Organising Class 12 Business Studies Important Questions

Important Questions Class 12

Please refer to Organising Class 12 Business Studies Important Questions with solutions provided below. These questions and answers have been provided for Class 12 Business Studies based on the latest syllabus and examination guidelines issued by CBSE, NCERT, and KVS. Students should learn these problem solutions as it will help them to gain more marks in examinations. We have provided Important Questions for Class 12 Business Studies for all chapters in your book. These Board exam questions have been designed by expert teachers of Standard 12.

Class 12 Business Studies Important Questions Organising 

Question: Give any one importance of organizing?
Answer: Development of personnel.

Question: What is span of management?
Answer: Number of subordinates that can be managed efficiently by superior.

Question:“Authority can be delegated but not responsibility”. Is this statement true or false?
Answer: True.

Question:“Authority flows upwards but responsibility flows downwards’. Is this statement true or false?
Answer: False 

Question: Which is the first step in the process of organizing?
Answer: Identification and division of work 

Question: Name of the function of management which co-ordinates the physical, financial and human resources and establishes productive relations among them for achievement of specific goals.
Answer: Organising

Question: What do you mean by organising?
Answer: Organising can be defined as a process that initiates implementation of plans by clarifying jobs and working relationships and effectively deploying resources for attainment of organizational objectives/goals. 

Short Answer Type Question :

Question: Distinguish between functional structure and divisional structure.

BasisFunctional StructureDivisional Structure.
FormationIt is based on functionsIt is based on product lines
SpecialisationFunctional SpecialisationProduct Specialisation
ResponsibilityDifficult to fix on a departmentsEasy to fix responsibility

Question: Distinguish between authority and responsibility on the basis of :
a. Direction of flow b. Delegation c. Origin 

Direction of flowAuthority flows downwardsResponsibility flows upwards
DelegationAuthority can be delegatedResponsibility is absolute and cannot be delegated.
OriginArises from lawArises from authority.

Question: Aman Ltd. Is manufacturing toys and has production, sales, Purchase and Finance Departments. Which type of organization structure would you suggest to them? State any two advantages of this organization structure.
Answer: I would suggest functional structure for Aman Limited.
Advantages of this structure:

  • Supervision is facilitated.
  • Coordination with in the department is easier. 

Question: Explain steps in the process of organisating.
Answer:  Steps in the process of organisating are:

  • Identification and Division of Work : The process of organizing involves identifying and dividing the total work to be done into small and manageable activities (called jobs) so that duplication of efforts and resources can be avoided and the burden of work can be shared among the employees.
  • Departmentalization : The second step in organizing is grouping similar jobs into larger units called departments or divisions. This grouping process is called ‘Departmentalization / Departmentation’. It facilitates specialization.
  • Assignment of Duties : Once departments have been formed, it is necessary to allocate work/jobs to the members of each department in accordance with their skills and competencies. In other words, the work must be assigned to those who are best fitted to perform it well. It is essential for effective performance.
  • Establishing Reporting Relationships : Authority-responsibility relationship is established so that each individual may know from whom he/she has to take orders and to whom he/she is accountable. 

Question: Distinguish between ‘delegation’ and ‘decentralization’ of authority on the basis of
(i) purpose (ii) parties involved and (iii) withdrawal of authority.

PurposeIt means getting things done through subordinatesTo prepare the organization for handling major expansion of its activities
Parties involvedIt is confined with manager and his immediate subordinateIt indicates relationship between top management and various other departments
Withdrawal of authorityThe delegated authority can be withdrawn by the delegatorWithdrawal of authority is difficult

Long Answer Type Question :

Question: Explain Divisional Structure and its advantages and limitations
Answer: Divisional Structure : In this structure, the organization structure comprises of separate business units or division. Generally, manpower is grouped on the basis of different products manufactured.
Advantages of Divisional Structure :

  • It helps in the development of varied skills in a divisional head.
  • It promotes flexibility and initiative because each division functions as an autonomous unit which leads to faster decision making.
  • It facilitates growth and expansion as new divisions can be added without interrupting the existing operations by merely adding divisional heads and the staff for the new product line.


  • This gives rise to duplication of effort among its divisions.
  • Manages in each department focus on their own product without thinking the rest of the organization.
  • There may not be full utilization of different equipments

Question: Explain functional structure and its advantages.
Answer: Functional structure : A functional structure is an organizational design which is created by grouping of jobs of similar nature under major functions and organizing these functions as separate departments. All departments report to a coordinating head.
Advantages of Functional Structure :

  • A functional structure leads to functional specialization since emphasis is placed on specific functions.
  • It helps in increasing managerial and operational efficiency.
  • It leads to minimum duplication of efforts.
  • It promotes control and coordination within a department.
  • It makes training of employees easier.
Organising Class 12 Business Studies Important Questions