Class 12 Business Studies - Chapter Organising NCERT Solutions | A company X limited manufacturing cosmet
A company X limited manufacturing cosmetics, which has enjoyed a pre-eminent position in business, has grown in size. Its business was very good till 1991. But after that, new liberalised environment has seen entry of many MNC’s in the sector. With the result the market share of X limited has declined. The company had followed a very centralised business model with Directors and divisional heads making even minor decisions. Before 1991 this business model had served the company very well as consumers had no choice. But now the company is under pressure to reform. What organisation structure changes should the company bring about in order to retain its market share? How will the changes suggested by you help the firm? Keep in mind that the sector in which the company is FMCG.
The organisation structure changes should the company brings to retain its market share are:
- The company should increase delegation and decentralisation of authority to allow decision-making at all levels.
- Since, the company is dealing in FMCG (Fast Moving Consumer Goods Sector), the lower level staff should be given more power to clinch deals like giving them authority to give customers more discounts on bulk orders, etc. This is done because the FMCG sector characterises dynamic customer preferences and frequent change in taste which can be judged easily by people at action points.
- Development of a good communication system from lower levels to top level, to help top management take strategic decisions on changing situations.
- Suggestion systems should be initiated and good suggestions should be rewarded.
- Maximum participation in decision-making should be ensured to motivate staff and achieve good results for the company.
Benefits that the company would derive from these changes are:
- Developing initiative among subordinates.
- Development of managerial talent for future.
- Quick decision-making.
- Relief to the top management.
- Better control, since each department or individual can be held accountable for his/her results, it would facilitate better control.
More Questions From Class 12 Business Studies - Chapter Organising
- Q:-
Why delegation is considered essential for effective organising?
- Q:-
A company manufacturing sewing machines set up in 1945 by the British promoters follows formal organisation culture in totality. It is facing lot of problems in delays in decision making. As the result it is not able to adapt to changing business environment. The work force is also not motivated since they cannot vent their grievances except through formal channels, which involve red tape. Employee turnover is high. Its market share is also declining due to changed circumstances and business environment. You are to advise the company with regard to change it should bring about in its organisation structure to overcome the problems faced by it. Give reasons in terms of benefits it will derive from the changes suggested by you.
- Q:-
Neha runs a factory wherein she manufactures shoes. The business has been doing well and she intends to expand by diversifying into leather bags as well as western formal wear thereby making her company a complete provider of corporate wear. This will enable her to market her business unit as the one stop for working women. Which type of structure would you recommend for her expanded organisation and why?
- Q:-
Decentralisation is an optional policy. Explain why an organisation would choose to be decentralised.
- Q:-
Identify the network of social relationships which arises spontaneously due to interaction at work.
- Q:-
Decentralisation is extending delegation to the lowest level. Comment.
- Q:-
A company, which manufactures a popular brand of toys, has been enjoying good market reputation. It has a functional organisational structure with separate departments for Production, Marketing, Finance, Human Resources and Research and Development. Lately to use its brand name and also to cash on to new business opportunities it is thinking to diversify into manufacture of new range of electronic toys for which a new market is emerging. Which organisation structure should be adopted in this situation? Give concrete reasons with regard to benefits the company will derive from the steps it should take.
- Q:-
Can a large sized organisation be totally centralised of decentralised? Give your opinion.
- Q:-
Draw a diagram depicting a functional structure.
- Q:-
Discuss the elements of delegation.
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(Further information related to the above question 6) The management of company Bhasin Limited now realised its folly. In order to rectify the situation it appointed a management consultant -Mukti Consultants - to recommend a restructure plan to bring the company back on the rails. Mukti Consultants undertook a study of the production process at the plant of the company Bhasin Limited and recommended the following changes —
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(The above changes should be introduced apart from the steps recommended as an answer to Part c - case problem 6 above.) It was expected that the changes will bring about a radical transformation in the working of the company and it will regain its pristine glory.
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