Under ________, a manager gains experience in all functions related to a particular product.

ESSENTIAL POINTS TO SOLVE CASE STUDIES
Concept of Organising
Organising can be defined as a process that starts implementation of plans by specifying job positions and defining relationships, and effectively distributing resources for attainment of organisational goals.
“Organising is the process of defining and grouping the activities of the enterprise and establishing authority relationships among them.” — Theo Haimann
“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.” —Louis Allen

Steps in the Process of Organising

1. Identification and Division of work. The amount of work to be done is identified and is divided into tasks which are achieveable.
2. Departmentalisation. Related activities are clubbed under the banner of one department.
3. Assignment of Duties. Job positions are created and the concerned duties are assigned for these positions.
4. Establishing reporting relationships. It is important to clarify who will report to whom in order to eliminate any chances of conflicts and confusions. The outcome is the formation of hierarchical structure of management.

Importance of Organising

1. Benefits of specialisation. Organising leads to specialisation, as the assigned work is performed regularly by the concerned person.
2. Clarity in working relationships. The reporting relationships get clarified after proper organising.
3. Optimum utilization of resources. There is reduction in duplication of efforts and overlapping of activities after proper organising.
4. Adaptation to change. A well organised business firm can adapt to external changes.
5. Effective administration. On the administration front an organisation becomes better as all the job positions and working relationships are clearly defined.
6. Development of personnel. When jobs are assigned through organising the employees learn and develop in actual work environment.
7. Expansion and growth. A properly organised structure can be replicated as and when required leading to opening of new branches.

Organisation Structure. An organisation requires a proper framework to do various managerial and operational tasks. This framework is known as Organisation Structure.
The role of organisation sturcture is to develop a proper relationship among the people (employees), work (tasks, activities, projects) and resources (information, human, finance, material).
An organisation structure cannot be seen unless and until it is represented on a piece of paper.
Span of Management. Span of management means the number of employees who are effectively managed by a superior or manager. The word ‘effectively’ is very important here. There is no use of increasing the span of a manager if it reduces the effectiveness of his management.

There are two types of Organisation Structure
A. Functional Structure is the organisation structure which is formed on the basis of functional specialisation. It is good for a company which is dealing in a single product and is increasing or expanding itself.

1. It helps in increasing coordination among the various activities of the business as the closely related activities are grouped under the same department.
2. The specialisation, which comes out due to division of work here is based on occupation/ job/activity.
3. All the tasks of managerial and operational nature are properly taken care of under functional structure.
4. Each collection of connected activities like Marketing, Purchase, Production, etc. get proper and required attention.
5. It is a very good structure to train the employees and make them specialists in their respective areas like Marketing, Human Resources, etc.
6. As all the connected activities are clubbed under one functional department, the activities are not repeated. Therefore, duplication and wastage of efforts and resources is minimised.

Disadvantages of Functional Structure:

1. The departmental goals in the functional structure take importance over the organisational goals.
2. The functional heads have experience and knowledge only about their departments leading to their inflexible attitude towards each other.
3. The basic nature of departments varies from each other so there is a lack of flow of information on a regular basis. This decreases coordination.
4. The departments try to have their own quota of interests fulfilled leading to conflict of interests.

Suitability. In case the size of an organisation and the diversity of activities handled is ^ increasing, it is advisable for a firm to adopt functional structure.

B. Divisional Structure is the organisation structure which is formed on the basis of product specialisation. It is good for a company which is dealing in multi products (more than one product).

1. Product specialisation. Divisional structure permits full use of specialised production facilities. Personal skills and specialised knowledge of production managers is focussed and fully utilised within the division.
2. Responsibility for poor performance of the division can easily be fixed on the divisional heads. They are accountable for revenue, costs and profits of their division.
3. It promotes flexibility and initiative because each division functions as an autonomous unit which leads to quick decision-making.
4. It facilitates expansion and growth as a firm is able to add new divisions without disturbing the existing operations of the business enterprise.
5. Quick decision-making. Every Division works as a separate unit and is independent. The Divisional Manager gets the right of taking any decision regarding his division on his own without consulting other divisional managers.

Disadvantages of Divisional Structure:

1. Divisional structure is costly as all the functions like HR, Purchase, etc. are replicated
   with addition of a new product.
2. Chances of conflicts are always high among various divisional heads as they can try to have more funds from the top management in comparison to each other.
3. Though it is good to have an influential divisional head yet sometimes his influence and authority can cause problems for the top management as the employees may feel more loyal towards him.

Suitability. When the number of products handled by a company is more, handling diverse activities under different products of different nature will be easier for a compnay in a divisional structure.

Formal Organisation and Informal Organisation
Formal Organisation. A formal organisation refers to the organisation structure which is framed by the top management to achieve organisational goals and is bound by rules and procedures.

Features of Formal Organisation

1. In formal organisation, job positions and reporting relationships are clearly stated.
2. It is run according to the set rules and procedures.
3. Top management purposely frames the structure of formal organisation in order to achieve its desired objectives.
4. It is the framework of a formal structure in which activities of all departments are coordinated.
   The main focus is on work and not interpersonal relationships.

