an informal organisation.

Q.88. The concept of accountability arises from

a. investors.

b. authority.

c. grapevine.

d. informal organisation.

Answer:

(b)

Explanation: The concept of accountability is related to authority. If a person is not given appropriate authority to carry out an activity, he cannot be held accountable for that activity.

Q.89. When a manager delegates authority to a subordinate

a. he continues to be responsible for the job of the subordinate.

b. he ceases to be responsible for the job of the subordinate.

c. responsibility is delegated.

d. accountability is delegated.

Answer:

(a)

Explanation: Authority can be delegated but not accountability. A person can be asked to do a task after assigning him the required authority to do that job but he cannot evade the accountability, if the work is not done according to the standards set.

Q.90. One of the disadvantages of informal organisation is that

a. it gives emotional satisfaction and attachment.

b. it may create rumors.

c. it creates a sense of belonging.

d. it gives relief from autonomy.

Answer:

(b)

Explanation: Informal organisation is a source of rumours. Rumours may adversely affect the motivation level of the personnel and it is not easy to locate the origin of the rumors.

Q.91. The concept, which reduces the workload of a manager, is called

a. divisional structure.

b. functional foremanship.

c. delegation of authority.

d. functional structure.

Answer:

(c)

Explanation: Delegation of authority means sharing of the work to be performed and then assigning the authority to undertake that work. This sharing of work reduces the workload of the superiors.

Q.92. In an organisation, accountability flows

a. upwards.

b. horizontally.

c. downwards.

d. outside the organisation.

Answer:

(a)

Explanation: Subordinates are accountable to their respective superiors. This is the reason why accountability flows upwards.

Q.93. Assigning responsibility, granting authority and creating accountability is collectively called

a. process or planning.

b. process of delegation of authority.

c. process of organising.

d. process of management.

Answer:

(b)

Explanation: The process of delegation of authority means assigning responsibility, granting of authority and creating accountability.

Q.94. Delegation of authority is a process, and decentralisation is

a. the beginning of the process.

b. the concentration of authority.

c. the end result of this process.

d. a part of delegation of authority.

Answer:

(c)

Explanation: Decentralisation is the sum total of all the delegations of responsibilities at all levels of management. Decentralisation is achieved through delegation of authority.

Q.95. Concentration of authority for decision-making at the top or higher levels of management is called

a. centralisation.

b. delegation of authority.

c. decentralisation.

d. unity of command.

Answer:

(a)

Explanation: In centralisation, decision-making authority is concentrated in top management. It takes all the decisions regarding the organisation and the day-to-day functioning of the organisation.

Q.96. Informal organisation is created from

a. scalar chain.

b. friendly and social interactions.

c. official chain of command.

d. top management’s initiative.

Answer:

(b)

Explanation: Informal organisation is created by social and friendly relations among different members of an organisation. Official chain of communication has nothing to do with informal organisation.

Q.97. The organisation structure suitable for one product manufacturing company is

a. divisional structure.

b. functional foremanship.

c. functional structure.

d. informal structure.

Answer:

(c)

Explanation: In functional organisation, activities are classified on the basis of functions to be performed such as production, marketing production, etc. For one-product company, it is easier to fix accountabilities in this structure.

Q.98. Short span of control means

a. slow speed of communication.

b. simple organisation structure.

c. less effective supervision.

d. fewer levels of management.

Answer:

(a)

Explanation: Short span of control means slow speed of communication because there are many levels of management where span of control is small and the communication has to pass many levels of management to reach the desired person.

Q.99. Delegation of authority creates

a. centralisation.

b. scalar chain.

c. concentration of power.

d. shifting of responsibility.

Answer:

(b)

Explanation: Delegation of authority creates a chain of superior-subordinate relationship among managers. This is called scalar chain.

Business Studies - MCQ on Organising

Practice Questions for CUET Business Studies chapter-5-Organising SET-3

Q.1. Organising is the process of

Defining the activities of the enterprise

Grouping the activities of the enterprise

Establishing authority relationship among the activities

All of the above

Answer:

Exp: Organising defines and groups the activities of the enterprise and establishes authority relationship among them.

Q.2 Which of the following is the first step of organizing process?

Departmentalisation

Assignment of duties

Identification and division of work

Establishing relationship

Answer:

Exp: The first step in the process of organizing involves identifying and dividing the work.

Q.3. Grouping the similar activities together is known as:

Division of work

Identification of work

Departmentalisation

None of these

Answer:

Exp: The departmentalization step comes after identification and division of work.

