1. Which of the following best defines the management function of "Organizing"?
A. Motivating employees to achieve targets
B. Monitoring and evaluating performance
C. Arranging resources and activities in a structured way to achieve objectives
D. Communicating decisions across levels
Organizing is the process of arranging resources (people, finance, materials) and tasks in a structured manner so that organizational objectives can be effectively achieved.
2. Which of the following is NOT a fundamental step in the process of organizing?
A. Setting organizational vision and mission
B. Grouping tasks into departments
C. Assigning responsibilities
D. Establishing authority relationships
Setting vision and mission belongs to the "Planning" function, not "Organizing". Organizing focuses on grouping activities, assigning roles, and defining authority relationships.
3. Which of the following highlights the importance of organization in management?
A. It helps in reducing employee salaries
B. It eliminates the need for supervision
C. It minimizes financial risk
D. It creates clarity in roles, responsibilities, and authority
A proper organizational structure provides clarity in roles and authority, avoids duplication of work, and ensures smooth coordination within the organization.
4. Which principle of organizing ensures that the amount of authority given is equal to the responsibility assigned?
A. Principle of Unity of Command
B. Principle of Authority-Responsibility Balance
C. Principle of Coordination
D. Principle of Division of Work
The principle of authority-responsibility balance states that authority should be equal to responsibility; otherwise, it may lead to inefficiency or misuse of power.
5. Which of the following is a key benefit of organizing for financial institutions like banks?
A. Clear delegation of tasks improves efficiency in handling customer services
B. It reduces CRR and SLR requirements
C. It helps in avoiding interest rate fluctuations
D. It replaces the need for internal audit
In banks, organizing ensures proper role clarity across departments like credit, treasury, and retail operations, improving efficiency and customer service.
6. What is the first step in the Organising process?
A. Assigning duties
B. Delegation of authority
C. Identification and classification of activities
D. Establishing reporting relationships
The first step in organising is to identify and classify the activities that need to be performed to achieve organisational objectives.
7. After identifying activities, the next stage in the organising process is:
A. Grouping activities into departments
B. Assigning authority
C. Framing policies
D. Recruitment of staff
Once activities are identified, they are logically grouped into departments, divisions, or sections based on similarity and efficiency.
8. Which step of the organising process ensures that individuals know what work is expected from them?
A. Grouping activities
B. Establishing authority structure
C. Delegating authority
D. Assigning duties
Assigning duties clarifies individual roles and makes employees accountable for specific tasks within the organisation.
9. Establishing reporting relationships in the organising process primarily aims to:
A. Increase profits directly
B. Define the hierarchy and chain of command
C. Remove supervision requirements
D. Reduce the number of employees
Establishing reporting relationships defines who reports to whom, thereby ensuring unity of command and smooth flow of communication.
10. Which of the following correctly represents the logical sequence of the organising process?
A. Identify activities → Group activities → Assign duties → Establish authority relationships
B. Assign duties → Identify activities → Establish authority → Group activities
C. Establish authority → Identify activities → Assign duties → Group activities
D. Group activities → Establish authority → Assign duties → Identify activities
The correct sequence is: Identification of activities → Grouping of activities → Assignment of duties → Establishing authority and reporting relationships.
11. Which principle of organizing states that an employee should receive orders from only one superior?
A. Principle of Coordination
B. Principle of Authority-Responsibility
C. Principle of Unity of Command
D. Principle of Division of Work
The principle of Unity of Command ensures that an employee reports to only one superior to avoid confusion and conflicting instructions.
12. The principle of "Scalar Chain" in organizing refers to:
A. The unbroken line of authority from top management to the lowest rank
B. Balancing authority with responsibility
C. Grouping activities into departments
D. Specialization of tasks
Scalar chain establishes a clear hierarchy of authority linking every individual in the organization to the top management.
13. Which of the following is NOT a principle of organizing?
A. Division of Work
B. Principle of Profit Maximization
C. Unity of Command
D. Authority-Responsibility Balance
Profit maximization is an objective of business, not a principle of organizing. Organizing principles include unity of command, division of work, scalar chain, and authority-responsibility balance.
14. A line organization is most suitable for:
A. Complex organizations with multiple product lines
B. Large organizations with diversified functions
C. Service-oriented institutions with wide geographical presence
D. Small organizations with simple operations
Line organization is the oldest and simplest form, suitable for small organizations with limited activities, where authority flows directly from top to bottom.
15. Which type of organization structure combines both line authority and staff advisory functions?
A. Matrix Organization
B. Line and Staff Organization
C. Functional Organization
D. Project Organization
Line and Staff Organization maintains the direct authority of line managers while allowing specialized staff to provide expert advice.
16. In which type of organization does an employee report to two superiors — one functional and one project manager?
A. Line Organization
B. Line and Staff Organization
C. Matrix Organization
D. Functional Organization
In a Matrix Organization, employees have dual reporting relationships – typically to both a functional manager and a project manager.
17. Organisation structure primarily refers to:
A. The formal arrangement of authority and responsibility within an organisation
B. The informal relationships among employees
C. The external market structure of the organisation
D. The mission and vision statements of the organisation
Organisation structure is the formal framework that defines roles, responsibilities, and authority relationships to achieve organisational objectives.