Advantages of Formal Organisation

1. It is easy to fix responsibility as authority-responsibility relationships are clearly stated.
2. Role of each member is clearly defined so wastage of efforts is minimised.
3. Formal structure ensures that an employee should report only to his boss and therefore unity of command is followed.
4. Proper formal structure brings stability to the organisation.

Disadvantages of Formal Organisation

1. Procedural delays may result due to communication on formal lines.
2. Strict following of rules and procedures may reduce creativity of the employees.
3. Sometimes human needs and grievances are not given proper attention.

Informal Organisation. Informal Organisation refers to the network of social relations formed due to the interaction among individuals. It is formed spontaneously as individuals interact and associate to fulfill their personal and social needs.
Features of informal Organisation

1. The origin is spontaneous and is within the formal organisation.
2. The norms of the group guide the members how to behave.
3. Independent channels of communication exist rather than scalar chain.

Advantages of Formal Organisation

1. Flow of information is fast as there are no set rules. .
2. Informal organisation within the formal organisation helps in the fulfilment of social needs.
3. Organisational objectives are achieved faster as various shortcomings of formal organisation can be overcome.

Disdvantages of Formal Organisation

1. A bad informal group can hamper the growth of the whole organisation.
2. An uncooperative informal organisation or group generally obstructs the introduction of positive changes by unnecessarily opposing them.
3. In order to get favour of the members of the informal organisation, even the responsible employees may go against the interest of the formal organisation.

Concept of Delegation of Authority
Delegation refers to the downward transfer of authority from a superior to a subordinate.

Elements of Delegation

 Importance of Delegation

1. Effective management. Delegation helps in effective management as the manager can focus on priority areas by leaving routine activities on his subordinates.
2. Employee development. Delegation helps bring out the hidden potential of an employee as the challenge of completing the delegated task helps in the development of new skills.
3. Motivation of employees. Employees feel motivated when they complete a delegated task as their image improves in the eyes of the management.
4. Facilitation of growth. Delegation helps create a skilled employee base, which can take new challenging projects and positions.
5. Basis of management hierarchy. The superior-subordinate relationships are established by delegation. These relationships form the hierarchy of management
6. Better coordination. The formation of authority-responsibility relationships through delegation helps in removing confusion about the assigned tasks and activities.

Centralisation
Centralisation of authority means concentration of decision making authority at higher or top levels of management. It refers to a situation where all decisions on all matters are taken by one or a few managers at relatively higher levels. Retention of all decision making functions by higher levels of management makes the organisation centralised.

Decentralisation
Decentralisation refers to transfer of decision making authority throughout all the levels of an organisation.

Importance of Decentralisation

1. Promotes initiative among subordinates as more freedom is given through transfer of decision making authority.
2. Develops managerial talent for the future as managers can now handle major challenges without interference from there superiors.
3. Quick decision making as the decision making authority is placed near the point of action.
4. Relief to top management as now they can focus on more important affairs.
5. Facilitates growth as with decentralisation greater autonomy is granted to the lower level managers who then gain more spirit of competition.
6. Better control. In order to evaluate the performances of decentralised units, better control mechanisms have to be adopted like installation of CCTVs.

Difference between Delegation and Decentralisation

 CASE STUDIES

Question 1.
‘Rats & Fleas’ is a pesticide producing company. The company identifies the various types of activities to be done. For this it divides the work into various departments. The company then gets involved in its business with a lot of zeal.
After one year of successful run the company decides to transfer the decision making authority to the lower most level of the employees. For this a major policy decision is taken.
Identify the function of management highlighted above and another concept also. Give the next two steps of this function. Also give one importance of the other concept which you have identified.
Answer:
The function of management highlighted in the above case is ‘Organising’. This can be seen in the first paragraph.
The other concept of management which is highlighted in the second paragraph is ‘Decentralisation’. After one year of successful run the company decides to transfer the decision making authority to the lower most level of the employees. For this a major policy decision is taken.
The next two steps of this function ‘Organising’ is

• Assignment of duties and
• Establishing reporting relationships.

One importance of ‘Decentralisation’ is Relief to the top management.

Question 2.
Alliance Ltd. is engaged in manufacturing plastic buckets. The objective of the company is to manufacture 100 buckets a day. To achieve this, the efforts of all departments are coordinated and interlinked and authority-responsibility relationship is established among various job positions. There is clarity on who is to report to whom.
Name the function of management discussed above.
Answer:
Organising.

Question 3.
To make the annual function of the school successful the principal of the school divided all the activities into task groups each dealing with a specific area like rehearsals, decoration, stage management, refreshments etc. Each group was placed under the overall supervision of a senior teacher. Identify the function of management performed by the Principal in doing so.
Answer:
Organising.

Question 4.
To make the sports day of the school successful the Headmaster of the school divided all the activities into task groups each dealing with a specific area like holding of event, arrangement of medals, refreshments etc. Each group was placed under the overall supervision of a senior teacher. The physical education teacher was made responsible for holding different events, the home science teacher for refreshments and the Maths teacher for medals.
Identify the function of management performed by the Headmaster in doing so.
Answer:
Organising.

