CBSE Class 12 Business Studies Organising MCQs Set H

ASSERTION REASON BASED QUESTIONS

In the questions given below there are two statements labelled as Assertion (A) and Reason (R). Choose the correct code:

Question. Assertion (A) Identification of division of work is the first step of organising process.
Reason (R) Organising process starts with dividing work among employees of the organisation to make sure that there is no duplication of work and there is no extra burden of work on one person.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (a)

Question. Assertion (A) Assignment of duties is important part of organising process.
Reason (R) Under organising all the individuals assigned some authority matching with responsibility.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (b)

Question. Assertion (A) Organising leads to specialisation.
Reason (R) In organising, clarity in working relations cannot be possible.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (c)

Question. Assertion (A) In organising there are very few chances of duplication of work or overlapping of work because the jobs are assigned to different individuals by clearly defining the job in job description document.
Reason (R) Changes can be easily adapted with organising by opening separate department.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (b)

Question. Assertion (A) organising leads to effective administration.
Reason (R) In these similar jobs are grouped under one department which leads to unification of efforts.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (a)

Question. Assertion (A) In functional structure emphasis is placed on specific functions.
Reason (R) Minimum cost leads to increase in profits.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (b)

Question. Assertion (A) Due attention to different functions is the demerit of functional structure.
Reason (R) Each department is specialised in its own function so they fail to understand the priority of other department.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (d)

Question. Assertion (A) Changes cannot take place easily in functional structure of organisation.
Reason (R) In functional structure, employees develop, narrow prospective as they get training in one area or one skill only.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (a)

Question. Assertion (A) Divisional structure leads to product specialisation.
Reason (R) When organisation is large and producing more products divisional structure should be followed.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (b)

Question. Assertions (A) There are more chances of managerial development in functional structure.
Reason (R) Managers perform multifunctions in divisional structure.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (d)

Question. Assertion (A) Organisation structure is indispensable means, and the wrong structure will seriously impair business performance and even destroy it.
Reason (R) A proper organisation structure is essential to ensure a smooth flow of communication and better control over the operations of a business enterprise. It specifies the relationship between people, work and resources.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (a)

Question. Assertion (A) The need for an adequate organisation structure is felt by an enterprise whenever it grows in size or complexity.
Reason (R) As an organisation grows, coordination becomes difficult due to emergence of new functions and increase in structural hierarchies. Thus, for an organisation to function smoothly and face environmental changes, it becomes necessary to pay attention to its structure.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (a)

Question. Assertion (A) Organisation structure is the outcome of the planning process.
Reason (R) The organising process leads to the creation of an organisation structure which include designing of roles to be filled by suitable skilled people.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (d)

Question. Assertion (A) Functional structure places less importance to organisation objective.
Reason (R) In functional structure all departments focus on their own objectives not on organisational objectives.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (b)

Question. Assertion (A) In divisional structure there is problem of coordination among different departments.
Reason (R) All departments want to achieve their goal that’s why everyone tries to get more resources.
(a) Both A and R are true. R is the correct explanation of A.
(b) Both A and R are true but R is not correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
Answer: (d)

Question. Assertion (A): Decision-making is very slow in a centralised organisation.
Reason (R): In a centralised organisation, every decision is taken by top management and information has to pass through many levels.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are True but Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (a)

Question. Assertion (A): Delegation is an optional policy decision and is done at discretion of top management.
Reason (R): No individual can perform all tasks on his own.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are True but Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (d)

Question. Assertion (A): Organising stimulates creativity among the managers.
Reason (R): Delegation allows the managers to reduce their workload and gives them time to explore new areas for growth.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are True but Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (a)

Question. Assertion (A): Delegation helps a manager to extend his area of operations as without it, his activities would be restricted to only what he himself can do.
Reason (R): A manager, no matter how capable he is, cannot manage to do every task on his own. The volume of work makes it impractical for him to handle it all by himself.
(a) Both Assertion (A) and Reason (R) are True.
(b) Both Assertion (A) and Reason (R) are False.
(c) Assertion (A) is True and Reason (R) is False.
(d) Assertion (A) is False and Reason (R) is True.
Answer: (a)

