SIDHAR GNANA PEEDAM SENIOR SECONDARY SCHOOL

Date : 10-08-2023 STD 12 Commerce Business Studies

Time : 40 Minute Organization MCQ Total Marks : 50

* Choose The Right Answer From The Given Options.[1 Marks Each] [50]
1. ________ organisation emerges from _______ organisation.
a. Divisional, functional.
b. Formal, informal.
c. Informal, formal.
d. Functional, divisional.

Ans. :
c. Informal, formal.
2. A network of social relationship that arise spontaneously due to interaction at work is called:
a. Formal organisation
b. Informal organisation
c. Decentralisation
d. Delegation.

Ans. :
b. Informal Organisation.
A network of social relationship that arise spontaneously due to interaction at work is
called informal organisation. It emerges from social interaction and free flow of
communication among the employees of an organisation. On the other hand, formal
organisation refers to a formal system based on superior-subordinate relationship.
Whereas, delegation and decentralisation are concerned with the transfer of authority
and responsibility to the subordinates.

3. Formal organisation leads to:

a. Freedom and independence.
b. Procedural delays and delayed decision-making.
c. More emphasis on the interpersonal relationships.
d. Faster spreading of information.

Ans. :
b. Procedural delays and delayed decision-making.
​E xplanation:
The formal organisation is a system of well-defined jobs, each bearing a definite
measure of authority, responsibility and accountability. Such stringent rules and policies
lead to delays in the process.

4. One of the disadvantages of informal organisation is that it generally prefers.

a. Deviance.
b. Status quo.
c. Disruptiveness.
d. Disorderliness.

Ans. :

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 b. Status quo.
Explanation:
The behaviour in informal organisation is not guided by any rules and has no set
patterns. It prefers the current state of affair and the existing work routine. This leads to
lenience in the work and results.

5. The organisation process starts with.

a. Assignment of duties.
b. Establishing reporting relationships.
c. Identification and division of work.
d. Departmentalization.

Ans. :
c. Identification and division of work.
6. I refer to a network of personal and social relationships which spontaneously originates within
the formal set up. Who am I?
a. Informal organisation.
b. Party organisation.
c. Social organisation.
d. Formal organisation.

Ans. :
a. Informal organisation.
7. Being answerable to the final outcome is a phrase which can be associated with
a. Authority.
b. Duty.
c. Responsibility.
d. Accountability.

Ans. :
d. Accountability.
8. Which of the following does not follow the scalar chain?
a. Functional structure
b. Divisional structure
c. Formal organisation
d. Informal organisation.

Ans. :
d. Informal organisation.
Scalar Chain refers to a pre-defined, formal path of authority and communication in the
order of highest to the lowest. Informal organisation do not follow a scalar chain as they
arise out of informal relationship among the workers and managers. For example, it may
arise from interaction which happens over lunch or an office party. Other structures such
as formal organisation, divisional structure and functional structure follow a proper
defined scalar chain.

9. Fixing of responsibility is easy in:

a. Functional Structure.
b. Divisional Structure.
c. Both (a) and (b).
d. Neither (a) nor (b).

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 Ans. :
b. Divisional Structure.
10. Which of the following is not an element of delegation?
a. Authority.
b. Centralisation.
c. Responsibility.
d. Accountability.

Ans. :
b. Centralisation.
11. On what, the degree of centralisation and decentralisation depend?
a. The amount of authority delegated to the middle level.
b. The amount of authority delegated to the lowest level.
c. The amount of authority delegated to the highest level.
d. The amount of authority delegated to the topmost level.

Ans. :
b. The amount of authority delegated to the lowest level.
12. Which of the following is an importance of the Delegation of Authority?
a. High morale of subordinates.
b. evelops initiative amongst subordinates.
c. Limited in scope.
d. Both (a) and (b).

Ans. :
d. Both (a) and (b).
13. Which of the following statement is not true?
a. Formal organisation originates as a result of company's rules & policies.
b. Informal organisation arises out of personal qualities of individuals.
c. Under formal organisation, flow of communication takes place in any direction.
d. Formal organisation is rigid in nature.

Ans. :
c. Under formal organisation, flow of communication takes place in any direction.
14. a. Reduces workload of managers
b. Basis of superior-subordinate relations
c. Basis of superior-subordinate relations
d. Basis of superior-subordinate relations

Ans. :
d. Basis of superior-subordinate relations
15. Mrs. Sharma has joined a new organization named Realistic Ltd. On her first day to office, she
analysed that there were no different departments assigned for various product lines. She
observed a separate team structure for each of them and also that they functioned
independently of one another. From her analysis, what can we make out of the Realistic Ltd?
a. It is a functional form of organization.
b. Divisional structure is the way of the organization.
c. The company follows the informal structure.
d. No observation can be made out of her analysis.

Ans. :

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 b. Divisional structure is the way of the organization.
16. If a firm wants to diversify its business into different products and expand to different
territories, which organisation structure would be suited for this firm?
a. Divisional Structure.
b. Functional Structure.
c. Informal Structure.
d. Network Structure.

