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Organising Class 12 Notes CBSE Business Studies Chapter 5 (Free PDF Download)

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Last updated date: 16th May 2024
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Revision Notes for CBSE Class 12 Business Studies Chapter 5 - Free PDF Download

The syllabus of Business Studies for Class 12 is designed to prepare students with the groundwork for the undergraduate commerce specialized courses that they may pursue after class 12. It helps them in understanding the basic concepts that are required for comprehending advanced topics of the subject. Chapter 5 of Class 12 Business Studies is ‘Organisation’ and it is an important chapter of the syllabus. 


The chapter goes into detail regarding the definition of organisation, its significance, advantages, and methods for attaining organisational structure. Students can refer to the Business Studies Class 12 Chapter 5 revision notes compiled by Vedantu's subject-matter specialists in a comprehensive way. These revision notes will help them in understanding the various key points of organising and they will be able to answer the questions from the chapter with ease in their exams. Students can access the Organising Class 12 Business Studies revision notes online at any time as well as download them for their offline reference, for free from Vedantu.

Download CBSE Class 12 Business Studies Revision Notes 2024-25 PDF

Also, check CBSE Class 12 Business studies revision notes for other chapters:


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Access Class 12 Business Studies Chapter 5 - Organising Notes

Organising

  • Organising refers to the process of the identification, classification and coordination of work to be performed by establishing reporting relationships between the people, setting up their responsibilities and authorities so as to collectively integrate the human efforts for the successful achievement of organisational objectives.

  • Hence, Organising is responsible for:

    • Implementation of plans into action.

    • It decides by whom, how and where a particular task will be performed.

Steps in The Process of Organising

Steps in the process of organising

  1. Identification and division of work: Identifying and dividing work to be done into smaller and manageable tasks.

  2. Departmentalization: Grouping of activities similar in nature as department.

  3. Assignment of duties: Allocating work according to the skills and abilities of employees.

  4. Establishing reporting relationship: Defines the authority, responsibility, relationship clearly stating for each employee from whom they have to take orders and to whom they are accountable.

Importance of Organising

Importance of organising

  • Benefits of specialization: Work is divided into smaller tasks and each task is performed by those employees who possess the required skills. Performing similar tasks leads to specialization.

  • Clarity in working relationships: It removes ambiguity and miscommunication as working relationships are clearly stated.

  • Optimum utilization of resources: It avoids duplication and overlapping of work which leads to minimum wastage of resources.

  • Adaptation to change: It tries to incorporate the changes in the business environment by modifying organizational structures and revising interrelationship at managerial levels as and when required.

  • Effective administration: Clarity in working relationships and proper execution of work brings effective administration.

  • Development of personnel: Proper delegation reduces employer’s burden, stimulates creativity and motivates them to complete tasks efficiently.

  • Expansion and growth: It helps in growth and expansion by incorporating changes in the business environment.

Organisational Structure

  • Organisational structure refers to the structure or a framework within which various operational and managerial tasks are performed. 

  • It aids in the proper coordination of human, physical and financial resources in the organization to successfully achieve the organisational objectives.

  • It is an indispensable means without which an organisation cannot work.

  • The organisational chart shows the organisational structure of an enterprise.

  • Span of management is the number of subordinates that a superior can manage.

  • Organizational structure ensures a smooth and efficient flow of operations within an enterprise.

Types of Organisational Structure

These are divided into two types:

1. Functional structure: 

  • Organisational structure where business is managed in the form of a separate department created on the basis of function each department performs.
    Suitability

  • Functional structure is suitable for large scale businesses providing specialised services or performing diversified activities.

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Advantages

  • Specialisation: Employees perform similar tasks within a department and are able to improve performance which leads to occupational specialisation.

  • Coordination: Similarity in the task being performed remote control and coordination.

  • Operational efficiency: The managerial and operational efficiency reduces cost and results in higher profits. Division of work into smaller tasks leads to minimal duplication and lowers cost.

  • Makes training easier: The range of skills are focused which makes training of employees easier.

  • Higher Focus: Individuals performing similar and smaller tasks can focus better on the activities they are responsible for.

Disadvantages

  • Deviation in interests: Department interest may be pursued at the cost of organisational interest to create a functional empire.

  • Conflicts: Departmental interests may lead to conflicts of interest among departments and hinder interaction between them.

  • Lack of Coordination: Conflicts of interest among departments may lead to problems in coordination.

  • Rigidity: Employees performing similar tasks may not be open to ideas or newer methods resulting in lack of flexibility.

2. Divisional Structure: 

  • Divisional structure is a type of organisational structure which works as separate units or divisions. 

