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Business Studies · 2025 · 6 marks
CBSE 2025 · Region 2 · Set 3 · Q33
(a) Give meaning of Formal Organization’. State any five features of formal organization.
(a)
Give meaning of Formal Organization’. State
any five features of formal organization.
OR
(b)
Differentiate between Functional Structure and
Divisional Structure of organization on any six basis.
Marking-scheme solution
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
Features of formal organization:
(i)
It specifies the relationships among various job
positions and the nature of their inter-relationship which
clarifies who has to report to whom.
(b)
It is a means to achieve the objectives specified in
the plans, as it lays down rules and procedures essential
for their achievement.
(c)
Efforts of various departments are coordinated,
interlinked and
integrated through the formal organisation.
(d)
It is deliberately designed by the top management to
facilitate
the smooth functioning of the organisation.
(e)
It places more emphasis on work to be performed
than
Interpersonal relationships among the employees.
Difference between Functional structure and
Divisional Structure
| Basis | Functional Structure | Divisional Structure |
| (a) Formation | Formation of this structure is based on functions | Formation of this structure is based on product lines |
| (b) Specialisation | It leads to occupational specialisation | It leads to product specialisation |
| (c) Cost | In this structure, functions are not duplicated. hence it is economical. | In this structure, due to duplication of efforts in various departments, it is costly. |
| (d) Coordination | Coordination is difficult for a multi product company | Coordination is easy as all functions related to a particular product are integrated in one division |
| (e) Responsibility | In this, it is difficult to fix responsibility on a particular department | In this, it is easy to fix responsibility for performance |
| (f) Managerial development | Managerial development is difficult in this structure as functional managers are unable to gather experience in diverse areas | Managerial development is facilitated in this structure as divisional heads gain experience in all functions related to a particular product |
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CBSE Class 12 Business Studies past-paper question from the 2025 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.