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Business Studies · 2025 · 6 marks
CBSE 2025 · Region 2 · Set 2 · Q33
(a) State any three advantages and any three limitations of informal organization.
(a)
State any three advantages and any three limitations
of informal organization.
OR
(b)
State any three advantages and any three disadvantages
of divisional structure of organization.
Marking-scheme solution
Advantages of Informal Organisation:
(i)
It leads to faster spread of information as well as a quick
feedback as prescribed lines of communication are not
followed.
(ii)
It helps to fulfill the social needs of the members which
enhances their job satisfaction and gives them a sense of
belongingness in the organisation.
(iii)
It contributes towards fulfillment of organisational
objectives by compensating for inadequacies in the formal
organisation.
Limitations of informal organisation:
(i)
When an informal organisation spreads rumours, it becomes
a destructive force and goes against the interest of the formal
organisation.
(ii)
It may lead to resistance to change which may delay or
restrict growth as the management may not be successful in
implementing changes if the informal organisation opposes
them
(iii)
It pressurizes members to conform to group expectations
which may be against organisational interest.
OR
Advantages of Divisional structure:
(i)
Product specialisation helps in the development of varied
skills in a divisional head and this prepares him for higher
positions. This is because he gains experience in all functions
related to a particular product.
(ii)
It helps in fixation of responsibility in cases of poor
performance of the division as the divisional heads are
accountable for profits for their department.
(iii)
It promotes flexibility and initiative because each division
functions as an autonomous unit which leads to faster decision
making.
(iv)
It facilitates expansion and growth as new divisions can be
added without interrupting the existing operations by merely
adding another divisional head and staff for the new product
line.
Disadvantages of Divisional structure:
(i)
Conflict may arise among different divisions with reference
to allocation of funds and further a particular division may seek
to maximise its profits at the cost of other divisions.
(ii)
It may lead to increase in costs since there may be a
duplication of activities across products.
(iii)
It provides managers with the authority to supervise all
activities related to a particular division. In course of time, such
a manager may gain power and in a bid to assert his
independence may ignore organisational interests.
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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.