CBSE Important Questions Class 12 Business Studies Chapter 5

Important Questions for CBSE Class 12 Business Studies Chapter 5 – Organising

These Class 12 Business Studies Chapter 5 Important Questions will teach students about Organizing. After reviewing these CBSE revision notes, students would get the idea of Organizing. Students would also be better prepared for their exams by studying these chapter 5 class 12 business studies important questions and could solve several CBSE sample papers after studying these business studies class 12 chapter 5 important questions.

These notes also come with important concepts and CBSE extra questions that can be used to assess your comprehension.

CBSE Class 12 Business Studies Chapter-5 Important Questions

Study Important Questions for Class 12 Business Studies Chapter 5 – Organising

Very Short Answer Questions (1 mark)

  1. The school’s principal organized all the activities into task groups, each of which was responsible for certain aspects of the annual event, such as rehearsing, decorating, managing the stage, providing refreshments, etc. A senior teacher was assigned to oversee the general management of each group. As a result, the principal organized and oversaw the activities at the school, carrying out the management job.

Ans: Organizing. The process of organizing is recognizing and assembling the work that needs to be done.

  1. The organizational structure that supports the development of managerial and operational skills is a _______.

Ans: A functional structure aids in increasing managerial and operational skills.

  1. What components make up an authority delegation?

Ans: The components of authority are responsibility, authority, and accountability.

  1. The company has its registered office in Delhi, a manufacturing unit in Gurgaon, and a marketing & sales department in Faridabad. The company manufactures consumer products. To achieve its targets, what type of organizational structure should it adopt?

Ans: Structure of a functional organization.

  1. What does the term “decentralization” mean?

Ans: Decentralization occurs when authority is delegated from upper management to lower levels of management within an organization. This allows for more efficient use of resources and faster decision-making processes.

  1. Describe what does”organising as a process” mean?

Ans: Organizing is identifying and grouping the work to be done, assigning duties to job positions, and establishing relationships between those positions to achieve objectives.

  1. The type of organizational structure that promotes flexibility and initiative is a flat structure.

Ans: Divisional Structure encourages initiative and flexibility.

  1. The type of organizational structure that promotes efficiency in utilizing manpower is known as a divisional structure.

Ans: The functional structure is a type of organization designed to promote efficiency by utilizing manpower in the most effective way possible. This type of structure is often seen in production-based or service-oriented businesses.

  1. Organizing promotes the best use of available resources. What kind of resources is it referring to?

Ans: All available raw materials, financial , and human resources such as labour.

  1. Give anyone importance of organising?

Ans: Development of personnel. 

Short Answer Questions (3 or 5 marks): 

  1. Describe what the word “delegation” mean?

Ans: Delegation refers to the downward transfer of authority from a manager who assigns specific tasks or projects to a subordinate. This frees the manager’s time to focus on other tasks and responsibilities. Delegation is an essential leadership skill for managers to be successful.

  1. Which organisational structure was deliberately created?

Ans: A formal organization is an organization that is designed to help the business run smoothly. This organization usually has a clear hierarchy and well-defined rules and procedures with definite authority, responsibility and accountability.

  1. Businesses with multiple products, each with unique qualities, and a divisional organization are more suited. Do you concur?

Ans: I agree that a divisional structure is suitable for organizations with several products, each with distinct features. This structure works well for organizations with comprehensive geographical coverage or distinct segments. In addition, dividing the organization into several autonomous divisions allows it to take advantage of a functional structure.

  1. Which phrase describes “the number of subordinates that a superior can effectively manage”?

Ans: The term “Span of Management” describes how many subordinates a superior can effectively supervise. In the management span, the manager has several subordinates who are directly answerable to him.

  1. Hindustan Ltd. produces textiles, soaps, and computers. What kind of organizational structure would work best for this kind of organization? List any three benefits this organizational structure may have.

Ans: An organizational structure with divisions might work well for Hindustan Limited.


