Master Chapter 5 – Organising with Our MCQ-Based Mock Test!

Do you know how businesses structure their teams and define responsibilities for smooth functioning?
Test your understanding with this MCQ-Based Mock Test on “Organising”, specially designed for Class 12 Business Studies students as per the latest CBSE syllabus (2025–26).

This mock test helps you revise all crucial topics — from the meaning, importance, and process of organising to key concepts like authority, responsibility, delegation, and decentralisation. Strengthen your understanding of how effective organisation builds the backbone of every successful business.

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Includes conceptual, case-based & competency MCQs
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Attempt the Chapter 5: Organising MCQ Mock Test today and get one step closer to BST excellence.

1. Which of the following statements is incorrect?

Authority can be delegated.

Authority flows downward from superior to subordinate.

The scope of authority increases as we move down the hierarchy.

Authority arises from the scalar chain which links the various job positions in the business concern.

2. “Grouping similar nature jobs into larger units called departments” is a step in the process of one of the functions of management. Identify the function of management.

Planning

Organising

Directing

Staffing

3. Observe the picture given below and identify the concept of organising highlighted in it.

Informal Organisation

Delegation

Span of Management

Accountability

4. XYZ Ltd., manufacturing Fast Moving Consumer Goods (FMCG), has been registered under the Companies Act with an authorised 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.

Which of the following is not a disadvantage of the organisation structure of XYZ Ltd.?

Conflict may arise with reference to allocation of funds

It may lead to increase in cost.

Managers may gain power and assert independence and ignore organisation interests.

It ensures that different functions get due attention.

5. The element of delegation which relates to the obligation of a subordinate to properly perform the assigned duty is known as:

Authority

Responsibility

Accountability

Centralisation

6. Which of the following is not a demerit of divisional structure?

It is an expensive structure to maintain, since there may be a duplication of activities across products.

All functions related to a particular product are integrated in one department.

Conflict may arise among different divisional heads due to different interests.

Authority provided to the managers to supervise all activities related to a particular division may lead to undesirable consequences.

7. Span of management refers to:

Number of subordinates at lower level

Total number of managers.

Number of subordinates under a superior.

Number of levels in the organisation.

8. Decentralisation should be applied with caution as:

It can lead to organisational disintegration if departments start to operate on their own guidelines which may be contrary to the interest of the organisation.

It must always be balanced in areas of major policy decisions.

It recognises the decision maker’s need for autonomy.

It propagates the belief that people are competent, capable and resourceful.

9. ‘While performing the organising function, jobs are allocated to the members of each department in accordance with their skills and competencies.’ Identify the step in the organising function being discussed above.

Identification and division of work

Departmentalisation

Assignment of duties

Establishment of reporting relationships

10. ‘There is no doubt in the lines of communication and everyone knows who has to report to whom.’ Which importance of organising is being depicted here?

Benefits of specialisation

Effective administration

Clarity in working relationship

Development of personnel

11. Which of the following statements about organisation structure is false?

Organisation process is the outcome of organising structure.

The organisation structure can be defined as the framework within which managerial and operating tasks are performed.

The span of management, to a large extent gives shape to the organisation structure.

A proper organisation structure ensures smooth flow of communication.

12. Indigo Limited has a staff of 300 people which is grouped into different departments. The organisational structure depicts that 100 people work in Production department, 150 in Finance department, 20 in Technology department and 30 in Human Resource department.

Identify the type of organisational structure being followed by the company.

Functional structure

Divisional structure

Informal structure

None of these

13. Name the concept that refers to the number of subordinates that can be effectively managed by a superior and determines the number of levels of management in the organisation.

Organisation structure

Span of management

Hierarchy of authority

Delegation of authority

14. Due to proper organising and division of work, a company goes for systematic assignment of jobs among the employees. Which importance of organising function of management is highlighted here?

Clarity in working relationship

Benefits of specialisation

Effective administration

Adaption to change

15. XYZ Ltd., manufacturing Fast Moving Consumer Goods (FMCG), has been registered under the Companies Act with an authorised 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.Which of the following is not a disadvantage of the organisation structure of XYZ Ltd.?

Conflict may arise with reference to allocation of funds

It may lead to increase in cost.