Question 5.
An Indian information technology company presently employing 10,000 people, desires to expand its business in manufacturing, trading, etc. It wants to become a global company. To achieve its objectives it has started shifting from a centralised to a decentralised management system.
Identify the management function being performed by the company to become a decentralised company.
Answer:
Organising.

Question 6.
Due to proper organizing and division of work, a company goes for systematic assignment of jobs among the employees, wmch importance of organizing is highlighted here? Give three more importance of organizing?
Answer:
The importance of organizing which is highlighted here is ‘Benefits of specialisation’.
Three more importance of organizing:

• Clarity in working relationship.
• Adaptation to change.
• Effective administration.

Question 7.
A school principle believes in proper organizing. He time and again tells his staff to be organized as he believes that through proper organising they can move away from present norms and accept new challenges with success. They will be able to add more activities and projects in their yearly plan.
Which importance of organizing has been indicated in the above paragraph?
What is Organisation Structure? Which type of organisation is ‘School’?
Answer:
A school principle believes in proper organizing. He time and again tells his staff to be organized as he believes that through proper organising they can move away from present norms and accept new challenges with success. They will be able to add more activities and projects in their yearly plan.
The importance of organizing which is indicated above is ‘Expansion and Grdwth’. Organisation structure is the framework within which managerial and operational tasks are performed within an organisation. It explains the relationship between people, the work to be done by them and the resources to be utilized by them.
School is a formal organisation.

Question 8.
‘Aasmaan Colours’ is a profit making colour producing company. The company deals in making different types of colours used in painting. The organisation has always been systematic in its approach and due to good organizing has seen a continuous increase in its revenue. Workers are given their respective jobs clearly which leads to gaining of experience since they do their respective jobs on a regular basis leading to high
productivity. The organisation has many challenges and it wants to improve. There is no doubt in the lines of communication and everyone knows who has to report whom. With passage of time, there is more need to connect with the employees. They are the most important asset to the organisation. When managers delegate work to their subordinates they set themselves free from routine jobs and this leads to great amount of learning for the subordinates in practical situations.
Which importance of organizing has been highlighted in the above case?
How would a company adapt to changes with the help of organizing?
Answer:
The importance of organizing highlighted in the above case:

1. Benefits of specialisation. Workers are given their respective jobs clearly which leads to gaining of experience since they do their respective jobs on a regular basis leading to high productivity.
2. Clarity of working relationships. There is no doubt in the lines of communication and everyone knows who has to report to whom.
3. Development of personnel. When managers delegate work to their subordinates they set themselves free from routine jobs and this leads to great amount of learning for the subordinates in practical situations.

The company would adapt to the changes in the environment by modifying the organisation structure according to the requirement. The relationships among various job positions can be altered or changed according to the requirements. Even if a change is required in the managerial levels the Company may have to go ahead with it.

Question 9.
An organisation is working by clubbing similar related jobs under different departments. The HR department is not in direct touch with the Marketing Department and this has created problems. The HR head feels that he only knows about the HR department and similar is the case with the Marketing department. However the truth is both of them have limited and specific skills.
Which type of organisation structure does this organisation has? What will be the outcome of this mode of thinking in the near future for the organisation? Name one more disadvantage of this type of organisation structure?
Answer:
The type of organisation structure which is present is functional structure. Similar related jobs are clubbed under one department.
The reason for the limited scope of vision for both these department heads is their limited set of skills and knowledge only about their departments. In the future these departmental heads won’t be able to reach the top most level of management. This means their managerial development will not reach its peak because people at the top management should have knowledge about every department.
One more disadvantage of this type of structure is the resulting of conflicts.

Question 10.
Identify the following into formal and informal organisation:

1. Mountain cold storage has a well defined structure of authority relationships. This structure is created after a lot of planning by the top level management.
2. Tanuj Drinks is an organisation which helps quench the thirst of people sitting on
   roadside and parks on Sundays. This organisation has originated from Mountain cold storage spontaneously.
3. An organisation holds its meeting according to the mood of the members. It has no set pattern of behavior.
4. An organisation which is run in Central Delhi is known for its rigid nature.
5. Cricket Club is an organisation in which the authority of the members, constituting it, is because of their positions in the management.
6. Translife is an organisation in which only the managers are the leaders.

Answer:

1. Formal Organisation. As it is a structure of authority relationships.
2. Informal Organisation. It emerged spontaneously from a formal organisation.
3. Informal Organisation. No set pattern of behaviour is there.
4. Formal Organisation. It has rigid nature.
5. Formal Organisation. Authority of the members is due to their position in the management.
6. Formal Organisation. Only managers because of their formal positions are leaders not because of their personal qualities.