  • There are many units and divisions that deal with various products. 

  • Each division is accountable for its own job and must consider its own profit and loss. 

  • Each division has its own divisional manager who oversees and has power over the entire unit.
    Suitability

  • Divisional structure is suitable for organisations producing a variety of products for performing diversified activities.

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Advantages: 

  • Product Specialisation: Product specialisation contributes to the development of diverse abilities in a divisional head, preparing him for higher roles. This is due to the fact that he obtains experience in all functions relating to a specific product.

  • Accountability: Divisional heads are held accountable for profits since revenues and costs associated with various departments are clearly identifiable and attributed to them. This gives a solid foundation for measuring performance. It also aids in the assignment of blame in times of poor division performance, allowing appropriate corrective action to be performed.

  • Flexibility: It encourages flexibility and initiative because each division operates as an autonomous unit, resulting in faster decision making.

  • Expansion: It allows for expansion and growth by allowing for the addition of new divisions without disrupting present operations by simply adding another divisional head and personnel for the new product line.

  • Prepare for future positions: Experience in a variety of operations prepares managers for higher positions.

  • Better Initiatives: Dependent and independent functioning of divisions encourages managers to take initiatives to find better means and ways to perform the best.

Disadvantages

  • Conflicts: Conflicts may emerge between different divisions on the allocation of cash, and a specific division may aim to maximize its profits at the expense of other divisions.

  • Duplication of efforts: It may result in cost increases due to duplication of efforts across products. Providing each division with its own set of equivalent functions raises costs.

  • Misuse of power: It gives managers the authority to oversee all activities relating to a specific division. Over time, such a manager may develop influence and, in an attempt to establish his independence, may disregard organizational interests.

Difference between Functional Structure and Divisional Structure:


Basis of Difference

Functional Structure

Divisional Structure

Creation

These are created based on functions.

These are built on the basis of product lines as well as functions.

Cost

It is cost-effective because duplication of effort is avoided.

It is expensive because there is a higher rate of duplication of work and resources between departments.

Duplication of work

Work overlapping is reduced as a result of functional specialization.

Because each product department performs the same functions, work overlapping is increased.

Suitability

More appropriate for businesses that focus on 'operational specialisation.'

More appropriate for multiproduct companies with a focus on 'differentiated products.'

Functional Hierarchy

The departments are divided into horizontal functional hierarchies based on key operations.

When departments are created on the basis of product-line categories, a vertical functional hierarchy is formed.

Decision making

Decisions for various departments are made by the coordinating head, which centralises decision making.

Decisions are decentralized because each division of the product line has its own decision-making authority.

Management

Management is difficult because each task must report to a coordinating head at the highest level of management.

Management is simplified because each product has its own department.


Formal and Informal Organizations

a. Formal organisations: 

  • Formal organisation lays down job descriptions, rules and procedures for each task to be performed in an organisation.

  • It coordinates, interlinks and integrates the efforts of various departments and different activities to achieve organisational goals.

  • It clearly specifies the formal relationships between the employees, who has to report whom, the nature and extent of their relationship etc,

  • It prioritizes work over interpersonal and informal relationships.

Advantages

  • Easy to fix responsibility.

  • No ambiguity in instructions.

  • Maintains unity of command.

  • Focus on organisational goals.

  • Provide stability.

Disadvantages

  • Procedural delays due to long formal chains of communication.

  • No recognition for creativity, as everyone has to follow a certain specified structure.

  • No understanding of human relationships.

b. Informal organisation

  • Informal organisation is a structure formed as a result of a network of social relationships among employees.

  • It allows employees to interact beyond officially defined roles.

  • It originates within the formal organisation as frequent interaction among employees in formal organisation creates informal organisation.

Advantages

  • Quick communication and faster feedback due to informal communications.

  • Fulfills social needs of friendship and affinity.

  • Makes up for inadequacies of formal organization.

Disadvantages

  • Disrupts the formal setups.

  • Resistance to change.

  • Group interest may supersede organisational interest.

  • Difference in opinion of people in an informal group may lead to conflicts and clashes.

Difference between Formal and Informal Organisation

Basis

Formal Organisation

Informal Organisation

Meaning

Formal organisation lays down job descriptions, rules and procedures for each task to be performed in an organisation.

Informal organisation is a structure formed as a result of a network of social relationships among employees.

Relationships

Formal

Informal

Flexibility

No, Rigid.

Flexible in nature

Authority

Originates through formal structure

Originates through interpersonal relationships

Communication

In the form of Scalar chain, that is a formal route followed.

