Karnataka 2nd PUC Business Studies Notes Chapter 5 Organising

→ Meaning: Organizing is the process of identifying, grouping the work to be performed, delegating authority & responsibility, establishing a relationship & purpose for the people to work most efficiently together to achieve the objectives.

→ Definition: To organize a business is to provide it with everything useful to its functioning – raw materials, machines, tools, capital and personnel.

→ Importance: Effective administration, Optimum Utilization of resources; Clarity in work relationship, Benefit of Specialization, Expansion & Growth, Development of personals, Adoption to the change.

→ Organising Process: It involves 4 stages

  1. Identification & Division of work
  2. Departmentalization
  3. Assignment of duties
  4. Establishment of reporting relationship.

2nd PUC Business Studies Notes Chapter 5 Organising

→ Organization Structure: It is system which defines the frame work with in which the managerial and operating functions are performed in an enterprise.

→ Types of organizational structure: Functional structure & Divisional Structure. Functional structure: Grouping the jobs based on similar nature and organizing them different departments is known as functional structure.

→ Divisional Structure: Grouping the activities on the basis of product is known as divisional Structure.

→ Formal Organization: Formal organization is one which has a system of well defined Positions, Authority, responsibility, Policies, Principles etc.

→ Informal Organization: Informal organization refers to the relationship between the people in the organization based on the personal attitude, prejudices, likes & dislikes etc.

→ Delegation: Delegation is the process of transferring authority from a superior to his subordinate.

→ Elements of delegation: Authority, Responsibility, & Accountability.

→ Authority: It is the power to command employees and instruct them to perform a job.

→ Responsibility: It is the obligation of a subordinate to perform the assigned duty.

→ Accountability: It means being answerable for the final results.

2nd PUC Business Studies Notes Chapter 5 Organising

→ Importance of delegation: Delegation of authority is necessary for the smooth functioning of a business. Effective management can lead to

  • effective management
  • Employee development
  • Better coordination
  • Quick decision making
  • Basis for management Hierarchy
  • Facilitate Growth.

→ Centralization of Authority: It refers to the concentration of authority of decision making by top level managers is called centralization.

→ Decentralization of authority: It refers to the transfer of authority to take decisions to the lower levels of organization.

2nd PUC Business Studies Notes Chapter 5 Organising

→ Importance of Decentralization:

  • Reduces work load,
  • Quick Decision Making
  • Relief to top facilitates growth
  • Facilitates growth.
  • Development of executives.

2nd PUC Business Studies Notes

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