Question 11.
‘Steelo Ltd/ decided to set-up its steel manufacturing factory in the backward area of Orissa where very less job opportunities were available. People of that area welcomed this effort of ‘Steelo Ltd.’ To attract people to work in its factory it also decided to provide many other facilities like school, hospital, market, etc. in the factory premises.
‘Steelo Ltd.’ started earning huge profits. Another competing company asked its production manager ‘Aslam’ to investigate the reasons of earning huge profits by ‘Steelo Ltd.’
Aslam found that in both the companies there was systematic coordination among the various activities to achieve organizational goals. Every employee knew who was responsible and accountable to whom. The only difference was that in his organization communication took place only through the scalar chain whereas ‘Steelo Ltd.’ was allowing flow of communication in all the directions as per the requirement which lead to faster spread of information as well as quick feedback.

1. Identify the type of organization which permits ‘Steelo Ltd.’ the flow of communication in all the directions.
2. State another advantage of the type of organization identified in (a) above.
3. State any two values which ‘Steelo Ltd.’ wanted to communicate to the society

Answer:

1. Informal organization
2. Advantage. Informal organization helps in fulfilling the social and affiliation needs of the members of the organization and thus enhances the level of job satisfaction.
3. Two values communicated by Steelo Ltd. are:
   • Development of backward area thereby fulfilling social responsibility.
   • Providing employment to the needy and creating employment opportunities.

Question 12.
In the above cases identify the ‘basis’ on which these organisations are categorized into formal or informal.
Answer:
The basis of each case is given:

1. Basis: Definition or Meaning
2. Basis: Origin
3. Basis: Behaviour
4. Basis: Nature
5. Basis: Authority
6. Basis: Leadership

Question 13.
Lalit has joined a manufacturing firm as a worker. He has recently started working on the shop floor. The management is quite liberal and has allowed the workers to form a hockey club. The workers assemble and play hockey in the evening after the completion of their work. However the management is a little worried about the outcomes. The management is trying to change the schedule of the workers but they are unsure about the reaction of the workers. Though majority of the workers are sincere, like Lalit, yet the management is concerned about their companions in the hockey club.
Which type of organisation is the hockey club? Name two disadvantages which you can predict from the above case?
Answer:
The type of organisation which is discussed above is Informal Organisation (Hockey Club). The two disadvantages which can come up in the above case are:

1. The management may be unsuccessful in implementing changes. As here the management is trying to implement changes and the hockey club members may oppose them by showing unity.
2. The informal organisation (hockey club) may pressurize the workers to agree to its demand and this can affect the interests of the organisation in a bad manner.

Question 14.
Identify the type of organisation structure in the following cases:

1. Apexa Glue is a manufacturing company based upon functions and has important departments like HR, Marketing, Finance, etc.
2. Ravi runs a company in Hyderabad. The company is known for its product specialisation and has a lot of reputation in the market.
3. Nitin is an owner of a reputed manufacturing company. However in his firm it is difficult to fix responsibility on a particular department.
4. Archana is a dynamic CEO. In her organisation she allows for autonomy and opportunity to perform multiple functions. This had led to managerial development in her employees.
5. Rajiv Bulbs is a city based flourishing company. Recently it has won award for being the most economical company as the functions are not duplicated in it.
6. Synchronisation of efforts is easy in Sigma Tubelights Ltd. as all the related functions related to a particular product are integrated within one department.

Answer:

1. Functional structure
2. Divisional structure
3. Functional structure
4. Divisional structure
5. Functional structure
6. Divisional structure

Question 15.
A company has been registered under the Companies Act with an authorized share capital of Rs.20,000 crores. Its registered office is situated in Delhi and manufacturing unit in a backward district of Rajasthan. Its marketing department is situated in Bhopal. The company is manufacturing Fast Moving Consumer Goods (FMCG).

1. Suggest with the help of a diagram a suitable organisation structure for the company.
2. State any three advantages of this organisation structure.

Answer:

1. Divisional structure:
   
   
2. Advantages of Divisional Structures:
   • Product specialisation helps in development of varied skills.
   • Helps in fixation of responsibility.
   • Promotes flexibility as each division is autonomous.
   • Facilitates expansion and growth.

Question 16.
Ajanta Foods Ltd. is engaged in the trading of ‘Noodles’. It has its registered office in Kolkata, manufacturing unit in Solan and marketing department at Delhi. Which type of organisational structure the company should adopt to achieve its target?
Answer:
Functional Organisation Structure.

Question 17.
In the above cases (in Question 9) identify the ‘basis’ on which the organisation structures are categorized into functional or divisional.
Answer:

1. Basis: Formation
2. Basis: Specialisation
3. Basis: Responsibility
4. Basis: Managerial development
5. Basis: Cost
6. Basis: Coordination

Question 18.
A Company named Mahi Cycles has decided to start a new branch in the Middle East. The company has recognised the amount of work to be done in number of hours. The company has found out that it will take 25000 hours of man work and has subsequently divided the number of hours for different operations. The real challenges of the company begin here. Very methodically responsibility of the recognized amount of work has been given to different individuals according to their capabilities.
Which function of management is highlighted above? Identify the two steps of this function indicated above.
Answer:
The function of management which is highlighted above is ‘Organising’.
The two steps of Organising which are indicated in the above case are:

1. Step 1: Identification and division of work. The Company has found out that it will take 25000 hours of man work and has subsequently divided the number of hours for different operations.
2. Step 2: Assignment of duties. Very methodically responsibility of the recognized amount of work has been given to different individuals according to their capabilities.