No formal route followed. It can flow in any direction.


Delegation

  • Delegation refers to the downward transfer of authority from a superior to a subordinate to enable subordinates to perform their responsibilities effectively and efficiently.

Elements of Delegation

Delegation means assigning responsibility and authority to subordinates and creation of accountability for work.

  • Authority:
    It refers to the right of an individual to command his or her subordinate and take action within the scope of his or her position. Authority flows in a downward direction, that is top to bottom, as the superior has authority over his subordinate. Also the level of authority increases as one moves higher in the management hierarchy.

  • Responsibility:
    Responsibility is the obligation of a subordinate to properly perform the duties assigned by the superior. It always flows in upward direction, as the subordinate is responsible for his superior.

  • Accountability:
    Accountability means being answerable for the outcome of the assigned work. It flows from bottom to top, that is in upward direction, as a subordinate is accountable for his work and performance to his superior.

Difference between Authority, Responsibility and Accountability

BASIS

AUTHORITY

RESPONSIBILITY

ACCOUNTABILITY

Concept

It is the right to command.

It is an obligation to perform assigned work. 

It is the answerability for the performance.

Delegation

It can be delegated.

It cannot be delegated.

It arises from responsibility.

Origin

It originates from formal positions.

It arises from authority delegated.

It arises from the responsibility.

Flow

Downward flow, from superior to subordinate. 

Upward flow, from subordinate to superior.

Upward flow, from subordinate to superior.


Importance of Delegation

  • Effective management: Sharing responsibilities with subordinates allows managers to concentrate on important matters.

  • Employee development: Provides opportunities for employees to develop their skills to handle complex tasks and to improve their career prospects.

  • Motivation of employees: Receiving responsibilities and authority from superior builds confidence and motivates subordinates to perform well.

  • Facilitation of growth: Receiving responsibilities from superior trains and prepares the subordinates for new projects or ventures.

  • Basis of management hierarchy: The degree and flow of authority and responsibility provides the basis for management hierarchy.

  • Better Coordination: Predetermined authority, responsibility and accountability of each position bring clarity and avoids duplication which leads to coordination.

Centralisation

  • All powers and authority of decision-making is retained with the top level management in this concept. 

  • All the decisions are taken by the higher level management in a centralised firm.

  • Though an organisation cannot be completely centralised, as it may disrupt the production efficiency as well as discourage departments and employees to perform to the best of their abilities. Hence for this a balance between centralisation and decentralization is needed.

Decentralisation

  • The power and decision-making authority are delegated or shared among all the levels of management and all departments.

Importance

  • Initiative: Develops initiative among subordinates as they feel motivated to take decisions on their own. It gives lower management levels a sense of autonomy by allowing them to make their own decisions. Furthermore, it fosters a sense of self-confidence and self-reliance in them. When power is given to lower-level managers, they learn to face new difficulties and solve problems on their own. 

  • Managerial Competence: Decentralisation allows them to demonstrate their abilities and prepare for higher-level positions, and develops managerial talent for the future, as the subordinates focus on developing their skills, and take decisions based on their knowledge. This helps in shaping their professional careers.

  • Quick decision making: It facilitates quick decision making as no formal structure, or long formal chains of approval needs to be followers while taking decisions.

  • Control: Decentralisation aids in better evaluating the organization's effectiveness. Decentralisation aids in the analysis and evaluation of each department's performance separately. As a result, the level of achievement of each department, as well as their contribution to the general objectives of the organization, can be clearly analyzed.

  • Growth: Decentralisation helps to increase managerial efficiency to a considerable extent. Lower-level managers gain more authority as a result of decentralisation. It encourages healthy competition among managers from various departments. In a contest to exceed one another, they give it their all, increasing overall productivity and efficiency. The organization benefits from improved overall performance and so grows.

  • Reduced Workload of Top Managers: Delegation of authority gives top-level managers more latitude. It assists them in delegating work to subordinates and allows them to focus on more critical and higher priority tasks, such as policy decisions. Furthermore, direct monitoring by top-level management is reduced as subordinates are given the authority to make their own judgments.

Difference between Delegation and Decentralisation

Basis

Delegation

Decentralisation

Nature

Delegation is a must as it is impossible for an individual to perform all the work.

It is the top management’s option or discretion to share the powers of decision making with lower level management.

Freedom of action

Lesser freedom with the subordinate to take own decisions.

Greater freedom to make decisions.

Status

Aims to share burden of superiors

Aims to involve lower level management in decision making.

Scope

Narrow scope, limited to superior and to his/her immediate subordinate.