Managers may gain power and assert independence and ignore organisation interests.

It ensures that different functions get due attention.

16.

Observe the picture given below and identify the type of organisation structure highlighted in it.

Informal Organisation

Functional Structure

Divisional Structure

None of these

17. Statement I: Responsibility is derived from authority and accountability is derived from responsibility.

Statement II: 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.

Statement I is true and II is false

Statement II is true and I is false

Both the statements are true

Both the statements are false

18. The purpose of ‘Departmentalisation’ in the process of ‘organising’ is:

to adapt changes in the business environment

to facilitate specialisation

to facilitate expansion and growth of the organisation without interrupting the existing operations

to help in increasing managerial efficiency

19. Arrange the steps involved in Organising process in correct sequence and choose the correct alternative:

(i) Departmentalisation

(ii) Identification and division of work

(iii) Establishing reporting relationships

(iv) Assignment of duties

(iii), (ii), (iv), (i)

(iii), (ii), (i), (iv)

(ii), (i), (iv), (iii)

(ii), (iii), (iv), (i)

20. Centralisation refers to:

Retention of decision-making authority

Opening new branches

Separation of divisions or levels

Dispersal of decision-making authority

21. Which type of organisational structure will you suggest for a firm which has diversified activities and operations requiring a high degree of specialisation?

Centralised structure

Decentralised structure

Divisional structure

Functional structure

22. Resident Welfare Association (RWA) of Noida, Sector 15 decided to organise Diwali mela on the eve of Diwali. They listed all the activities to be done, grouped them as per their nature and assigned the activities/duties to different people of their association. After completion of the mela, they found that it was not a success. While analysing the reasons, the President of RWA found that mere allocation of work was not enough in the organisation. He found that an important step in the organising process was missing. Identify the step from the following:

Assignment of duties

Establishing authority and reporting relationships

Identification and division of work

Departmentalisation

23. Match the various terms related to Organising in Column I with their respective statements in Column II and choose the correct alternative:

Column I

Column II

A. Authority

B. Responsibility

C. Accountability

(i) Obligation to perform an assigned task

(ii) Answerability for outcome of assigned task

(iii) Right to command

A – (ii), B – (iii), C – (i)

A – (i), B – (iii), C – (ii)

A – (iii), B – (i), C – (ii)

A – (iii), B – (ii), C – (i)

24. Statement I: Accountability can be delegated.

Statement II: Responsibility can be delegated completely.

Statement I is true and II is false

Statement II is true and I is false

Both the statements are true

Both the statements are false

25. Which of the following is not a merit of divisional structure?

It promotes product specialisation.

It ensures that different functions get due attention.

It promotes flexibility and faster decision-making.

It facilitates expansion and growth as new divisions.

26. Match the columns and choose the correct alternative from the options given below:

Column I

Column II

A. Formal Organisation

B. Functional Structure is suitable

C. Informal organisation

D. Divisional Structure is suitable

(i) R efers to network of social relationships

(ii) Where organisation is large and producing only one category of product.

(iii) when an organisation grows and decides to add product line.

(iv) refers to the organisation which is deliberately designed.

A – (ii), B – (i), C – (iv), D – (iii)

A – (iv), B – (ii), C – (i), D – (iii)

A – (iii), B – (i), C – (iv), D – (ii)

A – (ii), B – (iv), C – (iii), D – (i)

27. Identify the concept of management depicted in the picture given below.

Centralisation

Selection

Decentralisation

Recruitment

28. Delegation is the process of sharing the authority and responsibility.

At two levels

At three levels

At multiple levels

Authority and responsibility cannot be shared

29. Statement I: Informal organisation refers to the organisation structure which is designed by the management to accomplish a particular task.

Statement II: The structure in a formal organisation can be functional or divisional.

Statement I is true and II is false

Statement II is true and I is false

Both the statements are true

Both the statements are false

30. Which of the following is not a demerit of functional structure?

It places more emphasis on the objectives pursued by a functional head than on overall enterprise objectives.

It may lead to conflict of interests among departments due to varied interests.

It leads to occupational specialisation.

It may lead to difficulty in co-ordination among functionally differentiated departments.

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