Ashwin's Commerce World - Organising and Centralisation/Decentralisation Concepts

A comprehensive set of practice Q&A flashcards covering organising, formal vs informal organization, functional/divisional structures, delegation, and centralisation/decentralisation as taught in the Ashwin's Commerce World notes.

What is the meaning of organising?

The process of identifying and grouping various activities, bringing together physical, financial and other resources, and establishing authority relationships among job positions.

What does the organising function result in?

Creation of an organisational structure which serves as the framework within which the enterprise functions.

What is Specialisation in organising?

Work is divided and sub-divided into compact and convenient jobs.

How does organising promote optimum use of human resources?

Jobs are clearly defined and differentiated, helping to select the right person for the right job and avoid duplication of work.

How does the organisation structure aid coordination and cooperation?

It serves as a mechanism for unifying and harmonising efforts, with clear authority and communication channels.

What is the security and support benefit of a sound organisational structure?

Provides security, support and satisfaction to managers and workers, with a definite status for each person.

How does organising support growth and diversification?

Provides a framework to expand, multiply strength, keep activities under control, and undertake more without dislocation.

How does adaptation to change relate to organisation?

A flexible structure facilitates adjustment to changes in workload and external environment, including new methods and technology.

What is the link between training and development and organising?

Encourages initiative and managerial talent development through delegation, and supports merit-based rewards and promotions.

What is the first step in organising?

Division of Work: dividing total work into specific jobs to enable specialisation.

What is departmentation?

Grouping jobs or activities into manageable units under a manager; departments/divisions are formed and linked by interdependence.

What bases can be used for grouping activities (departmentation)?

Functions, products, territories, customers, and production processes.

What factors should be kept in mind while grouping activities?

Adequate specialisation, coordination among departments, economy in administrative expenditure, ease of control, and attention to all activities.

What does assigning duties involve?

Assigning groups of activities to individuals best suited, considering qualifications, experience and aptitudes.

What is delegation of authority?

Assigning duties and giving subordinates the authority to perform them, with the manager retaining responsibility.

What is meant by a hierarchy in delegation?

A chain of superior–subordinate relationships through which authority flows from top to bottom, with content decreasing at lower levels.

What is coordinating activities?

Synchronising the activities and efforts of individuals to achieve coordinated performance; involves formal and informal relationships and different types of organisations.

What is formal organisation?

A structure of well-defined jobs with definite authority and responsibility, official lines of communication, and a chain of command.

What are the basic characteristics of formal organisation?

Deliberately created by top management, based on specialisation, clearly defined authority and responsibility, delegated authority, written rules, official communication lines, and objectives.

What are the advantages of formal organisation?

Clear duties, unity of command, easy to fix responsibility, stability, and a framework for all activities.

What are the disadvantages of formal organisation?

Rigidity, procedural delays in communication, potential neglect of human relationships, and a partial view of how the organisation works.

What is informal organisation?

A network of social relationships that emerges spontaneously among employees, with voluntary membership and no written rules.

What are the salient features of informal organisation?

Unplanned, arises from social interactions, based on common interests and culture, voluntary membership, no written rules, and group norms.

What are some advantages of informal organisation?

Sense of belonging, relief from monotony, problem-solving support, protection from external pressure, and a channel for informal communication.

What are the limitations or disadvantages of informal organisation?

Conflicting norms with formal standards, resistance to change, role conflict, conformity pressures, and potential for rumours.

What is a functional structure?

A structure where major functions are organized as separate departments, with functional specialization.

What are the advantages of a functional structure?

Logical, time-proven form; occupational specialization; ensures coverage of all activities; easier supervision and control; suitable for highly specialized operations.

What are the disadvantages of a functional structure?

Limited view of the organisation as a whole; hard to assign responsibility for problems; potential for top-management inflexibility and interdepartmental rivalry.

What is a divisional structure?

Activities are grouped into divisions based on products; each division handles its own production, sales and finance.

When is a divisional structure particularly useful?

When product expansion/diversification and product-specific characteristics are significant, often with high capital needs.

What are the advantages of a divisional structure?

Improved coordination within product lines, focus on each product, easier evaluation of division performance, and easier expansion by adding new divisions.

What are the disadvantages of a divisional structure?

Duplication of facilities and functions, reduced centralization benefits, potential underutilisation of capacity, and inter-divisional funding conflicts.

What is delegation of authority in practice?

The manager assigns part of his work to others and grants corresponding authority, while remaining responsible for proper performance.

What are the key merits of delegation?

Relief to top executives, clear chain of command, better use of specialisation, quicker decisions, improved motivation, executive development, and growth of the organisation.

What is the scalar chain in delegation?

The chain of superior–subordinate relationships that gives meaning to managerial jobs and directs the flow of authority from top to bottom.

How does delegation contribute to quick decisions?

Lower-level employees can decide quickly within policy, being closer to local conditions.

How does delegation aid executive development?

Gives subordinates opportunities to develop decision-making and leadership skills for higher responsibilities.

What are the merits of decentralisation?

Reduction in burden on top executives, increased subordinates’ motivation, better and faster decisions, promotion of innovation and creativity, development of managers, and growth/diversification.

What are the demerits of decentralisation?

Potential lack of coordination, lack of uniformity in policies, higher administrative overheads, not suitable for small firms, and possible external constraints.

What is centralisation?

Concentration of authority at the top level of management, with little delegated authority to middle and lower levels.

What is decentralisation?

Dispersal of authority to all levels of management, with top management retaining major decisions but empowering others to act within their areas.

What is the main purpose of centralisation?

To ensure control and coordination, with a heavier burden on top executives.

What is the main purpose of decentralisation?

To speed up decisions and to motivate and develop subordinates.