Q.4 Functional structure is suitable for

Small sized organization

Large sized organization

Medium sized organization

None of these

Answer:

Exp: Functional structure is suitable for large sized organization.

Q.5. Grouping of jobs of similar nature is concerned with

Functional Structure

Divisional Structure

Both of them

None of these

Answer:

Exp: Grouping of jobs of similar nature under functional and organizing these major functions as separate departments creates a functional structure.

Q.6. Formal organsisation

Specifies the relationship among various job positions

Places more emphasis on work to be performed

Has no definite structure.

Both (1) and (2)

Answer:

Exp: Informal organsisation has no definite structure.

Q.7. Formal organization is ___________ by nature

Tough

Rigid

Flexible

None of these

Answer:

Exp: Formal organizations are rigid while Informal organizations are flexible by nature.

Q.8. Leaders are chosen by the group in

Informal Organisation

Formal Organisation

In both types of Organisations

None of these

Answer:

Exp: In Formal organizations managers are the leasers.

Q.9. Delegation means

Downward transfer of authority

Upward transfer of authority

Downward transfer of Responsibility

None of these

Answer:

Exp: Delegation means downward transfer of authority from superior to a subordinate.

Q.10. Which of the following is not an element of Delegation?

Authority

Responsibility

Accountability

Profitability

Answer:

Exp: Profitability is not an element of Delegation.

Q.11. Authority refers to

Obligation

Answerability

Right to command

Responsibility

Answer:

Exp: Authority simply means the right to command.

Q.12. Which of the following can be delegated entirely?

Responsibility

Accountability

Authority

All of the above

Answer:

Exp: Authority can be delegated easily.

Q.13. Accountability arises from

Authority

Responsibility

Order

None of these

Answer:

Exp: Accountability arises from responsibility

Q.14 Which of the following flow upward from subordinate to superior?

Authority

Responsibility

Accountability

Both (2) and (3)

Answer:

Exp: Authority flow downward.

Q.15 Delegation helps in

Effective management

Motivation of employees

Employee development

All of the above

Answer:

Exp: Delegation is important for employees

Q.16. McNeil name is associated with

IT Product

Pharmaceutical Products

Consumer Product

None of these

Answer:

Exp: McNeil name is associated with pharmaceutical Products.

Q.17. Which of the following is true

Delegation is optional but Centralisation is compulsory

Delegation is compulsory but Centralisation is optional

Both are optional

Both are compulsory

Exp: Delegation is compulsory as no individuals can performs all tasks on his own.

Q.18. Sharing of the tasks to be performed refers to

Centralisation

Organising

Fubnctionality

Delegation

Answer:

Exp: Delegation is a process followed to share tasks.

Q.19. Functional Structure deals with

Functional Specialisation

Product Specialisation

Both (1) and (2)

None of these

Answer:

Exp: Functional Structure deals with Functional Specialisation.

Q.20 Which is not relevant with Functional Structure?

Cordination is difficult for multi Product Company

Economical by nature

Based on functions

Easier managerial development

Answer:

Exp: Managerial development is easier in case of Divisional Structure.

Q.21. Divisional Structure is based on

Merely functions

Product lines supported by functions

Decision making

None of these

Answer:

Exp: Functional Structure is based on functions.

Q.22. Informal organization

Is network of social relationship

Arises out of personal qualities

Is flexible by nature

All of the above

Answer:

Exp: Informal organizations are flexible by nature and arise as a result of social interaction.

Q.23 Decentralisation helps in

Developing initiative among subordinates

Develops managerial talent for the future

Quick Decision making

All of the above

Q.24. Decentralisation is the

Delegation of responsibility throughout the organization

Delegation of accountability throughout the organization

Delegation of authority throughout the organization

None of these

Answer:

Exp: Decentralisation deals with the delegation of authority throughout the organization.

Q.25. Which of the following is not true about Delegation

Delegation is a compulsory act.

Delegation is followed to share tasks.

Delegation has wider scope.

Delegation lessens the burden of the manager.

Answer:

Exp: Delegation has narrow scope.

Q.26. Span of management refers to

Period of management

Duration of management

Number of subordinates under a superior

None of these

Answer:

Exp: Span of management refers to Number of subordinates under a superior

Q.27 Which organization is known for giving rise to rumours

Decentralised

Informal

Formal

Centralised

Answer:

Exp: Informal organisation may become a disruptive force when it spreads rumours

Q.28 Decetralisation is the result of policy decision of the

Top Management

Middle Management

Lower Management

None of these.

Answer:

Exp: Decetralisation is the result of policy decision of the Top Management.