Question. Assertion (A): Delegation does not mean abdication.
Reason (R): A manager is under obligation to perform the delegated task.
(a) Both Assertion (A) and Reason (R) are True.
(b) Both Assertion (A) and Reason (R) are False.
(c) Assertion (A) is True and Reason (R) is False.
(d) Assertion (A) is False and Reason (R) is True.
Answer: (c)

Question. Assertion (A): While Authority is delegated, responsibility is imposed, accountability is assumed.
Reason (R): Authority can be delegated by a manager to a subordinate, which means granting of authority to subordinates to operate within prescribed limits. Responsibility is the obligation of a subordinate to properly perform the assigned duty. Accountability implies being answerable for the final outcome.
(a) Both Assertion (A) and Reason (R) are True.
(b) Both Assertion (A) and Reason (R) are False.
(c) Assertion (A) is True and Reason (R) is False.
(d) Assertion (A) is False and Reason (R) is True.
Answer: (d)

Question. Assertion (A): Responsibility is derived from authority and accountability is derived from responsibility.
Reason (R): Responsibility is the obligation of a subordinate to properly perform the assigned duty, for which he/she has been delegated authority by his/her superior. Once authority has been delegated and responsibility accepted, one cannot deny accountability.
(a) Both Assertion (A) and Reason (R) are True.
(b) Both Assertion (A) and Reason (R) are False.
(c) Assertion (A) is True and Reason (R) is False.
(d) Assertion (A) is False and Reason (R) is True.
Answer: (a)

Question. Assertion (A): A large sized organisation can be totally decentralised.
Reason (R): As an organisation grows in size and complexity, there is tendency to move towards decentralised decision-making. Complete centralisation would imply concentration of all decision making functions at the apex of the management hierarchy.
(a) Both Assertion (A) and Reason (R) are True.
(b) Both Assertion (A) and Reason (R) are False.
(c) Assertion (A) is True and Reason (R) is False.
(d) Assertion (A) is False and Reason (R) is True
Answer: (d)

Question. Assertion (A): Decentralisation is extending delegation to the lowest level.
Reason (R): Decentralisation refers to delegation of authority throughout all the levels of the organisation. Decision making authority is shared with lower levels and is consequently placed nearest to the points of action.
(a) Both Assertion (A) and Reason (R) are True.
(b) Both Assertion (A) and Reason (R) are False.
(c) Assertion (A) is True and Reason (R) is False.
(d) Assertion (A) is False and Reason (R) is True.
Answer: (a)

Question. Assertion (A): Delegation is considered essential for effective organising.
Reason (R): Delegation helps a manager to extend his area of operations as without it, his activities would be restricted to only what he himself can do.
(a) Both Assertion (A) and Reason (R) are True.
(b) Both Assertion (A) and Reason (R) are False.
(c) Assertion (A) is True and Reason (R) is False.
(d) Assertion (A) is False and Reason (R) is True.
Answer: (a)

Question. Assertion (A): Decentralisation is a compulsory decision of the top management.
Reason (R): Decentralisation is done at the discretion of the top management. Its purpose is to increase the role of the subordinates in the organisation by giving them more autonomy.
(a) Both Assertion (A) and Reason (R) are True.
(b) Both Assertion (A) and Reason (R) are False.
(c) Assertion (A) is True and Reason (R) is False.
(d) Assertion (A) is False and Reason (R) is True.
Answer: (d)

Question. Assertion (A): Decentralisation must always be balanced with centralisation in areas of major policy decisions.
Reason (R): Decentralisation recognises the decision maker’s need for autonomy. The management, however, needs to carefully select those decisions which will be pushed down to lower levels and those that will be retained for higher levels.
(a) Both Assertion (A) and Reason (R) are True.
(b) Both Assertion (A) and Reason (R) are False.
(c) Assertion (A) is True and Reason (R) is False.
(d) Assertion (A) is False and Reason (R) is True.
Answer: (a)

Question. Assertion (A): Decentralisation should be applied with caution by the top management.
Reason (R): It can lead to organisational disintegration if the departments start to operate on their own guidelines which may be contrary to the interest of the organisation.
(a) Both Assertion (A) and Reason (R) are True.
(b) Both Assertion (A) and Reason (R) are False.
(c) Assertion (A) is True and Reason (R) is False.
(d) Assertion (A) is False and Reason (R) is True.
Answer: (a)

Question. Assertion (A): Delegation of authority is essential for effective operation of any business organisation.
Reason (R): Accountability cannot be delegated or transferred.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are True but Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True
Answer: (b)

Question. Assertion (A): The scope of authority is limited to the extent of the work assigned.
Reason (R): Responsibility is an obligation of an employee to complete the work assigned.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

CASE BASED QUESTIONS

Read the following text and answer Question No. 1 to 4 on the basis of the same: ‘Himalaya Ltd. Is engaged in manufacturing of washing machines. The target of the organisation is to manufacture 500 washing machines in a day. There is an occupational specialisation in the organisation which promotes efficiency to employees. There is no duplication of efforts in such type of organisation structure.