18. Which of the following is NOT a characteristic of a good organisation structure?
A. Clarity of authority and responsibility
B. Flexibility to adapt to changes
C. Proper delegation of authority
D. Encouraging multiple command lines without coordination
A good organisation structure must provide clarity, coordination, and flexibility. Multiple command lines without coordination create confusion, violating the principle of unity of command.
19. Organisation charts are useful because they:
A. Replace the need for communication
B. Provide a visual representation of authority relationships and reporting lines
C. Guarantee higher profits
D. Eliminate the need for supervision
Organisation charts visually depict the structure, showing who reports to whom, helping employees understand reporting relationships and hierarchy.
20. A limitation of organisation charts is that they:
A. Provide clarity about reporting lines
B. Help in identifying authority-responsibility relationships
C. Fail to show the informal relationships in the organisation
D. Indicate the hierarchy of authority
Organisation charts display only the formal structure and reporting lines. They do not capture informal networks or personal relationships among employees.
21. Organisation manuals are primarily designed to:
A. Replace all levels of management
B. Serve as legal documents for shareholders
C. Outline financial performance reports
D. Provide detailed guidelines, policies, and procedures for employees
Organisation manuals document policies, procedures, and responsibilities, serving as a reference guide to ensure consistency in operations and decision-making.
22. Which of the following best describes the relationship between organisation charts and organisation manuals?
A. Charts show the structure visually, while manuals provide detailed written instructions
B. Both represent informal communication patterns
C. Manuals are only for top management, while charts are for employees
D. Both are primarily financial documents
Organisation charts provide a visual framework of authority, whereas manuals give detailed explanations of duties, policies, and procedures. Both complement each other.
23. Organisation culture primarily refers to:
A. The legal framework governing the organisation
B. The shared values, beliefs, and norms that influence employee behaviour
C. The financial strength of the organisation
D. The organisation’s physical infrastructure
Organisation culture is the set of shared values, norms, and practices that guide how employees interact and work within an organisation.
24. Which of the following is NOT a characteristic of a strong organisation culture?
A. Clear values communicated to all employees
B. Consistent behaviour across departments
C. Frequent confusion in role expectations
D. High commitment from employees
A strong organisation culture reduces confusion, creates unity, and enhances employee motivation. Confusion in roles indicates a weak culture.
25. Authority in an organisation is best defined as:
A. The right to make decisions and give orders to achieve organisational objectives
B. The moral obligation to complete tasks
C. The ability to influence without responsibility
D. The financial capital available with the organisation
Authority is the legitimate right of a manager to make decisions, issue commands, and allocate resources to achieve organisational goals.
26. Responsibility in organising is most closely related to:
A. The informal network of employees
B. The right to use organisational resources
C. The financial performance of the organisation
D. The duty to perform an assigned task satisfactorily
Responsibility is the obligation of an employee to perform the assigned task to the best of their ability, in line with organisational expectations.
27. A key issue in designing an organisation structure is:
A. Selecting the company logo and branding
B. Balancing centralisation and decentralisation of authority
C. Choosing office furniture and equipment
D. Deciding the annual dividend payout
A major issue in designing structure is determining the degree of centralisation vs. decentralisation to balance control with flexibility.
28. Which of the following is a common problem in organisation structure design?
A. Proper delegation of duties
B. Clear authority-responsibility relationship
C. Role conflict and duplication of efforts
D. Efficient communication channels
Poorly designed structures may lead to overlapping roles, duplication of efforts, and role conflict, reducing organisational efficiency.
29. Organisational change is best described as:
A. A routine day-to-day activity
B. The elimination of old employees and recruitment of new ones
C. A minor adjustment in office layout
D. A process through which organisations adapt structures, processes, or culture to meet new challenges
Organisational change refers to deliberate efforts to shift strategy, structure, culture, or processes to adapt to evolving internal and external conditions.
30. Which of the following is NOT a driving force of organisational change?
A. Technological advancements
B. Employee resistance to delegation
C. Changing customer preferences
D. Regulatory and legal requirements
Forces such as technology, customer needs, and regulations drive change. Resistance is a barrier, not a driver.
31. Which model of change includes 'Unfreezing, Changing, and Refreezing' stages?
A. Kurt Lewin’s Change Model
B. McGregor’s Theory X and Y
C. Maslow’s Hierarchy of Needs
D. Porter’s Five Forces Model
Kurt Lewin’s three-stage model describes change as: Unfreezing (preparing for change), Changing (transition), and Refreezing (stabilising new practices).
32. Conflict in organisations can be functional when:
A. It disrupts teamwork and reduces morale
B. It leads to a total breakdown of communication
C. It stimulates creativity, innovation, and problem-solving
D. It results in constant employee turnover
Not all conflict is negative. Functional conflict can encourage different viewpoints, spark creativity, and improve decision-making.
33. Which of the following is NOT a common source of organisational conflict?
A. Scarcity of resources
B. Goal incompatibility
C. Poor communication
D. Clearly defined roles and responsibilities
Ambiguity and lack of clarity cause conflicts. Clearly defined roles help reduce conflicts, not create them.
34. Which conflict resolution strategy focuses on both high assertiveness and high cooperation?
A. Avoiding
B. Collaborating
C. Compromising
D. Accommodating
Collaborating aims for a win–win outcome by addressing the concerns of all parties with both assertiveness and cooperation.
