NCERT Solutions for Class 12 Business Studies Chapter 5: Organising; Download in PDF

This article presents well-prepared NCERT Solutions for Class 12 Business Studies Chapter 5, Organising. You can also find a PDF download link for complete NCERT Solutions of the chapter mentioned above.

Download NCERT Solutions for Class 12 Business Studies Chapter 5
Download NCERT Solutions for Class 12 Business Studies Chapter 5

NCERT Solutions for Class 12 Business Studies Chapter 5:NCERT Textbooks consists of a few exercise questions present at the end of each chapter. These are a combination of theoretical and practical questions designed to test your knowledge on all grounds. Jagran Josh has prepared concise, appropriate and easy solutions for these questions. This article consists of NCERT Solutions for Class 12 Business Studies Chapter 5. Practise of these NCERT Solutions will assist you in reaching at great heights in academics.

Along with practise of NCERT Solutions you should also follow the below-mentioned steps for scoring good marks in upcoming CBSE Board Examinations 2023-2024:

  • Read the chapter thoroughly
  • Practise in-text questions
  • Apply concepts in real life situations
  • Understand the current market situation
  • Practise answer writing
  • Stay updated about recent developments in the syllabus and exam pattern


Career Counseling

 CBSE Class 12 Business Studies Revised Syllabus 2023-2024 (PDF)

CBSE Class 12 Business Studies Sample Paper 2023-2024(PDF)


Find complete NCERT Solutions for Class 12 Business Studies Chapter 5 below:

 Very Short Answer Type:

1.Identify the network of social relationships which arises spontaneously due to interaction at work.

Answer. Informal Organization is the network of social relationships that arises spontaneously due to interaction at work.


2.What does the term ‘Span of management’ refer to?

Answer. Span of Management refers to the number of subordinates that can be effectively managed by a superior. It is important in forming organizational structure. It helps to identify an effective manager. Effective manager is considered as the one that has large span of management. It depends on capacity of supervisor, time available for supervision etc.


3.State any two circumstances under which the functional structure will prove to be an appropriate choice.

Answer. Two circumstances under which functional structure can be an appropriate choice are:

  • Large size of the organization
  • Requirement of Specialization in the organization

4.Draw a diagram depicting a functional structure.

Answer.  The diagram of a functional structure is as follows:


5.Company has its registered office in Delhi, manufacturing unit at Gurgaon and marketing and sales department at Faridabad. The company manufactures the consumer products. Which type of organisational structure should it adopt to achieve its target?

Answer. The company should adopt ‘Functional Organizational Structure’ to achieve its target because it promotes control and co-ordination, reduces cost and assists in efficient management.


Short Answer Type:

 1.What are the steps in the process of organising?

Answer. Steps involved in the process of organising are:

  • Identification and division of work- On the basis of plans made by the organization, work has to be identified and divided among the employees. This is done to reduce the burden of work and avoid duplication of work.
  • Departmentalisation- After the division of activities among employees, the activities smaller in nature and comparatively smaller in nature are clubbed together. This process of grouping is called departmentalisation. Departments can be categorized on a variety of basis. For example: products and geographical territory.
  • Assignment of duties- Then, work is assigned to each individual on the basis of specialization, job position, skills competencies etc. People who are at low position are governed by a superior.It is essential for effective performance that a proper match is made between the nature of a job and the ability of an individual.
  • Establishing authority and reporting relationships- Each individual must be aware about whom he has to take orders from and report to. This helps to create a hierarchical order in an organization and assists in smooth co-ordination between different departments.

2.Discuss the elements of delegation.