Question 19.
Rolling Eagle is an organised firm. The firm has been considered as one of the major producers of steel in the manufacturing industry. A group of people from foreign countries have come to India to find out the reason for their success. They found that there is proper utilisation of resources and this has led to a great control of management over every aspect. The company has reached this place after a lot of research and its application. Every person knows what he has to do and this has led to the achievement of great skill development at ‘per employee level’. The company has a monitoring cell which keeps track of all the major developments around. This has made it possible for the company to change itself according to the requirements of the outside environment.
In the above case which concept of management is highlighted? Discuss its three types highlighted in the above case?
Answer:
The concept of management which is highlighted above is ‘Importance of Organising’.
The three different types of’Importance of Organising” indicated above are:

1. Optimum utilisation of resources and effective administration. They found that there is proper utilisation of resources and this has led to great control of management over every aspect.
2. Basis of specialisation. Every person knows what he has to do and this has led to the achievement of great skill development at ‘per employee level’.
3. Adaptation to change. This has made it possible for the company to change itself according to the requirements of the outside environment.

Question 20.
Kaamna is a bright young management trainee. After six months of testing by her organisation she is given charge of her office as an assistant manager. She starts her job with a lot of enthusiasm but realises that it won’t be possible for her to continue without sharing her tasks. She keeps a secretary who takes orders from her. This has reduced her burden of work and has helped her to focus on priority assignments.
Which concept of management is discussed in the above case? Name two importance of this concept.
Answer:
The concept of management which is discussed above is ‘Delegation’.
The two importance of Delegation:

• Delegation helps in the development of employees.
• Delegation acts as the basis of management hierarchy

Question 21.
Aman Chadha started ‘Bulls Eye’ a company for providing cyber security solutions to businesses. Its objective is to prevent, detect and respond to cyber attacks and protect critical data. He was a hardworking software engineer and an expert in cyber security. His reputation grew by leaps and bounds as he was not only a person of integrity but also did his work with utmost honesty and sincerity.
The business started growing day by day.
He was delighted when he was offered a big project by the Ministry of Defence. While working on the project, he found that the volume of work made it impractical for him to handle all the work by himself. He decided to expand the team. The company maintained a close liaison with a local engineering college. During a campus placement, Ishan and Vrinda were appointed to work for the new project.
He found the new employees capable, enthusiastic and trustworthy. Aman Chadha was thus, able to focus on objectives and with the help of Ishan and Vrinda, the project was completed on time. Not only this Aman Chadha was also able to extend his area of operations. On the other hand Ishan and Vrinda also got opportunities to develop and exercise initiative,

1. Identify and briefly explain the concept used by Aman Chadha in the above case which helped him in focusing on objectives.
2. Also, state any four points of importance of the concept identified in (a) above.

Answer:

1. The concept used by Aman Chadha in the above case is delegation. Delegation is the entrustment of responsibility and authority to another and the creation of accountability for performance which helps a manager to extend his area of operations.
2. Importance of delegation:
   • Effective management. By delegation managers get freedom from doing routine work. They get more time to concentrate on important matters.
   • Employee development. As a result of delegation, employees get more opportunities to develop new skills. It makes them better future managers.
   • Motivation of subordinates. Delegation of authority enhances the status of subordinates; and provides motivation to them, to improve their performance.
   • Facilitates organisational growth. Delegation helps in growth and expansion of the organisation by providing a ready workforce to take higher level responsibilities.
   • Basis of management hierarchy. Delegation of authority establishes superior- subordinate relationship which is the basis of hierarchy of management.

Question 22.
Alpha Tonics is a progressive company which has achieved new records in the field of medicines. Recently the company decided to go for a major shift in policy decision by handing over the decision making authority to the lower most level of employees. For this the company went for a thorough planning. Within four months the positive results of this major policy decision was recognizable. The employees felt a lot of development in their skill of taking first step to manage things on their own. Some major newspapers also covered this development. The production of the company increased. The company’s top management could now focus on new areas of innovation as the employees turned more reliable.
One day it so happened that the company’s manufacturing branch in south could not fulfill even half of its production target and the operations manager was held answerable for the assigned target. He was called in the office. When he was questioned it was found that his right to command the workers was insufficient and it should have been more to create results. The management decided to listen to him and he was given more power. When he went to the shop floor he told the workers that the standard of behavior of the workers should come from the official rules and procedures.
In the above case which concept of management has been related to in the first paragraph of the case?
Which two advantages of this concept have been highlighted in the above case?
Which two elements of delegation have been highlighted in the second paragraph of the case?
Which one feature of the informal organisation has been opposed by the operations manager in the above case?
Answer:
The concept of management highlighted in the first paragraph of the case is ‘Decentralisation’. Recently the company decided to go for a major shift in policy decision by handing over the decision making authority to the lower most level of employees.
The two advantages highlighted of this concept are:

1. It helps in development of initiative among subordinates. The employees felt a lot of development in their skill of taking first steps to manage things on their own.
2. It helps in developing managerial talent for the future. The Company’s top management could now focus on new areas of innovation as the employees turned more reliable.

