Questions (v)Efficiency and Productivity: Informal organisation fosters efficiency among the working personnel. Decentralisation is an optional policy. Span of management refers to the number of subordinates that a manager can efficiently handle. 3. What does the term ‘Span of management’ refer to? It provides a clear picture about the next step of planning, i.e., organising. It also helps in pre-identification of the future managers who are well-equipped with the necessary talent required to deal with managerial problems. Distinguish between centralisation and decentralisation. Ans:Â No, any organisation cannot work smoothly if it is either completely centralised or completely decentralised. 8. Generally, manpower is grouped on the basis of different products manufactured. Authority and responsibility must be accompanied by each other. Draw a diagram depicting a divisional structure. Higher work load on the top level managers. The concept of being accountable arises out of responsibility itself. While assigning the duties it must be ensured that the best suited and proficient person is selected for the work. Thus, certain degree of authority and control must be retained at the top level management so as to maintain integrity of the organisation. The extent of achievement of organisational objectives as well as the contribution of each department in meeting, the over all objectives can be ascertained. The organisation gains from the increased overall performance and thereby, grows. All exercise questions with solutions to help you to revise complete syllabus and score more marks in your examinations. That is, similar activities are grouped together. 3. The company manufactures the consumer products. Explain why an organisation would choose to be decentralised. It has a functional organisational structure with separate departments for Production, Marketing, Finance, Human Resources and Research and Development. Decentralisation helps analyse the performance of every department and also determine how each one of them are helping the organisation in fulfilling the objectives. When the power is delegated to lower level managers, they learn to face new challenges and find solutions for the problems themselves. When the authority and responsibility relationship are established in organising process then the manager must keep in mind the span of control. 8. Under what circumstances would functional structure prove to be an appropriate choice? This helps in clear identification of the performances by each department separately. Ans:Â Delegation refers to the transfer of authority and responsibility to the subordinates. Decentralisation also enables faster decision making within the organisation. Each of the divisions can then have further functional departments such as, under shoes, there will be resource inputs, advertising, production, sales, etc. That is, similar activities are grouped together. (ii) Gauging Performance: Under divisional structure each head is responsible for the profit and loss of his own division. That is, under such a structure a manager has charge of only a few subordinates. (v) Growth: Managerial efficiency is developed to a large extent with the help of decentralisation. Higher work load on the top level managers. The major change that is required to correct the situation is to move away from a complete formal organisation structure and allow for some informal structure. (iii) Assigning Duties: The third step under organising deals with assigning the roles and responsibilities to the personnel.