CBSE Class 12 Business Studies Chapter 5 Organising Notes, Download PDF

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CBSE Class 12 Organising Notes: Here, students can find handwritten Class 12 Business Studies Chapter 5 Organising Notes. This will guide you in appropriate revision for the upcoming CBSE Board Exam.

Organising Class 12 Notes: Here, students can find attached complete and detailed revision notes for CBSE Class 12 Business Studies Chapter 5, Organising. A PDF download link for the same has also been attached here. These Class 12 Organising revision notes have been prepared by our subject matter experts, as per the updated and revised CBSE Syllabus 2023-2024.

The revision notes presented here will help students clear all their doubts related to concepts present in the chapter. This is also going to be your last-minute revision guide as it presents all the information in a detailed format.

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CBSE Class 12 Business Studies MCQs

CBSE Class 12 Business Studies Mind Maps

NCERT Solutions for Class 12 Business Studies 2023-2024

Revision Notes for Class 12 Business Studies Chapter 5, Organising

What do you mean by Organising?

Organising is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives.

Steps in the process of Organising

Various steps involved in the process of organising are:

Identification and division of work
Departmentalisation
Assignment of duties
Establishing authority and reporting relationships

Importance of Organising

The importance of organising are:

Benefits of specialisation
Clarity in working relationships
Optimum utilisation of resources
Adaptation to change
Effective administration
Development of personnel
Expansion and growth

Organisation Structure

The organisation structure can be defined as the framework within which managerial and operating tasks are performed. It specifies the relationships between people, work and resources. An effective structure will result in increased profitability of the enterprise.

Types of Organisation Structure

Two types of organisation structure are:

1. Functional Structure-Grouping of jobs of similar nature under functional and organising these major functions as separate departments creates a functional structure. All departments report to a coordinating head.

Advantages of functional structure:

It promotes efficiency in utilisation of manpower as employees perform similar tasks within a department and are able to improve performance.
It promotes control and coordination within a department
It helps in increasing managerial and operational efficiency and this results in increased profit
It leads to minimal duplication of effort which results in lower costs
It makes training of employees easier as the focus is only on a limited range of skills
It ensures that different functions get due attention.

Disadvantages of functional structure:

A functional structure places less emphasis on overall enterprise objectives than the objectives pursued by a functional head
It may lead to problems in coordination as information has to be exchanged across functionally differentiated departments
A conflict of interest may arise when the interests of two or more departments are not compatible.
It may lead to inflexibility

2. Divisional Structure- In a divisional structure, the organisation structure comprises separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit. Within each division, the functional structure tends to be adopted.

Advantages of divisional structure:

Prepares people for managerial positions
Performance measurement is enhanced
It promotes flexibility and initiative because each division functions as an autonomous unit which leads to faster decision making.
It facilitates expansion and growth

Disadvantages of functional structure:

Conflict may arise among different divisions
It may lead to an increase in costs since there may be a duplication of activities
The responsible manager may gain power in bad terms

Differences between Functional and Divisional Structure

The differences between functional and divisional structures are:

Functional Structure	Divisional Structure
Its formation is based on the functions	Its formation is based on the classification of product lines
It follows functional specialisation	It follows product specialisation
It is difficult to divide the responsibilities	It is easy to divide the responsibilities
Managerial development is difficult	Managerial development is easy
It is economical	It is expensive since same work has to be repeated across various product lines
Co-ordination is difficult	Co-ordination is easy

Formal Organisation

Formal organisation refers to the organisation structure which is designed by the management to accomplish a particular task.

Features of formal organisation are:

It specifies the relationships among various job positions and the nature of their interrelationship. This clarifies who has to report to whom
It is a means to achieve the objectives specified in the plans, as it lays down rules and procedures essential for their achievement
Efforts of various departments are coordinated, interlinked and integrated through the formal organisation
It is deliberately designed by the top management to facilitate the smooth functioning of the organisation
It places more emphasis on work to be performed than interpersonal relationships among the employees

Advantages of formal organisation are:

It is easier to fix responsibility since mutual relationships are clearly defined.
There is no ambiguity in the role that each member has to play as duties are specified. This also helps in avoiding duplication of effort
Unity of command is maintained through an established chain of command
It leads to effective accomplishment of goals by providing a framework for the operations to be performed and ensuring that each employee knows the role he has to play
It provides stability to the organisation. This is because behaviour of employees can be fairly predicted since there are specific rules to guide them.

Limitations of formal organisation:

Itmay lead to procedural delays because it has to follow the process
It may not provide adequate recognition to creative talent, since it does not allow any deviations from rigidly laid down polices.
It is difficult to understand all human relationships in an enterprise as it places more emphasis on structure and work

Informal Organisation

Informal organisation emerges from the formal organisation, when interaction between people leads to network of social relationships among employees.

Features of informal organisation are:

An informal organisation originates from within the formal organisation as a result of personal interaction among employees.
The standards of behaviour evolve from group norms rather than officially laid down rules and regulation
Independent channels of communication without specified direction of flow of information are developed by group members
It emerges spontaneously and is not deliberately created by the management
It has no definite structure or form because it is a complex network of social relationships among members.

Advantages of informal organisation are:

The informal organisation leads to faster spread of information as well as quick feedback.
It helps to fulfill the social needs of the members and allows them to find like minded people.
It contributes towards the fulfillment of organisational objectives by compensating for inadequacies inthe formal organisation.

Disadvantages of informal organisation are:

When an informal organisation spreads rumours, it becomes a destructive force and goes against the interest of the formal organisation.
The management may not be successful in implementing changes if the informal organisation opposes them. Such resistance to change may delay or restrict growth.
It pressurises members to conform to group expectations.

Differences between Formal and Informal Organisation

The differences between formal and informal organisation are:

Formal Organisation	Informal Organisation
Formal organisation can be defined as structure of authority relationships created by the management	Informal organisation can be defined as network of social relationships arising out of interaction among employees
It arises as a result of company rules and policies	It arises as a result of social interaction
It is directed by rules	It does not have a set pattern
Communication takes place through the scalar chain	Flow of communication can take place in any direction
Here, managers are the leaders	Here, managers may or may not be leaders
It is rigid	It is flexible