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Business Studies · 2025 · 6 marks
CBSE 2025 · Region 2 · Set 1 · Q33
(a) State any three advantages and any three limitations of formal organization.
(a)
State any three advantages and any three limitations
of formal organization.
OR
(b)
State any six advantages of functional structure of
organization.
Advantages of Functional structure:
Marking-scheme solution
Advantages of Formal Organisation:
(i)
It is easier to fix responsibility since mutual relationships
are clearly defined.
(ii)
It helps in avoiding duplication of effort since there is no
ambiguity in the role that each member has to play.
(iii)
It helps in maintaining unity of command through an
established chain of command.
(iv)
It leads to accomplishment of goals by providing a
framework for the operations to be performed.
(v)
It provides stability to the organisation because there are
specific rules to guide behaviour of employees.
Limitations of Formal Organisation:
(i)
It may lead to procedural delays as the established chain of
command has to be followed which increases the time taken for
decision making.
(ii)
Poor organisation practices may not provide adequate
recognition to creative talent, since it does not allow any
deviations from rigidly laid down policies.
(iii)
It is difficult to understand all human relationships in an
enterprise as it places more emphasis on structure and work.
(i)
It leads to occupational specialisation since emphasis is
placed on specific functions. This promotes efficiency in the
utilisation of manpower.
(ii)
It promotes control and coordination within a department
because of similarity in the tasks being performed.
(iii)
It increases managerial and operational efficiency resulting
in increased profit.
(iv)
It leads to minimal duplication of effort which results in
economies of scale and this lowers cost.
(v)
It makes training of employees easier as it focuses on a
limited range of skills.
(vi)
It ensures that different functions get due attention.
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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.