Wide scope, extension of decision making authority from top to lower level management.

Purpose

To allow superior to focus on high priority.

To increase the role of subordinates in decision making.


Difference between Centralisation and Decentralisation

Basis of Difference

Centralisation

Decentralisation

Authority

At the highest levels of management, authority is still concentrated in a few hands.

Lower levels of management are given authority.

Creativity

Middle and lower-level managers' creativity is hampered.

Encourages creativity and innovation at all levels

Work load

Increased workload for top-level executives.

Workload is reduced as authority and responsibility are shared.

Scope of delegation

Delegation has a limited scope because power is concentrated in a few hands.

Delegation has a broader scope now that authority can be transferred.

Subordinate initiative

Limits the scope of subordinate initiatives because workers must follow a predetermined path.

Encourages subordinates to come forward and take initiative by providing them with the necessary working freedom.

Decision making

Decision making is slowed because power is concentrated only in the hands of the top management. Before any action can be taken, the problem must pass through several levels.

Because the authority is close to the action, decisions are made quickly.


Overview- Revision Notes Class 12 Business Studies Chapter 5

Class 12 Notes ‘Organising’

This chapter discusses the fundamentals of organisation, beginning with its definition. These Class 12 revision notes Chapter 5 have discussed the topic in a straightforward and methodical manner, allowing students to master every aspect of the subject. The specialists have divided the issue into sections, and each component is presented with pertinent labelled diagrams, flowcharts, and tables. Let's look through these editing notes in detail now.


Class 12 Business Studies Chapter 5 revision notes will explain in detail the term organising and the steps involved in organising. The steps have been explained by breaking them down into points that are easy to understand and memorise. Examples provided with the topics and sub-topics make it easier for the students to develop a conceptual understanding of the concepts effectively.


The method that leads to the establishment of an organisational structure with clearly defined duties for each member is known as organising. These responsibilities are then assigned or filled by persons who are well suited for them. An organisational structure also aids in establishing the link between these positions so that each employee is clear about his or her responsibilities. To learn more about this structure and its construction, consult the Class 12 Business Studies Organising revision notes.


Organisation is very important as it not only helps in defining the roles of individuals but it leads to an effective administration and utilisation of various resources also. These revision notes will explain clearly the other areas in which organisation plays a critical role. 


NCERT Solutions Chapter 5 Class 12 Business Studies revision notes will aid the students in understanding how an organisational structure provides the framework for managerial and operational responsibilities. Students can refer to the revision notes for understanding further in detail the different types of organisational structures and how they are formed.


Every kind of organisational structure has its distinct features, advantages, and disadvantages. Students will be able to get a comparative overview of functional and divisional structure along with the difference between formal and informal structure of organisations. 


Students will also comprehend the idea of delegation, which is the transfer of authority from seniors to subordinates, by referring to Class 12 Business Studies revision notes answer chapter 5. These revision notes will expand on the principles of organisational authority, responsibility, and accountability. The importance of delegation has been explained clearly in a comprehensive and easy to understand language.


Another important aspect of organisation covered under these revision notes is decentralisation. NCERT Class 12 revision notes Business Studies Chapter 5 solution will give the students a clear idea about the importance of organising and its importance along with detailed points of difference between delegation and decentralisation.


Some of the important topics or concepts discussed in this chapter are listed below:

  • Meaning of organising

  • Steps in the process of organising

  • The importance of organising

  • Organisational structure

  • Types of organisational structures

  • Difference between functional structure and divisional structure

  • Formal and informal organisation

  • Difference between the formal and informal organisation

  • Delegation

  • The importance of delegation

  • Difference between authority, responsibility, and accountability

  • Decentralisation

  • The importance of decentralisation

  • Difference between delegation and decentralisation

  • Difference between centralisation and decentralisation


CBSE Class 12 Revision Notes and Key Points

CBSE Class 12 Revision Notes on Business Studies Chapter 5 is one of the best study materials for the students to revise the concepts related to organising. All the concepts of the chapter covered under Revision Notes of Chapter 5 are explained in a very simple manner so that the students can easily understand the deeper meaning of the concept. If you have finished reading the chapter from the textbook, then go through the revision notes to complete your preparation for the exam. 


You can access the free Pdf version of the Revision Notes on Chapter 5 Class 12 Business Studies by clicking on “Download PDF”. You can also download the other chapters of CBSE Class 12 Business Studies revision notes available in free pdf format from our website. Also, check out other important study materials such as NCERT Solutions of Class 12 Business Studies and Important Questions on Class 12 Business Studies from Vedantu’s website or download the app to access the best study materials.


