CBSE Class 12 Business Studies, Organising


Chapter 5: Notes on Organising

PlanningOrganising refers to the process of identifying and grouping various activities and bringing together physical, financial and human resources and establishing productive relations among them for the achievement of specific goals.

Process of Organising:

  1. Division of work: first step in organising is to divide the work to be done into specific activities which are grouped into jobs that consist of certain tasks.
  2. Grouping Jobs & departmentalization: is to combine or group similar jobs into larger units called departments, divisions or sections.
  3. Assignment of Duties: once the departments have been formed each employee is placed under the charge of an individual.
  4. Establishing Authority Relationships: The various members of the organisation who performs the job, are linked by authority responsibility relations.

Importance of Organising

  1. Benefits of specialization: activities are grouped on the basis of similarity so promotes specialization speedy performance of tasks & efficiency.
  2. Role clarity: The jobs of managers and non- managers are clearly defined and differentiated. It helps to remove duplication of work.
  3. Clarifies Authority and Responsibility: provides a clear – cut definition of authority enjoyed by each manager and his jurisdiction of activity.
  4. Avoiding Duplication of work: Organising helps in avoiding du12plication of work and overlapping in responsibility among various employers and work units.
  5. Coordination: Organising serves as mechanism for unification of efforts of people, harmony of work is brought about by higher level managers.

Organisational structure: - defines as framework within which managerial & operating tasks are performed. It specifies relationship between work and people in an organisation.

Functional structure: - activities are grouped & departments are created on the basis of specific function to be performed. Mostly suitable for the organisation which have high degree of functional specialization with diversified activities.

Divisional structure: - For large diversified organisations activities of personnel are grouped on the basis of different products manufactured. Suitable for those business enterprises where a large variety of products are manufactured using different productive resources.

Formal & Informal Organisation

BASIS Formal organisation Informal organisation
Formation deliberately planned and created by management Emerges spontaneously as a result of social interaction among people.
Purpose To achieve planned organizational goals To satisfy social & cultural needs.
Communication Formally establishes official lines of communication Informal communication based on convenience.
Leadership Managers are leaders by virtue of their superior positions Leaders are chosen.
Stability It is stable and predictable Neither stable nor predictable.

Delegation: process of entrusting responsibility and authority and creating accountability of the person whom work has been given.


  1. Reduces work load of managers
  2. Basis of superior – subordinate Relations.
  3. Improves managerial effectiveness
  4. Motivates subordinates
  5. Facilitates development of managers
  6. Facilitates organizational goals.

Elements of delegation:

  1. Responsibility
  2. Authority
  3. Accountability

Decentralisation: refers to systematic delegation of authority at all levels of management and in all departments of the organisation for taking decision at respective levels.


  1. Reduction in work load of top executives
  2. Improving motivation
  3. Improved Team work
  4. Quick Decision making
  5. Promoters Initiative and creativity