The two elements of delegation highlighted in the second paragraph of the case are:

1. Accountability. The operations manager was held answerable for the assigned target.
2. Authority. When he was questioned it was found that his right to command the workers was insufficient.

The feature of informal organisation which is opposed here is ‘the standards of behavior originate from the group norms’ which should not be the case in a formal organisation bounded by rules and procedures.

Question 23.
Arnav Electricals is a company which has in recent years adopted the decentralized method of running the organisation. The company has grown dynamically and the decisions taken by the lower level management are implemented which saves time as people taking decisions are near the point of action. However, recently chairman of another manufacturing firm who is also a good friend of Arnav, chairman of Arnav Electricals, met him and asked him how he could evaluate performance of employees in case he goes for a decentralized approach. A few hours later Amav’s secretary calls him and asks for the list of works to be done the next day. He narrates him all the important tasks to be executed.
Which importance of decentralisation has been highlighted in the above case?
What advice do you think Arnav should give to have better control in a decentralized organisation?
Which concept of organizing is taking place between Arnav and his secretary?
Which type of scope does this concept have?
Answer:
The importance of decentralisation which is highlighted above is Quick decision making. (The company has grown dynamically and the decisions taken by the lower level management are implemented which saves time as people taking decisions are near the point of action).
The advice that Arnav should give in order to get a better control is to make the departments answerable for the final outcomes. Better control systems like balance score card, management information system and observation through CCTV cameras to be adopted to keep track of the employees’ performance.
The concept of organizing which is taking place between Arnav and his secretary is ‘Delegation’. As it is a superior subordinate relationship involving sharing of tasks of Arnav, the manager, here.
Delegation has a narrow scope as it is limited to superior and his immediate subordinate.

Question 24.
‘Pappu Sweets Makers’ is a sweets making company which has turnover in crores. In order to manage the work in the organisation the departments have been created on the basis of functions.
Examine the following situations of this organisation and give answers accordingly:
Situation 1: It is expected that employees who are performing similar tasks work under the same department. So the company now has HR, Marketing and Finance departments. The division is based on specific functions.
Situation 2: There are similarities in the tasks performed within the same department.
Situation 3: The profit is increasing month by month due to the success of this structure of the organisation.
Situation 4: There has been minimum duplication of efforts as the same department is taking care of single function.

1. Which type of organisation structure is discussed in the above case?
2. What type of specialisation exists in the above case in the organisation according to Situation 1?
3. What will be the outcome of Situation 2?
4. Why do you think the profit is increasing as given in Situation 3?
5. What will be the result of Situation 4?

Answer:

1. The type of organisation structure which is discussed in the above case is Functional Structure.
2. The type of specialisation which exists in the Situation 1 is ‘Occupational Specialisation’.
3. The outcome of Situation 2 will be increase in control and coordination.
4. The profit is increasing as given in Situation 3 as there is increase in managerial and operational efficiency.
5. The result of Situation 4 will be the resulting of economies of scale due to attainment of specialisation which will lead to lowering of cost.

Question 25.
Mr. Atul is the owner of a garment manufacturing company. He finds the spreading of message in his organisation a problem as a lot of time is taken. On many occasions he tried to bring different equipments and software systems to increase the speed of spreading of message. In the month of February this year a new type of machine was installed in the production department. He wanted to have a candid opinion about the utility of the machine from the employees but no one had the courage to tell him about the flaws of the machine on his face. After three months when there were shortcomings in the production of garments he realised his limitation. With passage of time he found the motivation level of employees too low. Many of the employees and workers were new and found the place unfamiliar and didn’t have friends which resulted in the lowering of production.

1. What would you suggest to Mr. Atul in this scenario?
2. Identify the three problems in the above case and give the outcomes of your solution given in the previous question on these problems.

Answer:

1. Mr. Atul should promote the growth of an informal organisation like cricket club, hockey club, etc. within his organisation for the workers.
2. The three problems which are highlighted in the above case and the outcomes of the respective solutions are:
   • The spreading of message in his organisation is a problem as a lot of time is taken. An informal organisation results in faster spread of information as the prescribe lines of communication are not followed.
   • Employees’ reaction towards plans and steps of the organisation are not clear to the management. Through the informal organisation a candid opinion of the employees can be found.
   • The social needs of the employees are not fulfilled. An informal organisation helps in the fulfillment of social needs which increases the confidence and satisfaction level of employees.

