Give the meaning of ‘Authority’ as an element of delegation.


Authority refers to the right of an individual to command his subordinates and to take action within the scope of his position. Authority also refers the right to take decision-related to management and tell people what to do and what not to.

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State any three advantages of formal organization.   


Formal organisation refers to the organisation structure which is designed by the management to accomplish a particular task. It specifies clearly the boundaries of authority and responsibility and there is a systematic coordination among the various activities to achieve organisational goals.

Advantages of a Formal organisation are the following:
1) It is easier to fix responsibility since mutual relationships are clearly defined.
2) There is no ambiguity in the role that each member has to play as duties are specified. This also helps in avoiding duplication of effort.
3) Unity of command is maintained through an established chain of command.

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’Organising involves a series of steps in order to achieve the desired goals.” Explain these steps.


The organising process involves the following steps:
1) Defining the objectives: It is the first step in developing organisation structure.
2) Determining activities: In order to achieve the objectives, various activities are to be identified and enumerated.
3) Grouping of activities: The entire activities are to be grouped on the basis of functions, products, customers etc.
4) Assigning duties: The individual groups of activities are then allotted to different individuals on the basis of their ability and aptitude.
5) Delegation of authority: After allotting jobs, he is given the necessary authority to perform the task efficiently.
6) Co-ordinating activities: The activities and efforts of different persons are to be co-ordinated properly for effective performance.
7) Provision of physical facilities and good environment: Physical facilities light, recreation, rest room etc. should be provided in addition to good working environment.
8) Establishment of structural relationship: A clear-cut structural relationship should be established among individuals and groups for the success of enterprise.

 

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State any one advantage of ‘Formal Organisation’.


In a formal organisation, there is no ambiguity in the role that each member has to play as duties are specified. This also helps in avoiding duplication of effort.

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A company has been registered under the Companies Act with an authorized share capital of `20,000 crores. Its registered office is situated in Delhi and manufacturing unit in a backward district of Rajasthan. Its marketing department is situated in Bhopal.
The company is manufacturing Fast Moving Consumer Goods (FMCG).
(i) Suggest with the help of a diagram a suitable organization structure for the company.
(ii) State any three advantages of this organization structure.


The most suitable organisation structure for Fast Moving Consumer Goods is Divisional Structure.




(ii) Advantages of a divisional structure are:
(a) It promotes flexibility and initiative 
(b) It facilitates expansion and growth 
(c) Divisional heads are accountable for profits.

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