Ans. :
a. Divisional Structure.
17. Which of the following is not a feature of informal organisation?
a. It has no written rules and procedures.
b. It clearly defines the authority and responsibility of every individual.
c. It is not deliberately created by the management.
d. It is personal means the feelings of individuals are kept in mind.

Ans. :
b. It clearly defines the authority and responsibility of every individual.
18. In the context of process of organising, ______ creates superior subordinate hierarchy and
helps in coordination among various activities of the organisation.
a. Assignment of duties.
b. Departmentalization.
c. Identification and division of work.
d. Establishing reporting relationships.

Ans. :
d. Establishing reporting relationships.
19. Functional structure of organisation is most suitable.
a. In case of diversification of activities.
b. In case of large organization.
c. When high degree of specialisation is required
d. All of the above.

Ans. :
d. All of the above.
Explanation:
Functional structure is adopted by large and diversified organisations where high degree
of specialisation is required in functional activities.

20. 'It refers to concentration of authority at higher management levels'. Name it.
a. Centralisation.
b. Decentralisation.
c. Both (a) and (b).
d. Neither (a) nor (b).

Ans. :
a. Centralisation.
21. A tall structure has a:
a. Narrow span of management
b. Wide span of management
c. No span of management

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 d. Less levels of management.

Ans. :
a. Narrow span of management.
A tall structure of organisation is the one that has multiple levels of hierarchy. A tall
structure of organisation has narrow span of management. That is, under such a
structure a manager has charge of only a few subordinates.

22. Centralisation refers to:

a. Retention of decision making authority
b. Dispersal of decision making authority
c. Creating divisions as profit centers
d. Opening new centers or branches.

Ans. :
a. Retention of decision making authority.
Centralisation refers to the retention of decision making authority. Centralisation implies
a situation where the decision making power is retained by the top level management.
Under such a system, other levels of management do not have a right to intervene in
policy making. The power and the authority, in such a system, remains concentrated in a
few hands.

23. Which of the following is not an element of delegation?

a. Accountability
b. Authority
c. Responsibility
d. Informal organisation.

Ans. :
d. Informal Organisation.
Informal Organisation is not an element of delegation. Delegation refers to the
transfer of authority to subordinates. Accountability, responsibility and authority are the
major elements of delegation. On the other hand, informal organisation refers to the
relationship which arises out of informal communication among the employees in an
organisation. Such communication is purely informal in nature and does not involve any
formal communication such as that in delegation.

24. Which of the following is not an importance of delegation of authority?

a. Effective management.
b. Relief to top-managers.
c. Facilitation of growth.
d. Basis of management hierarchy.

Ans. :
b. Relief to top-managers.
Explanation:
In case of delegation of authority, ultimate accountability still lies with the superiors,
therefore they are not completely releived of their responsibility. Thus, it is not an
advantage or importance of delegation of authority.

25. Which of the following is an obligation of a subordinate to properly perform the assigned work
duties?

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 a. Authority.
b. Responsibility.
c. Accountability.
d. None of these.

Ans. :
b. Responsibility.
26. Grouping of activities on the basis of product lines is a part of:
a. Delegated organisation
b. Divisional organisation
c. Functional organisation
d. Autonomous organisation.

Ans. :
b. Divisional organisation.
Sometimes an organisation has more than one product line. Under such a scenario the
organisation groups the activities on the basis of the product line. Such a grouping of
activities on the basis of product line is known as divisional organisation. Each division
further has its own sub-departments such as production, finance, etc.

27. Which of the following originates as a result of social interactions?

a. Formal Organisation.
b. Informal Organisation.
c. Delegation.
d. Functional Organisation.

Ans. :
b. Informal Organisation.
28. Grouping of activities on the basis of functions is a part of:
a. Decentralised organisation
b. Divisional organisation
c. Functional organisation
d. Centralised organisation.

Ans. :
c. Functional organisation.
Functional Organisation involves grouping of the functions of similar nature. Each group
forms a separate department that report to one head. For example, departments may be
divided on the basis of functions such as production, human resources, etc. that report to
the managing director of the organisation.

29. For delegation to be effective it is essential that responsibility be accompanied with

necessary:
a. Authority
b. Manpower
c. Incentives
d. Promotions.

Ans. :
a. Authority.
For delegation to be effective it is necessary that responsibility is accompanied with
authority. Responsibility refers to the obligation to complete a task which has been

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 assigned by the superior. Complementary to this, authority refers to the power to give
commands and directions to the subordinates. For successful delegation both authority
and responsibility must go together. That is, if an individual is given the responsibility to
carry out a task, he must also be given the necessary authority to carry it out.

30. Which of the following is the right to command and to take decisions?
a. Authority.
b. Responsibility.
c. Accountability.
d. None of these.

Ans. :
a. Authority.
31. An organisation structure in which various departments are created on the basis of products,
territory or region is called a.
a. Aivisional structure.
b. Functional structure.
c. Matrix structure.
d. Staff structure.

