NCERT Solutions Class 12 Business Studies Chapter 5 – Organising
NCERT Solutions Class 12 Business Studies Chapter 5 Organising provide step-by-step explanations of organizational structure and resource allocation. These solutions help students understand delegation, departmentalization, authority relationships, and organizational efficiency. The content is prepared to simplify textbook questions and strengthen conceptual understanding. Students preparing for board exams can use these solutions to revise important topics and improve answer presentation. The chapter highlights how businesses arrange resources and responsibilities to achieve objectives effectively. Regular study of these solutions helps learners gain practical knowledge of organizational processes and enhances their overall understanding of management principles and business operations.
Chapter 5 covers Organising — the second major function of management. It explains how tasks, authority, and resources are systematically arranged to achieve organisational goals. This chapter introduces concepts like delegation, decentralisation, and different organisational structures, all of which are important for CBSE Class 12 board exams. For all subjects, NCERT Solutions for Class 12 refer to the NCERT solutions page and for other chapters of NCERT Solutions for Class 12 Business Studies, check the main page.
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What Is Organising?
Organising is the process of identifying and grouping the work to be done, defining and delegating responsibility and authority, and establishing relationships for the purpose of achieving organisational goals. After planning determines what needs to be done, organising decides how it will be done and by whom.
Organising creates a structure within which human efforts can be directed effectively. It ensures that every task has a designated owner, every employee knows their responsibilities, and there is a clear line of authority and accountability throughout the organisation.
Steps in the Organising Process
Step | Activity |
|---|---|
1. Identification of Activities | List all the activities that need to be performed to achieve organisational objectives. |
2. Grouping of Activities (Departmentalisation) | Similar or related activities are grouped together to form departments or units. |
3. Assignment of Duties | Each group of activities is assigned to an individual based on their skills and qualifications. |
4. Delegation of Authority | Authority matching the assigned responsibility is granted so employees can perform their tasks. |
5. Establishing Relationships | Reporting relationships are defined so employees know who they are accountable to and who reports to them. |
Importance of Organising
Benefit | Explanation |
|---|---|
Benefits of Specialisation | Grouping activities enables employees to focus on specific tasks, improving skill and efficiency. |
Clarity in Working Relationships | Clearly defined roles and reporting lines prevent confusion and conflict among employees. |
Optimum Utilisation of Resources | Proper assignment of work avoids duplication and ensures all resources are productively used. |
Adaptation to Change | A well-organised structure can be modified to accommodate new goals, technologies, or markets. |
Development of Personnel | Delegation of authority gives employees opportunities to grow and take on greater responsibilities. |
Expansion and Growth | Organising makes it possible to expand operations without chaos by creating scalable structures. |
Types of Organisation Structures
Functional Structure
In a functional organisation, departments are created based on the major functions performed — such as production, marketing, finance, and human resources. Each department is headed by a functional specialist. This structure works best in large organisations with a limited product range and high need for specialisation.
Divisional Structure
In a divisional organisation, separate divisions are created based on products, geographies, or customer segments. Each division operates like a semi-independent unit with its own functional departments. This is ideal for large, diversified organisations with multiple product lines.
Functional vs Divisional Structure – Comparison
Basis | Functional Structure | Divisional Structure |
|---|---|---|
Basis of Formation | Grouped by functions (production, HR, finance) | Grouped by products, regions, or markets |
Best Suited For | Single-product companies with large scale | Multi-product or multi-region companies |
Specialisation | High functional specialisation | Specialisation within each division |
Coordination | Difficult between departments | Easier within each division |
Accountability | Difficult to assess per-product performance | Clear accountability for divisional results |
Cost | Lower cost due to shared resources | Higher cost as each division has own functions |
Delegation of Authority
Delegation is the process by which a manager assigns some of their work, authority, and responsibility to a subordinate. It allows managers to focus on higher-level tasks while developing subordinates' capabilities. Effective delegation is essential in large organisations where no single manager can handle all work alone.
Elements of Delegation
Element | Meaning |
|---|---|
Authority | The right to give orders, make decisions, and use organisational resources to accomplish assigned tasks. |
Responsibility | The obligation of a subordinate to perform the assigned task to the best of their ability. |
Accountability | The subordinate is answerable to the superior for the outcomes of the delegated work. |
A key principle: Authority can be delegated, but responsibility and accountability cannot be fully delegated. The manager who delegates remains ultimately responsible for the results.
Decentralisation
Decentralisation refers to the systematic distribution of authority across all levels of the organisation. Unlike delegation (which is between a manager and a subordinate), decentralisation is a philosophy of management that determines how much authority should reside at the top versus throughout the hierarchy.
Importance of Decentralisation
Benefit | Explanation |
|---|---|
Develops Initiative | Employees at lower levels gain experience in decision-making, fostering leadership qualities. |
Quick Decision-Making | Local managers can act fast without waiting for approvals from the top of the hierarchy. |
Relieves Top Management | Senior managers can focus on strategic planning while operational decisions are handled lower down. |
Develops Managerial Talent | Provides a training ground for future managers by giving them real decision-making experience. |
Motivates Employees | Greater authority and responsibility at all levels increases employee engagement and motivation. |
Delegation vs Decentralisation
Basis | Delegation | Decentralisation |
|---|---|---|
Nature | A managerial act between individuals | A company-wide management philosophy |
Scope | Limited to a manager and their subordinate | Applies to the entire organisation |
Purpose | To reduce workload of the manager | To distribute decision-making authority broadly |
Withdrawal | Can be withdrawn at any time by the manager | Cannot be easily reversed once embedded in culture |
FAQs – NCERT Solutions Class 12 Business Studies Chapter 5 – Organising Solutions
NCERT Solutions for Chapter 5 help students understand how organizations structure their resources and distribute responsibilities to achieve business goals efficiently. This chapter is important for CBSE board exams because it includes conceptual, application-based, and case-study questions. The solutions explain every NCERT question in a simple and systematic manner, making it easier to understand key concepts such as organizational structure, delegation, and decentralisation. Regular practice improves conceptual clarity, strengthens answer-writing skills, and helps students present accurate responses using appropriate business terms, increasing their chances of scoring high marks in examinations.
Students should focus on the meaning, importance, and process of organising, along with concepts such as organizational structure, formal and informal organization, delegation of authority, and decentralisation. It is important to understand the differences between functional and divisional organizational structures and their advantages and limitations. Questions comparing delegation and decentralisation or identifying organizational structures from business situations are frequently asked in CBSE examinations. Practising NCERT Solutions helps students understand these concepts in depth, remember key points, and answer both short and long questions with clarity and confidence.
NCERT Solutions explain organising concepts through practical business examples, allowing students to connect theory with real-life organizational situations. They teach students how to identify the appropriate organizational structure, analyse delegation of authority, and explain decentralisation in different scenarios. The solutions also demonstrate how to write well-structured answers using relevant business vocabulary and logical reasoning. By practising these solutions regularly, students develop analytical thinking, improve their ability to solve competency-based and case-study questions, and gain the confidence needed to perform well in CBSE Class 12 Business Studies examinations.