  1. Each division is capable of functioning on its own.
  2. Divisional management enhances resource utilization
  3. . Eliminates the need for corporate managers to oversee the division directly.
  1. “A Manager believes that he is not accountable for the calibre of job that he has assigned to his subordinate.” Do you share his point of view? Justify your response with the appropriate agreements.

Ans: The claim is false because it deviates from total accountability. The person who assigns responsibility remains liable to his superior for the tasks carried out by his subordinate. In other words, giving away power does not absolve the management of responsibility.

  1. A manager increases the monthly output goal from 3000 kg to 6000 kg. But the Manager should have given the go-ahead to buy raw materials. As a result, the revised production goal could not be met. Who is accountable?

Ans: The Manager is responsible for the team’s conduct because they have given him the power to decide on their behalf. The Manager is only adequately performing their obligations if they also must follow through on these choices. In other words, the idea of equal accountability and authority has been broken.

  1. “Accountability cannot be transferred, only authority can.” Describe the assertion.

Ans: According to complete responsibility, accountability cannot be delegated, but authority can. In other words, a manager is accountable to his superiors for both the tasks given to subordinates and the behaviour of those subordinates.

  1. Define “authority” as a component of delegation.

Ans: Authority refers to the responsibility delegated to a subordinate to make decisions independently and complete the task efficiently. Authority means the power or right to give orders, make decisions, and enforce obedience. Therefore, when a manager delegates authority to subordinates, they also delegate the power to make decisions and take action.

Long Answer Questions (5 or 6 marks): 

  1. List any three benefits that formal organizations may have.

Ans: Benefits of formal organizations include:

(a) Fixation of accountability: Fixing responsibility is simpler due to mutual relationships.

(b) The roles and responsibilities of each member are made clear. As a result, there is no confusion, and it helps to prevent  duplication of effort.

(c) Unity of command: As formal organizations make greater use of official channels for command and communication, there is a unity of command.

(d) Aids in attaining goals: Giving employees a framework for activities to be taken and a clear understanding of their roles helps them to accomplish goals effectively.

(e) Offers consistency: Because there are explicit norms to govern employees’ behaviour, the organization benefits from consistency.

  1. “Panda Trucks Ltd.” decided to locate its new truck manufacturing facility in an underdeveloped region of Bihar where there were few employment possibilities. However, the residents in that area supported Panda Trucks Ltd.’s endeavour. It also decided to build a school, hospital, market, and other amenities on the plant grounds to draw people to work there. As a result, “Panda Trucks Ltd.” began making enormous profits. Sanjay, the production manager of a rival business, was tasked with looking into Panda Trucks Ltd.’s extraordinary earnings.

Sanjay discovered that there was systematic coordination between the various business activities to accomplish organisational objectives. The sole difference between his firm and “Panda Trucks Ltd.” was that the latter permitted the flow of communication in all directions as required, leading to faster distribution of information and prompt feedback. In addition, each worker understood their responsibilities and to whom they were answerable.

(a) Describe the style of organization that enables “Panda Trucks Ltd.” to communicate effectively in all directions.

Ans: Panda Trucks Ltd.’s informal structure allows communication to flow in all directions.

(b) List one more benefit of the organization’s type mentioned in (a) above.

Ans: One more advantage that informal organization has is the promotion of social and cultural values. The organization members share common thoughts, social beliefs, and cultures. Doing this adds to the organization’s strength and creates a commitment to achieve its goals.

(c) State any two values that “Panda Trucks Ltd.” wished to convey to society.

Ans: Below are the two values that “Panda Trucks Ltd.” wishes to connect to society.

  1. Upholding one’s societal obligations.
  2. Working for the benefit of the workforce.
  3. A corporation with an Rs. 20,000 crores authorized share capital has been registered under the Companies Act. Its manufacturing facility is in a less developed Rajasthani area, although its registered office is in Delhi. The company’s marketing division is located in Bhopal. The business produces fast-moving consumer goods (FMCG).

(i) Provide a diagram illustrating a suitable organizational structure for the business.

Ans: Divisional Structure as an answer

(ii) Describe three benefits of this organizational structure.

Ans: Benefits of a divisional structure include:

(i) Each division can function independently.