Question. Identify the organisation structure in the above paragraph?
(a) Divisional
(b) Functional
(c) Matrix
(d) None of the above
Answer: (b)

Question. Which feature of above identified structure is highlighted in the above para?
(a) Increase cost
(b) Occupational specialisation
(c) Duplication of efforts
(d) None of the above.
Answer: (b)

Question. How the above structure leads to efficiency?
(a) No duplication of efforts
(b) Increase cost
(c) Departmentalisation
(d) None of the above.
Answer: (a)

Question. Which of the following is not a feature of the structure identified above?
(a) Occupational specialisation
(b) No duplication of efforts
(c) Improves efficiency
(d) None of the above.
Answer: (d)

Read the following text and answer Question No. 5 to 8 on the basis of the same: Harish recently took over as Chief Executive Officer (CEO) of ‘Dream Big’ a company diversified into two segments namely telecom and education. He has convinced the Board of Directors of company to close down telecom division as it is running into huge losses due to entry of a new competitor.

Question. What type of organisation structure allows for easy closure of undesirable product lines without interrupting the existing operations of a business enterprise?
(a) Functional structure
(b) Divisional structure
(c) Matrix structure
(d) None of the above.
Answer: (b)

Question. Which of the following is not a feature of functional structure?
(a) It promotes functional specialisation
(b) Managerial development is difficult
(c) It is easy to fix responsibility for performance on one department
(d) It is an economical structure to maintain.
Answer: (c)

Question. Which of the following is not a merit of divisional structure?
(a) It promotes product specialisation
(b) It leads to minimal duplication of efforts which result in economies of scale
(c) It promotes flexibility and faster decision making
(d) It facilitates expansion and growth as new divisions
Answer: (b)

Question. What type of organizational structure is advisable for “Dream Big’ after it closed down telecom division?
(a) Functional structure
(b) Divisional structure
(c) Matrix structure
(d) None of the above.
Answer: (a)

Read the following text and answer Question No. 9 to 12 on the basis of the same: Jolly Good Ltd. Is a well-known entertainment company in Bangalore. The main divisions of company include television, print and films. Each unit has a divisional manager responsible for performance and who has authority over the unit. All its divisions are multifunctional as within each division functions like production, human resource, marketing, finance, purchase etc, are performed simultaneously for the accomplishment of desired goals. Keeping in view, the nature of work the company has shaped a narrow span of control across all levels.

Question. Identify the type of organisational structure being followed by the company?
(a) Functional structure
(b) Divisional structure
(c) Network structure
(d) Matrix structure
Answer: (a)

Question. Which of the following may not be a reason for the company to adopt this type of structure as identified in question 9?
(a) Promotes product specialisation
(b) Helps in fixation of responsibility in cases of poor performance
(c) Leads to economies of scale and this lowest cost
(d) Promotes flexibility and initiative
Answer: (c)

Question. Which of the following statement is true about span of management?
(a) It gives shape to the organisational structure
(b) It determines the levels of the management in the structure
(c) Both (a) and (b)
(d) None of the above
Answer: (c)

Question. Keeping in the view the policy of the Jolly Good Ltd. It is likely to have…………number of levels in management.
(a) More
(b) Less
(c) Difficult to define
(d) None of the above.
Answer: (a)

Read the following text and answer question no. 13-15 on the basis of the same: Infocom has diversified itself into several product lines: Telecommunications, Engineering, Financial Services. Each subsidiary is self-sufficient with their own administrative functions, propagating the belief that people can assume the responsibility for the effective implementation of their decisions and should be given autonomy. This has reduced the need for direct supervision by superiors, has promoted flexibility, initiative and faster decision making. The orders of customers are never delayed, as a result of good policy decisions of top management. The philosophy of the top management awards greater autonomy to the lower levels of management.

