Class 12 Business Studies Chapter 5 MCQ and Important Questions of Organising to prepare for exams in session 2022-2023. Class 12 Business Studies Multiple Choice Questions and Extra important questions are helpful to prepare for exams. Class 12 Business Studies Chapter 5 Solutions.

Class 12 Business Studies Chapter 5 MCQ


The first step in the process of organizing is

[A]. Establishing reporting relationships
[B]. Departmentalisations
[C]. Identification and division of work
[D]. Assignment of duties

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

[A]. Manpower
[B]. Authority
[C]. Incentives
[D]. Promotions

Which of the following is a formal organization?

[A]. Organisation in which official relationship exists.
[B]. Jobs are created with clearly defined authority and responsibility.
[C]. Organization in which scalar chain is followed.
[D]. All of the above.

Grouping of activities on the basis of product lines is a part of

[A]. Delegated organization
[B]. Divisional Organisation
[C]. Autonomous organization
[D]. Functional organization

Meaning of Organising

Organising can be defined as a process that initiates implementation of plans by clarifying work, working environment, working relationships and effectively deploying resources for attainment of identified and desired results. Therefore, it is a process, which coordinates human efforts, assembles resources and integrates both into a unified whole to be utilized for achieving specified objectives.


Span of management refers to ………….

[A]. Number of members in top management
[B]. Length of term for which a manager is appointed
[C]. Number of managers in a organisation
[D]. Number of subordinates under a superior

…….. refers to systematic dispersal of authority to the lowest level.

[A]. Delegation
[B]. Responsibility
[C]. Decentralisation
[D]. Scalar chain

Which of the following is not a feature of divisional structure?

[A]. Its formation is based on product lines
[B]. It is not suitable for large firms.
[C]. It is easy to fix the responsibility on one department
[D]. It facilitates managerial development.

Decentralisation is the result of policy decision made by

[A]. Top management
[B]. Middle management
[C]. Lower management
[D]. Workers

Importance of Organising

    • 1. Benefits of specialization
    • 2. Clarity in working relationship
    • 3. Effective Administration
    • 4. Optimum utilization of resources
    • 5. Adoption to Change
    • 6. Development of Personnel
    • 7. Expansion and growth.

……. provides the basis of managerial hierarchy.

[A]. Decentralisation
[B]. Authority
[C]. Responsibility
[D]. Delegation

……… implies answerability for final outcome.

[A]. Delegation
[B]. Responisibility
[C]. Accountability
[D]. Formal organisation

When operations require high degree of specialization, which type of organization is suitable.

[A]. Divisional structure
[B]. Functional structure
[C]. Both [a] and [b]
[D]. None of the above.

Which type of structure is costly?

[A]. Divisional structure- because there is duplication of resources
[B]. Divisional structure – because there are too many departments.
[C]. Functional structure
[D]. Both [a] and [b].

Features of Formal Organisation

1. It is deliberately created by the top management.
2. It is based on rules and procedures which are in written form.
3. It is impersonal i.e. does not take into consideration emotional aspect.
4. It clearly defines the authority and responsibility of every individual.
5. It is created to achieve organizational objectives.


Decentralisation leads to ……….. autonomy.

[A]. More
[B]. Less
[C]. Equal
[D]. [a] and [c]

This type of organization facilitates expansion and growth.

[A]. Formal
[B]. Informal
[C]. Functional
[D]. Divisional

The framework within which managerial operations are carried out is called

[A]. Organisational structure
[B]. Informal organization
[C]. Divisional structure
[D]. Functional structure

Which of the following is not a feature of divisional structure?

[A]. Its formation is based on product lines
[B]. It is not suitable for large firms.
[C]. It is easy to fix the responsibility on one department
[D]. It facilitates managerial development.
Disadvantages of Formal Organisation
    • 1. The Work is based on rules which causes unnecessary delays.
    • 2. The employees have to do what they are told to do and they have no opportunity to show their creativity.
    • 3. It is difficult to understand all human relationships in an enterprise as it places more emphasis on structure and work.

Inflexibility in operations is major limitation or disadvantage of which type of organizational structure?

[A]. Formal
[B]. Informal
[C]. Functional
[D]. Divisional

Which of the following is not a feature of informal organization?

[A]. Informal communication
[B]. Spontaneous
[C]. Stability
[D]. No clear-cut structure.

Which of the following is not a feature of authority?

[A]. It is right to command.
[B]. It flows upward from subordinate to superior.
[C]. It can be delegated.
[D]. It arises from formal position.

Which of the following does not follow the scalar chain?

[A]. Formal organization
[B]. Functional structure
[C]. Divisional structure
[D]. Informal structure
Advantages of Informal Organisation

1. Prescribed lines of communication are not followed which leads to faster spread of information.
2. Enhances job satisfaction which gives them a sense of belongingness in the organization.
3. Because the subordinates can speak without hesitation before the officers, it helps the officers to understand the problems of their subordinates.

Into how many sub-topics can chapter 5 business studies class 12th be divided to prepare MCQs.

Broadly, there are three sub-topics. Types of organizational structures, delegation and decentralisation and formal and informal organization.

What is the utility of solving MCQs other than preparing for board examination?

For many of the competitive exams, MCQs are the preferred mode of conducting examination and selecting the candidates.

Why is the MCQs based question paper preferred over other means of examination?

Under this mode, the students ability can be just in short span of time.