(ii) Divisional management enhances resource utilization.

(iii) The independence of each division encourages flexibility.

(iv) Eliminates the need for corporate managers to oversee the division directly.

  1. Aman Chadha founded “Bulls Eye,” a corporation offering companies cyber security solutions. Its goal is to safeguard crucial data and stop, detect, and respond to cyberattacks. He was a talented software developer with extensive knowledge of cybersecurity. His reputation spread quickly because, in addition to being a person of integrity, he also carried out his duties with the utmost sincerity and honesty. Day by day, the company began to expand.


He was thrilled when the Ministry of Defence gave him a significant project. However, while working on the project, he discovered that it needed to be more practical to manage all the work by himself due to the volume of work. So he made a choice to grow the squad. A nearby engineering college and the corporation kept close contact. Ishan and Vrinda were chosen to work on the new project during a campus placement.

The new hires impressed him with their aptitude, enthusiasm, and dependability. As a result, Aman Chadha could concentrate on his goals, and with the aid of Ishan and Vrinda, the project was finished on schedule. As a result, Aman Chadha was able to expand his operational area in addition to this. On the other hand, Ishan and Vrinda also had chances to grow and use their initiative.

(i) Name and briefly describe the idea that Aman Chadha employed in the situation mentioned above to assist him in focusing on his goals.

Ans: The idea of delegation is used by Aman Chadha. This is due to Aman’s decision to hire more workers after determining that the volume of work was too much for him to handle alone. Ishan and Vrinda were given the tasks, so Aman could focus on the objectives. He assigned work to his subordinates as a result.

(ii) List any additional four aspects of the concept mentioned in (i) above that are crucial.

Ans: The following examples illustrate the value of delegation.

  1. Managerial effectiveness: Managers can concentrate on essential tasks while exploring new ones by delegating tasks to workers. The managers’ independence from menial tasks increases their effectiveness.
  2. Employee proficiency: When employees are given a task, they can showcase their abilities and skills. This helps them develop both their talents and their experience.
  3. Motivation: By giving responsibility to subordinates, managers may see how effective and capable those individuals are.
  4. Development: Delegation promotes the emergence of capable managers who can steer the company through its expansion phase. This promotes the growth and expansion of the business.
  5. What are the benefits and drawbacks of the divisional organization?

Ans: A few of the benefits of divisional organisation are:

  1. Each division can function independently.
  2. Divisional management enhances resource utilization.
  3. Eliminates the need for corporate management to oversee the division directly.

The disadvantages of the divisional organisation are :

  1. This structure is inappropriate for small businesses.
  2. Different divisions may have activity duplication.
  3. Costs could go up if each section performs independent services.
  4. Each divisional manager disregards the organization’s overarching objective when he only protects his interests.
  5. Describe, using three justifications, why organizing is a crucial managerial function.

Ans: The vital significance that organization plays in any corporate venture is highlighted by the following points:

(i) Clarity in business partnerships: The development of working connections defines “who will report to whom” and outlines communication channels. This clears up any ambiguity in the transmission of knowledge and instructions.

(ii) Efficient management: Clear descriptions of occupations and related responsibilities are provided through organizing. By doing so, confusion and duplication are reduced. In addition, effective work execution is made possible by transparent working relationships. As a result, managing an enterprise becomes simple, which improves administration.

(iii) Development and expansion: By allowing a company to break from established conventions and take on new challenges and by aiding its effective management, organizing aids in the growth and diversification of an enterprise.

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FAQs (Frequently Asked Questions)

1. Identify the organizational structure that promotes operational and management effectiveness.

 Functional structure boosts operational and management effectiveness.

2. Name the organizational structure that encourages initiative and flexibility.

The divisional organization encourages initiative and flexibility.

3. Definition of "Delegation"

Delegation is the downward delegation of authority and responsibility of a superior to the level of a subordinate.

4. What constitutes an authority delegation?

The authority delegation comprises: Responsibility, Authority, and Accountability.

5. Which organizational structure was deliberately created?

Formal Organization was purposefully created for organisational structure.