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Today we are going to discuss the new chapter of business studies CBSE class 12 that is Organising. With videos, Notes, Case Studies and more

Also, we are going to give you study notes, video lectures, and also PDF of handly lecture notes. Firstly, I want to share with you what are all the topics which we are going to cover in this article. Also, you can watch all the chapters videos on my YouTube channel by clicking here.

organising class 12

In this chapter we will cover following topics:

  1. What is Organising?
  2. Steps of organizing:
  3. Importance/significance of organising
  4. Organisational structure
  5. Span of management
  6. Functional Structure
  7. Divisional Structure
  8. Suitability of functional and divisional structure
  9. Formal organisation
  10. Informal organisations
  11. Delegation of authority
  12. Importance of delegate authority
  13. Elements of delegation
  14. Centralisation and decentralisation

What is organising?

“Organising is the process of identifying and grouping the work to be performed, defining and debating responsibilities and authority, and establishing a relationship for the purpose of enabling people to work most effectively together in accomplishing objectives.”


“Arranging everything in an orderly form and making the most efficient use of resources is known as organising.”

Steps of organising:

1. Identification and division of work: Work to be done is identified and divided into small tasks.

2. Departmentalisation: Related activities/similar tasks are grouped under the banner of the department.

It can be done in two ways:

(a) Functional Departmentalisation

(b) Divisional Departmentalisation

3. Assigning of duties: “Individual is assigned duties matching his skills and qualifications.”

4. Establishing reporting relationship: “It means who will report to whom is clarified to avoid conflicts and confusion.

“Therefore,Formation of managerial hierarchy take place.”

Importance/significance of organising

1_Benefits of specialisation: When an individual does any assigned task over a period of time then he achieves specialisation in that work.

2_Role clarity: It means role and task are clearly described. Therefore it is clarified “what to do, how to do, and where to do.”

3_Clarity in working relationship: It means who will report to whom.

4_Optimum utilization of resources: It means using resources effectively and efficiently to avoid duplication and wastage of work.

5_Effective administration: It leads to unification of work/harmony in work.

6_Adaption to change: It means changes can be adapted in that area where it is effected.

7_Expansion and growth: It means specialisation and optimum use of resources will lead to expansion and growth of the business.

8-Development of personnel: It means the boss shares his work with the workers so that he can focus on the main task.

Organisational structure

“Organisational structure means a framework within which managerial and operational tasks are performed.”

It can be done in two ways :

(A) Functional structure

(B)Divisional structure

Span of management

It means how much employees or subordinates can be effectively managed by one manager.

  • There is negative relation between organisational structure and span of management.

Functional Structure

Those firms who follow functional structure produces a single product where the company will make different departments like finance, sales etc.

Divisional Structure

The firms that follow the divisional structure deal in multiple products and make different departments of each product.

Suitability of functional and divisional structure

1_Functional Structure:

(a) It is suitable in large organisation.

(b) In this structure only one line of products are produced.

(c) Diversified activities and operation requires a higher degree of specialisation.

2_Divisional Structure:

(a) Organisations produce multi products or different line of products.

(b) Growing companies which plans to add more line of products in future.

(c) Organisations which requires each division to be self-contained as under divisional structure each department has (production, sales, finances department, etc. )

Formal organisation

Formal (parent) organisation: It is formed by top management to achieve organisational goals and is bound by rules and regulations. It is available in both profit-making as well as in non-profit making organisation.

Advantages of formal organisation:

1_Its a systematic working which means it follows chain of command and scalar chain.

2_It forms for the achievement of the organisational goals i.e, it motive to achieve goals.

3_It more emphases on work.

Disadvantages of formal organisation

1_It delays in action.

2_It ignore social needs which leads to demotivation of employees.

3_It only emphasis on work and ignores interpersonal relations.

Informal organisations

Informal organisation: It is a network of social relations formed spontaneously due to interactions among individuals. It is available inside a formal organisation.

Advantages of informal organisations

1_Fast/free/independent flow of communication. Therefore it doesn’t follow scaler chain.

2_It fulfills interpersonal relationships. Therefore it provides interpersonal relations and doesn’t emphasize only work.

3_It provides correct feedback. Therefore top-level management can get correct feedback on various policies.

Disadvantages of informal organisations

1_There’s no systematic working because we don’t follow scaler chain and chain of command.

2_There’s more rumours are spread. Therefore employees may mislead.

3_It more emphasis on interpersonal relations. Therefore employees work less.

Delegation of authority

When superior shares their powers with subordinates, it is called delegation of authority.

In delegation we multiply by two because there is superior and subordinates.

Importance of delegate authority

1_It leads to effective management because superior give their work to the subordinates so that they can focus on the main task.

2_It leads to employee development. Therefore it brings out the hidden potential of employees and develops their skills.

3_It motivates employees. Hence brings feelings of belongingness among employees.

4_It leads to facilitation of growth.

5_It will lead to management hierarchy. Hence it creates a who will report to whom relation among employees.

6_It leads to better co-ordination. Hence reduces confusion, conflicts and wastages of time.

Elements of delegation

There are 3 elements of delegation. They are as follows:

1_ Authority: It means power to take decision.

2_Responsibility: It means duty to perform task.

3_Accountability: It means answerable for the assigned task.

Centralisation and decentralisation

When top-level management shares their powers with a lower level of management then it is called decentralisation. It is suitable for a large organisation that expands and grows. Freedom of action is more in decentralisation.

In centralisation, all powers lie in the hand of top-level management. Hence top-level management does not share their powers with the lower level management. It is suitable for small scale organisation. Freedom of action is less in centralisation.

Importance of decentralisation

1_ It leads to developing initiative among subordinates. Hence it increases confidence among subordinates.

2_It develop managerial talents for future by doing task of top level management

3_It leads to quick decision-making. Hence, decisions are taken by lower and middle-level management as powers are distributed among them. So they do not have to wait for top authority and decision taken quickly.

4_Relief to top-level management because of sharing their works with middle and lower-level management.

5_It facilitates growth because the middle and lower level gets power and they can utilise them and helps in organisational growth.

6_It leads to better control because everyone is accountable for their decisions and hence, cannot blame others. They can evaluate their performance and check through CCTV, scorecards, etc.

So, Guys, we have finally over with this chapter organising class 12.

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Business Vidya

Hello, my name is KUNAL LONHARE. I am an entrepreneur based in india. This is a blog and I am the founder of it, where I post how can a person acquire Good marks In academics without wasting any money for tuition fees.

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