Question 26.
Mr. Manuj is an efficient manager working in a multinational company. He is fond of completing all his work by himself. As a human being he is very good and supportive and due to this he doesn’t want to put burden of work on others. Sometimes he is so much involved in doing different types of works in the office that he even misses the priorities areas.
Which concept of management is seen violated here? What is going to be another disadvantage of this violation? Also identify one disadvantage given in this case.
Answer:
The concept of management which is violated here is ‘Delegation’. He is fond of completing all his work by himself.
Another disadvantage. Employees need for recognition won’t be satisfied. They won’t be able to develop their skills if they will not share tasks in actual work environment.
The disadvantage of violating delegation given in the case is the lack of priority given by the manager to key areas as he is involved in tasks which can be handled by his subordinates.
Sometimes he is so much involved in doing different types of works in the office that he even misses the priorities areas.

Question 27.
‘Money Makers’ is a leading toy manufacturing company. With the help of proper delegation it has enabled the existence of proper workforce to take up leading positions in several challenging projects. The company has been in news for good reasons related with innovation. Due to proper delegation the relationships between the superiors and the subordinates are properly defined at various levels leading to creation of a strong management structure. Last year it was awarded for good administration. Due to proper delegation there is no overlapping of duties and duplication of efforts as there is clarity of working relationships.
The company is acting as a role model for other players in the industry. The productivity of the organisation has improved as it is very organized. Specific jobs are done only by specific workers resulting in increase of efficiencies at individual levels. The company is now thinking of going global and has recently opened a branch in Europe. However the conditions are going to be different there. Keeping in mind the strong organizing of the company it is expected that it will be able to modify its organisational structure and prove its superiority there also.
Recently a meeting is held by the top management. It is decided that the organisation will go for a major shift in policy decision and involve the lower level of management in decision making. The size of the company is growing so it will require more participation from the employees.

1. Identify the three advantages of delegation highlighted above.
2. Identify the two advantages of organizing highlighted above.
3. Find the concept given in the third paragraph of the above case.

Answer:

1. The three advantages of delegation indicated above are:
   • It helps in facilitation of growth. With the help of proper delegation it has enabled the existence of proper workforce to take up leading positions in several challenging projects.
   • It acts as the basis of management hierarchy. Due to proper delegation the relationships between the superiors and the subordinates are properly defined at various levels leading to creation of a strong management structure.
   • It helps in better coordination. Due to proper delegation there is no overlapping of duties and duplication of efforts as there is clarity of working relationships.
2. The two advantages of organizing highlighted above are:
   • Benefits of specialisation. Specific jobs are done only by specific workers resulting in increase of efficiencies at individual levels.
   • Adaptation to change. It is expected that keeping in mind the strong organizing of the company it is expected that it will be able to modify its organisation structure and prove its superiority there also.
3. The concept of management highlighted in the third paragraph of the above case is ‘Decentralisation’.

Question 28.
Samir Gupta started a telecommunication company, ‘Donira Ltd.’ to manufacture economical mobile phones for the Indian rural market with 15 employees. The company did very well in its initial years. As the product was good and marketed well, the demand of its products went up. To increase production the company decided to recruit additional employees. Samir Gupta, who was earlier taking all decisions for the company had to selectively disperse the authority. He believed that subordinates are competent, capable and resourceful and can assume responsibility for effective implementation of their decisions. This paid off and the company was not only able to increase its production but also expanded its product range.

1. Identify the concept used by Samir Gupta through which he was able to steer his company to greater heights.
2. Also explain any three points of importance of this concept.

Answer:

1. Concept used—Decentralisation
2. Importance of Decentralisation:
   • Reduces the burden of top management: A decentralized structure lays emphasis on the delegation of authority at all levels. This relieves the top management of routine and time-consuming tasks. Decentralisation reduces the burden of top executives and provides them enough time to concentrate on other important functions.
   • Develops initiative among subordinates: Decentralization creates self-confidence amongst the subordinates. This is because when lower managerial levels are given freedom to take their own decisions, they learn to depend on their own judgement. It works as an initiative and helps to promote creativity in them.
   • Develops managerial talent for the future: As a result of decentralization, employees get more opportunities to develop new skills. It makes them better future managers.
   • Prompt decisions: Decentralisation provides more freedom to lower level managers to take their own decisions. There is no more need to get approval from higher level. It helps in quicker and better decision-making.

Question 29.
In a progressive company the HR department decided to go for a unique way of controlling the performance of the employees. They decided to give every employee a balance score card through which their performance could be measured. The top brass could leave the decision making on the employees. Due to this change in the approach of the management the evaluation of employees and departments became easier. Since the decisions were not to be taken now by the top management only, the speed at which the decisions were taken got increased. The top management could now see the changes in the organisation. It was quite obvious that they could now sit, relax and focus on other areas.
Since this organisation is a formal organisation. In a recent assessment meeting by the top management it was found that the company was meeting the following criteria:

1. Mutual relationships among the employees were clearly defined.
2. Duties of all the employees were clearly specified.
3. There was a definite framework and each employee knew his role.

In the above case identify the highlighted advantages of decentralisation.
In the second part of the case the advantages of formal structure of the organisation are given. What are going to be the outcomes of each of these advantages?
Answer:
The advantages of decentralisation highlighted above are:

1. Decentralisation helps in better control. Due to this change in the approach of the management the evaluation of employees and departments also started to become easier
2. Decentralisation helps in quick decision making. Since the decisions were not to be taken now by the top management only, the speed at which the decisions were taken got increased.
3. Decentralisation provides relief to the top management. It was quite obvious that they could now sit, relax and focus on other areas.

