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Class 12 Organising: cheat sheet
CBSE Business Studies. Organising work and people: the steps in organising, span of management, functional and divisional structures, formal and informal organisation, delegation and decentralisation.
Key ideas
- Organising identifies and groups the work, defines authority and responsibility, and sets up relationships so that people can work together.
- Its steps are identifying and dividing the work, departmentalisation, assigning duties, and establishing reporting relationships.
- The span of management is the number of subordinates a manager can manage well; it decides how many levels the structure has.
- A functional structure groups jobs by function (production, marketing, finance); a divisional structure groups them by product, each division with its own functions.
- Formal organisation is deliberately designed with written rules; informal organisation grows out of social contact, spreads news fast but can spread rumours and resist change.
- Delegation passes authority to a subordinate and is compulsory; decentralisation spreads authority to every level and is an optional policy.
- Authority flows downward, responsibility flows upward, and accountability cannot be delegated at all.
Remember
| Supervisors needed | workers ÷ span of management, rounded UP |
| Managers needed | supervisors ÷ supervisors each manager can manage |
| Elements of delegation | authority, responsibility, accountability |
| Functional structure suits | a large firm with one main product line |
| Divisional structure suits | a firm with many distinct product lines |
| Importance of organising | specialisation, clear relationships, best use of resources, adapting to change, growth |
Watch out
- Rounding the number of supervisors down: 125 workers with a span of 10 need 13 supervisors, not 12.
- Saying accountability can be delegated: a manager stays answerable for the work he delegates.
- Treating delegation and decentralisation as the same thing.
Worked example
Put these steps of the organising process in order: (a) establishing reporting relationships (b) identification and division of work (c) departmentalisation
Working: identification and division of work → departmentalisation → establishing reporting relationships
Answer: b, c, a
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