Other Chapter Links On CBSE Class 12 Business Studies Revision Notes


Conclusion

CBSE Class 12 Revision Notes on Business Studies Chapter 5 is one of the greatest study tools for students to revise organising principles. All of the ideas discussed in Chapter 5 Revision Notes are taught in a very basic manner so that students can readily comprehend the deeper meaning of the concept. Once you have done reading the chapter from the textbook, look through the revision notes to finalise your test preparation.


You can access the free Pdf version of the Revision Notes on Chapter 5 Class 12 Business Studies by clicking on “Download PDF”. You can also download the other chapters of CBSE Class 12 Business Studies revision notes available in free pdf format from our website. Also, check out other important study materials such as NCERT Solutions of Class 12 Business Studies and Important Questions on Class 12 Business Studies from Vedantu’s website or download the app to access the best study materials.

FAQs on Organising Class 12 Notes CBSE Business Studies Chapter 5 (Free PDF Download)

1. Why should students refer to the Chapter 5 Class 12 Business Studies revision notes?

The Class 12 Business Studies Chapter 5 revision notes have been compiled by subject-matter experts and covering the topic of ‘Organisation’ in detail. Easy to understand language, tabular format for explaining the differences between the sub-topics, flowcharts, and pointwise explanations make for an interesting read and easy learning. Class 12 Business Studies Chapter 5 revision notes will help the students in preparing for the exams as they will be able to cover the entire chapter in less time without missing out on any important topic. 

2. What is the organisational structure?

Class 12 notes ‘Organising’ aim to help the students in understanding the importance of organisational structure and how it can be achieved. The revision notes explain its importance, the types, and classification of structures namely: formal and informal, functional, and divisional structure. The tabular description of the features, advantages, and disadvantages of each will help the students in understanding and memorising the concepts.

3. Are the Class 12 revision notes Chapter 5 helpful for the exam preparation?

Yes, the Class 12 revision notes Chapter 5 are helpful for the exam preparation. These notes will work as a good study resource for students and help them in covering the syllabus since the topics are explained in a question and answer format.

4. What is the underlying concept of Chapter 5 of Class 12 Business Studies?

Chapter 5 of Class 12 Business Studies talks about the concept of organising, which is the next step after planning for the proper functioning of the organisation. The chapter briefs us about various concepts and features that are involved in the step of organisation. Some of the prominent concepts that are covered in the chapter are the meaning and process of organising, the importance of organising, organisational structure, and the type of organisational structure. For a better understanding of these concepts, you can visit NCERT solutions.

5. What is the importance of organising according to Chapter 5 of Class 12 Business Studies?

organising is an essential step in any organisation in order for its smooth functioning. The process of organising helps workers to have clarity of work relationships and creating a hierarchical order in the organisation. The organisation helps in the appropriate work which reduces the workload and increases the efficiency of the workforce. It also helps in the effective administration and optimum utilisation of resources. organising is a flexible process that helps an organisation to adapt to change and helps in the expansion of the enterprise.

6. How does NCERT revision notes help in securing good marks in Chapter 5 of Class 12 Business Studies?

NCERT revision notes for Chapter 5 Organising, with valuable facts and information, is included in the syllabus provided by the CBSE. These revision notes consist of all the prominent concepts mentioned in the prescribed textbook in a simple and student-friendly language. The concepts are explained in the form of a flow chart to make the process of understanding and learning easy and quick. NCERT revision notes are organised in the same sequence as the NCERT book to avoid unnecessary confusion for the students. The notes and solutions are present on Vedantu's official website (vedantu.com) and mobile app for free of cost.

7. What is the importance of delegation in Chapter 5  of Class 12 Business Studies ?

Delegation helps the manager to utilise their time on matters of higher priority. It helps to establish effective management and motivate the workers. Employees with time to work on projects of importance improves their working skills and sharpens their logical thinking. Delegation of authority to the subordinates gives them a chance to display their work skills and efficiency. For a detailed answer, you can refer to the NCERT Solutions available on Vedantu’s official website or on the Vedantu learning app.

8. Is Chapter 5 of Class 12 Business Studies difficult to learn?

Students often find chapters difficult because of the doubts  or misunderstanding of the concepts. Organising is a chapter that talks about the basics of an organisation in a firm. Students can refer to the NCERT Solutions for a better understanding of the difficult concepts. There are important questions and extra questions for practice that will prepare the students for any kind of possible questions in the examination. Difficult terms such as delegation, decentralisation, and centralization, etc. are explained in a detailed and simple manner for students to understand and learn.