Question. Identify the philosophy of the top management highlighted in the above case
(a) Centralisation
(b) Decentralisation
(c) Delegation
(d) None of these
Answer: (b)

Question. “This has reduced the need for direct supervision by superiors, has promoted flexibility, initiative and faster decision making.” Identify the point of importance of the philosophy of the top management, as highlighted above:
(a) Develops initiative among subordinates
(b) Develops managerial talent for the future
(c) Relief to top management
(d) Better control
Answer: (c)

Question. “The philosophy of the top management awards greater autonomy to the lower levels of management.” Identify the point of importance of the philosophy of top management, as highlighted above.
(a) Quick decision making
(b) Better control
(c) Relief to top management
(d) Facilities growth
Answer: (d)

Read the following text and answer question no. 16-18 on the basis of the same: Aman Chadha started ‘Bulls Eyes’ a company for providing cyber security solutions to businesses. Its objective is to prevent, detect and respond to cyber-attacks and protect critical data. He was a hardworking software engineer and an expert in cyber security. His reputation grew by leaps and bounds as he was not only a person of integrity but also did his work with utmost honesty and sincerity. The business started growing day by day. He was delighted when he was offered a big project by the Ministry of Defence. While working on the project, he found that the volume of work made it impractical for him to handle all the work by himself. He decided to expand the team. The company maintained a close liaison with a local engineering college. During a campus placement, Ishan and Vrinda were appointed to work for the new project. He found the new employees capable, enthusiastic and trustworthy. Aman Chadha was thus able to focus on objectives and with the help of Ishan and Vrinda, the project was completed on time. Not only was this Aman Chadha also able to extend his area of operations. On the other hand, Ishan and Vrinda also got opportunities to develop and exercise initiative.

Question. Identify the concept used by Aman Chadha in the above case which helped him in focusing on objectives.
(a) Delegation
(b) Decentralisation
(c) Centralisation
(d) Authority
Answer: (a)

Question. Which of the following statement is Not true for the concept of management identified?
(a) It means granting of authority to subordinates to operate within prescribed limits.
(b) It facilitates growth and expansion of the organisation.
(c) It is a process followed to share tasks.
(d) It has a wide scope.
Answer: (d)

Question. What is the main purpose of the concept of management identified?
(a) To lessen the burden of the manager.
(b) To provide relief to the top management.
(c) To increase the role of the subordinates by giving them more autonomy.
(d) Both (b) and (c)
Answer: (a)

Read the following text and answer question no. 19-21 on the basis of the same: A company X limited manufacturing cosmetics, which has enjoyed a pre-eminent position in business, has grown in size. Its business was very good till 1991. But after that, new liberalised environment has seen the entry of many MNC’s in the sector. With the result the market share of X limited has declined. The company had followed a very centralised business model with Directors and divisional heads making even minor decisions. Before 1991 this business model had served the company very well as consumers had no choice. But now the company is under pressure to reform.

Question. What organisation structure changes should the company bring about in order to retain its market value?
(a) It should adopt functional structure.
(b) It should adopt divisional structure.
(c) It should adopt centralisation.
(d) It should adopt decentralisation.
Answer: (d)

Question. How will the changes suggested by you help the firm?
(a) It will help in increasing managerial and operational efficiency, resulting in increased profit.
(b) It will facilitate expansion and growth as new divisions can be added without interrupting the existing operations by merely adding another divisional head and staff for the new product line.
(c) It will help in quick decision-making since decisions will be taken at levels which are nearest to the points of action.
(d) It will facilitate effective management.
Answer: (c)

Question. ___________ explains the manner in which decision-making responsibilities are decided among hierarchical levels.
(a) Delegation
(b) Decentralisation
(c) Authority
(d) Accountability
Answer: (b)

Question. Shreya Ltd. has been awarded recently with the ‘Best Employer of the Year Award’. The company has believed in the ideas and suggestions of its employees. There is selective dispersal of decision making authority at all levels. There is no delay in delivery of orders to customers due to prompt decisions taken by employees. Identify the concept of management followed by the company.
(a) Authority
(b) Responsibility
(c) Delegation
(d) Decentralisation
Answer: (d)