Ans. :
a. Aivisional structure.
32. In which organisation flow of communication takes place through scalar chain?
a. Formal organisation.
b. Informal organisation.
c. Both (a) and (b).
d. Neither (a) nor (b).

Ans. :
a. Formal organisation.
33. Organising can be defined as:
a. A structure.
b. A process.
c. Both (a) and (b).
d. A function of planning.

Ans. :
c. Both (a) and (b).
34. Which of the following is a limitation of formal organisation?
a. No clear cut structure.
b. Social interaction.
c. Personal satisfaction.
d. Rigidity.

Ans. :
d. Rigidity.
35. A company is very flexible in its working. It wants the proper participation of all the employees
in the organisation. Also, the company wants to expand and hence it uses the feature
development of managerial talent for future.'In which aspect is it covered?
a. Decentralisation.
b. Formal organization.

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 c. Authority.
d. Continuity.

Ans. :
a. Decentralisation.
36. Span of management refers to:
a. Number of managers
b. Length of term for which a manager is appointed
c. Number of subordinates under a superior
d. Number of members in top management.

Ans. :
c. Number of subordinates under a superior.
Span of management means the number of subordinates that can be well-handled by a
superior. Any organisational structure is based on its span of management.

37. What explains informal organisation the best?

a. All departments in an organisation reports to a coordinating head.
b. Network of personal and social relationships that arise as people associate with other
people in a work environment.
c. This structure is created intentionally by the managers for achievement of
organisational goal.
d. None of the above.

Ans. :
b. Network of personal and social relationships that arise as people associate with other
people in a work environment.
38. Divisional structure can bring ________ that can lead to incompatibilities.
a. Specialization.
b. Compartmentalizationation.
c. Departmentalization.
d. All of the above.

Ans. :
b. Compartmentalizationation.
39. The form of organisation known for giving rise to rumors is called:
a. Centralised organisation
b. Decentralised organisation
c. Informal organisation
d. Formal organisation.

Ans. :
c. Informal organisation.
Rumours are a result of informal organisation. They can have adverse effect on the
working environment. It may result in arguments or conflicts among the people of the
organisation. For example, a rumour about the boss may pop up during a communication
among a group of employees, which may affect the superior-subordinate relationship.

40. Once departments are created, each department is placed under the charge of a _____.
a. Branch Manager.
b. Departmental head.
c. HR Manager.

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 d. Marketing head.

Ans. :
b. Departmental head.
41. Which of the following is an advantage of divisional structure?
a. Duplicity of functions.
b. Quick decision-making.
c. Selfish attitude.
d. Conflicts.

Ans. :
b. Quick decision-making.
42. Minimum freedom for managers and maximum constraints are main features of.
a. Total autonomy.
b. Total decentralization.
c. Total centralization.
d. Total congruency.

Ans. :
c. Total centralization.
43. Which of the following is/ are true about functional structure?
a. It is economical as there is minimal duplication of resources.
b. It is costlier as there is duplication of resources.
c. It is easier to fix responsibility on each division.
d. (b) and (c).

Ans. :
a. It is economical as there is minimal duplication of resources.
44. _______ aims at creating an organisational structure, clarifying jobs and working relationships
and effectively deploying resources for the achievement of desired organisational goals.
a. Staffing.
b. Organising.
c. Planning.
d. Controlling.

Ans. :
b. Organising.
45. Organisation leads to optimal utilisation of resources which helps in.
a. Prevention of confusion.
b. Minimisation of wastage.
c. Increased project timeline.
d. Both (a) and (b).

Ans. :
a. Both (a) and (b).
Explanation:
Organising leads to proper assignment of jobs which ensures proper usage of materials,
financial and human resources, which reduces confusion and wastage of resources.

46. Which of the following is/ are the importance of organising?

a. Adaptation to change.

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 b. Effective administration.
c. Expansion and growth.
d. All of the above.

Ans. :
d. All of the above.
Explanation:
Organising may be defined as such process which is made by any business firm for the
purpose of achieving its own goals or objectives in smooth way. It is the process of
ensuring healthy relationship among the departments by the proper channel of
communication, so that the employees of every department can give their 100%
contribution in the accomplishment of desired goals.

47. Informal organisation provides necessary environment for individual's _______.

a. Authority.
b. Accountability and responsibility.
c. Creativity and innovation.
d. None of the above.

Ans. :
c. Creativity and innovation.
48. Which of the following is not an advantage of functional organisational structure?
a. Coordination.
b. Difficult to fix the responsibilities.
c. Specialisation.
d. Effective control.

Ans. :
b. Difficult to fix the responsibilities.
49. Which of the following implies being responsible/ answerable for the final outcome?
a. Authority.
b. Responsibility.
c. Accountability.
d. None of these.

Ans. :
c. Accountability.
50. Which of the following is a disadvantage of functional structure?
a. Difficulty in inter-departmental coordination.
b. Helps in increasing managerial efficiency.
c. Minimises cost.
d. Coordination is established.

Ans. :
a. Difficulty in inter-departmental coordination.
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