Answer. The elements of delegation are as follows:

  • Authority- He/she is an individual who commands his/her subordinates, checks their work and also takes action within the scope of his position. The concept of authority was brought in by Scalar-chain. In a formal organization, authority is denoted by the position that person holds and extent of authority goes in an ascending order. Thus, authority flows from top to bottom. These relationships are important for creation of the hierarchical structure and assurance that the work would be done since there’s an authority in your close circle to take action if your work is incomplete. An authority has to function within the boundaries set by laws, rules and regulations of the organizations.
  • Responsibility- Obligation of a subordinate to complete his/her assigned duty. A subordinate is bound to perform a duty alloted by the superior. Therefore, it flows upwards, i.e, subordinate will be responsible to superior. If authority granted is more than responsibility, it may lead to misuse of authority, and if responsibility assigned is more than authority it may make a person ineffective.
  • Accountability- It means being answerable for the final outcome. Both subordinate and superior are accountable for the outcome. It can’t be delegated and flows upwards. Subordinate is accountable to his superior and the superior is accountable to his commanding person. It can be stated that while authority is delegated, responsibility is assumed, accountability is imposed. Responsibility is derived from authority and accountability is derived from responsibility.

3.How does informal organisation support the formal organisation?

Answer. Informal organization supports the formal organization in following ways:

  • Informal organization helps formal organization by fast transfer of communication since informal organization doesn’t have a fixed line of communication.
  • Informal organization comforts the members of an organization and fulfills their social needs. This improves their job satisfaction since it adjusts a person into their work environment.
  • Informal organizations leads to fulfillment of company’s objectives since sharing of ideas, learning and teaching, discussion on important topics, awareness of AI Technologies etc takes place.

4.Can a large sized organisation be totally centralised or decentralised? Give your opinion.

Answer. An organization is said to be centralised when decision making powers lie at the top management level and it is decentralised when these authorities are delegated. An organization can never be either centralised or decentralised. As a company grows in size and complexity, they tend to move towards decentralisation since employees in such organizations are directly and closely involved with certain operations and possess more knowledge about them than the top management. But complete decentralization would create the need for top management and vice versa. Therefore, both of them should be balanced.


5.Decentralisation is extending delegation to the lowest level. Comment.

Answer. Decentralisation is an explanation of division of decision making responsibility among the hierarchical levels. It stands for share in decision-making authority with the low levels. This results in fast and accurate decision making since people from low level are directly associated with tasks and hence can take better decisions. Louis Allen defined decentralisation as “Decentralisation refers to systematic effort to delegate to the lowest level all authority except that which can be exercised at central points”. Delegation remains to a specific level but decentralisation of authority reaches out to almost all levels and the entire organizatioin.

6.Neha runs a factory wherein she manufactures shoes. The business has been doing well and she intends to expand by diversifying into leather bags as well as western formal wear thereby making her company a complete provider of corporate wear. This will enable her to market her business unit as the one stop for working women. Which type of structure would you recommend for her expanded organisation and why?

Answer.  Neha should choose divisional structure for her expanded organization because:

  • She wants to launch new product lines, divisional structure would promote flexibility and each division can function as an autonomous unit.
  • This structure would treat each product line as separate ‘profit center’ and would help her to know profit from each product line.
  • It can help her in future expansion without disturbing the existing units.

7.The production manager asked the foreman to achieve a target production of 200 units per day, but he doesn’t give him the authority to requisition tools and materials from the stores department. Can the production manager blame the foreman if he is not able to achieve the desired target? Give reasons.

Answer. No, Production Manager cannot blame the foreman for the non-accomplishment of work since he has violated the principle of ‘Parity of Authority and Responsibility’. A subordinate when given the responsibility of fulfillment of a particular task, then he/she should be given appropriate authority for the same.


To find further NCERT Solutions for Class 12 Business Studies chapter 5, click on the link below

Download NCERT Solutions for Class 12 Business Studies Chapter 5

Important Resources for CBSE Board Examinations 2023-2024

CBSE Class 12 Syllabus 2023-24 (All Subjects)

CBSE Class 12 Sample Papers 2023-24 (All Subjects)

NCERT Books for Class 12 (All Subjects)

NCERT Solutions for Class 12 (All Subjects)

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