The respective outcomes of the advantages of the formal organisation given in the case are:

1. It became easier to fix responsibility on the employees and the departments (as mutual relationships among the employees were clearly defined).
2. There was no scope for any doubt about the role of the employees (as duties of all the employees were clearly specified).
3. The goals were effectively achieved (as there was a definite framework and each employee knew his role).

Question 30.
Identify the category of ‘Organisation A’ in the following cases:

1. Organisation A originates from an organisation B which runs on rules and procedures. It has originated due to personal interaction among employees of organisation B.
2. Organisation A follows independent channels of communication.
3. Organisation A has a definite framework for the fulfillment of operational tasks.
4. Organisation A emerges spontaneously and is not willingly created by the management.
5. Organisaiton A helps in coordinating and streamlining the functioning of different departments.
6. Organisation A gives more stress on targets to be completed than the interpersonal relationships among the workers.
7. The behavior of members of Organisation A is not dependent on the rules and procedures of the parent organisation B (from which it has emerged).
8. There is lot of delay in decision making as the established chain of command is followed in Organisation A.
9. Organisation A helps in fulfilling the social needs of the members as they find likeminded people.
10. Organsiation A is deliberately created by the top management.

Answer:

1. Informal organisation
2. Informal organisation
3. Formal organisation
4. Informal organisation
5. Formal organisation
6. Formal organisation
7. Informal organisation
8. Formal organisation
9. Informal organisation
10. Formal organisation

Question 31.
Gargi Chemicals has many branches throughout the country. The company has recently adopted the decentralisation model. This has given the freedom to the lower level managers to take decisions on their own and have faith on their own judgments. This has really helped the organisation in taking the business to new heights. The employees are handling the projects independently and the experience thus gained can help them rise in the organisation earning them responsible positions in the management in the future.
The organisation knows that there is no substitute to delegation. In the past when the optional policy decision of decentralisation was not adopted even then the company was doing good. The managers knew that through proper delegation they could leave the routine work on subordinates and focus on priority areas. This was how the company grew. It was due to delegation that superior-subordinate relationship got established and there was clarity of reporting relationships.
The company works on product specialisation. We can see that in the future the managers will have full scope to develop their managerial talents.
In the above case identify the advantages of decentralisation.
Delegation is must for the organisation. What advantages of delegation are indicated in the above case?
What type of organisation structure does the company have?
Why will managers be able to maximize their potential in the above organisation structure?
Answer:
The company works on product specialisation. We can see that in the future the managers will have full scope to develop their managerial talents.
The advantages of decentralisation highlighted above are:

1. Development of initiative among subordinates. This has given the freedom to the lower level managers to take decisions on their own and have faith on their own judgments.
2. Development of managerial talent in the subordinates for the future. The employees are handling the projects independently the experience thus gained can help them rise in the organisation earning them responsible positions in the management in the future.

The advantages of delegation highlighted above are:

1. Delegation helps in effective management. The managers knew that through proper delegation they could leave the routine work on subordinates and focus on priority areas.
2. Delegation acts as basis of management hierarchy. It was due to delegation that superior-subordinate relationship got established and there was clarity of reporting relationships.

The type of organisation structure present is divisional structure as there is product specialisation.
The managers will be able to maximize their potential in the above structure because all concerned skills and abilities related to a particular product will be known to him as he will be responsible for the product. Such managers will have knowledge of all the departments and will be able to rise to the top in the management hierarchy.

Question 32.
Identify the type of organisation structure in the following cases:

1. A manager gains experience of all the related functions like HR, Marketing, Finance, etc.
2. A particular division may try to increase its profit at the cost of others in an organisation.
3. This type of structure is suitable for large business enterprises where several products are there for sale. It is easy to add new departments as new products are added.
4. The organisation believes in occupational specialisation and lays stress on specific functions.
5. In this type of organisation less focus is given on overall enterprise targets.
6. The size of organisation is large and there is a need for higher degree of specialisation.
7. There is a similarity of tasks within a department and more chances of control and coordination.
8. Problems of improper coordination may result as message will flow between functionally different departments.
9. There can be blame game as conflict of interests may arise between functionally different departments.
10. There are chances of flexibility and initiative as the departments function as autonomous units.
11. A manager supervises all the situations and functionalities related to a particular department. Here the authority is more than the other type of organisation structure.
12. The expansion and growth is easier as new units can be adjusted without disturbing the ongoing operations.
13. The training of managers is easier as the limited sets of skills are targeted for a particular employee.

Answer:

1. Divisional structure
2. Divisional structure
3. Divisional structure
4. Functional structure
5. Functional structure
6. Functional structure
7. Functional structure
8. Functional structure
9. Functional structure
10. Divisional structure
11. Divisional structure
12. Divisional structure
13. Functional structure

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