CUET UG Business Studies Booster Test 2 Organisation Structure and Types -

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CUET UG Business Studies Test 2 Organisation Structure and Types

⏱️ 30 Minutes

❓ 20 Questions

📌 Answers are locked once submitted — results and explanations appear at the end.

CUET UG Business Studies Test 2 Organisation Structure and Types

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QUESTION 1 OF 20

A company is struggling with ambiguity in duties. The CEO decides to establish a clear framework that specifies the correlation and coordination among human, physical, and financial resources. What concept is the CEO working on?

Answer Review

1 A company is struggling with ambiguity in duties. The CEO decides to establish a clear framework that specifies the correlation and coordination among human, physical, and financial resources. What concept is the CEO working on?

A Span of management

B Departmentalisation

C Organisation structure

D Informal organisation

💡 Short Explanation

It provides the framework for managerial and operating tasks. It specifies the relationship between people, work, and resources. It aims to remove ambiguity by defining roles and coordination.

✅ Correct Answer Explanation

The CEO is working on the Organisation structure. As per NCERT, an organisation structure is the "framework within which managerial and operating tasks are performed." It explicitly specifies the relationships between various resources (human, physical, and financial) to ensure that the business enterprise can accomplish its goals effectively. By establishing this framework, the CEO ensures that duties are clearly defined, thereby eliminating ambiguity and enhancing coordination.

❓ Why Other Options Are Incorrect

Option A → Span of management only refers to the number of subordinates a superior can manage, not the entire framework of resource coordination.
Option B → Departmentalisation is just one step in the process of organizing (grouping tasks), not the entire framework itself.
Option D → Informal organisation refers to social networks and spontaneous interactions, which are not established formally by a CEO to coordinate resources.

🎯 Strategy

Used: Contextual/Tonal Matching

Application: The keywords "clear framework" and "coordination among... resources" directly align with the formal definition of organisation structure.

Final Logic: A total framework for resource correlation is the definition of structure.

🧠 Memory Trick

Structure = System of resources.

📚 Class XII – Business Studies – Chapter: Organising – Topic: Organisation Structure

2 Assertion (A): An adequate organisation structure is only needed when an enterprise does not focus on growth. Reason (R): Stagnancy allows companies to maintain a particular structure for a long period without detrimental effects.

A Both A and R are true.

B A is true, R is false.

C Both A and R are false.

D A is false, R is true.

💡 Short Explanation

Structure is vital for growth, not just for stagnancy. A stagnant company still needs a structure to function. Failure to adapt structure during growth leads to collapse.

✅ Correct Answer Explanation

Both statements are conceptually incorrect. Assertion (A) is false because an adequate organisation structure is indispensable specifically for growth and expansion. As an enterprise grows, it becomes more complex, necessitating a robust structure to coordinate more people and products. Reason (R) is false because even stagnant companies require structural adjustments to survive environmental changes; furthermore, the idea that stagnancy "allows" a lack of structural focus is a poor management philosophy.

❓ Why Other Options Are Incorrect

Option A, B, & D → These are incorrect because they assume either the assertion or the reason contains some level of truth, whereas both are logically flawed.

🎯 Strategy

Used: Extreme Word Filter

Application: The words "only needed" and "without detrimental effects" are extreme qualifiers that often signal incorrect management principles.

Final Logic: Since both statements contradict the necessity of structure for growth, both are false.

🧠 Memory Trick

Growth Needs Structure; Rigidity Kills.

📚 Class XII – Business Studies – Chapter: Organising – Topic: Organisation Structure

3 Consider the following statements about the span of management:
1. It refers to the number of subordinates that can be effectively managed by a superior.
2. It determines the levels of management in the organisation structure.

A Only 1 is correct.

B Only 2 is correct.

C Both 1 and 2 are correct.

D Neither 1 nor 2 is correct.

💡 Short Explanation

Span is the "manager-to-subordinate" ratio. A narrow span creates more levels (tall structure). A wide span creates fewer levels (flat structure).

✅ Correct Answer Explanation

Both statements are fundamental truths about the span of management. Statement 1 provides the literal definition: it is the numerical limit of subordinates under one supervisor. Statement 2 describes the structural impact: the span of management directly determines the levels of management. A narrow span means a manager handles fewer people, requiring more managers and more levels, thus shaping the hierarchy of the organization.

❓ Why Other Options Are Incorrect

Option A & B → These are incorrect because they exclude one of the two valid, interdependent characteristics of the span of management.

Option D → Incorrect because both statements are standard NCERT facts.

🎯 Strategy

Used: Substitution

Application: Replacing the term "Span of management" with its definition and its result proves both statements are valid.

Final Logic: Span = People (1) + Levels (2).

🧠 Memory Trick

Span = Subordinates and Staircase (levels).

📚 Class XII – Business Studies – Chapter: Organising – Topic: Organisation Structure

4 Arrange the flow of structural impact from top to bottom based on the text:
1. Determining the span of management.
2. Determining the levels of management in the structure.
3. Giving shape to the organisational structure.

A 1, 3, 2

B 1, 2, 3

C 2, 1, 3

D 3, 2, 1

💡 Short Explanation

First, you decide the manager's capacity (Span). This decision dictates how many layers are needed (Levels). The layers combined define the visual form (Shape).

✅ Correct Answer Explanation

This follows a specific causal chain mentioned in NCERT. First, the span of management (1) is determined based on the nature of work and ability of managers. This decision automatically leads to the number of levels (2) in the management hierarchy (e.g., if the span is narrow, levels increase). Finally, the total number of levels gives shape (3) to the structure, making it either "Tall" or "Flat."

❓ Why Other Options Are Incorrect

Option A → "Shape" is the final result of the "Levels," not the intermediate step.
Option C → You cannot determine "Levels" before knowing the "Span" of management.
Option D → This reverses the logical order of cause and effect.

🎯 Strategy

Used: Logical Sequencing

Application: Identify the cause (Span) and the final effect (Shape).

Final Logic: Span causes Levels, and Levels define Shape.

🧠 Memory Trick

S.L.S. (Span -> Levels -> Shape).

📚 Class XII – Business Studies – Chapter: Organising – Topic: Organisation Structure

5 Arrange the steps indicating how a functional structure operates:
1. Key functions are divided into sub-sections.
2. Similar or related jobs are grouped together.
3. All departments report to a central coordinating head.

A 1, 2, 3

B 3, 1, 2

C 1, 3, 2

D 2, 1, 3

💡 Short Explanation

Grouping by nature is the first action (2). Dividing departments into sub-units comes next (1). Reporting to the top head completes the setup (3).

✅ Correct Answer Explanation

The operation of a functional structure follows this logic: First, similar or related jobs are grouped (2) into major functions like Production or Finance. These major functions are then often further divided into sub-sections (1) (e.g., the Marketing department might be divided into Advertising and Sales sections). Finally, to ensure coordination, all departments report to a central coordinating head (3) such as a Managing Director.

❓ Why Other Options Are Incorrect

Option A → You cannot divide functions into sections (1) before you have grouped the jobs into functions (2).

Option B & C → Reporting to a head (3) is always the final step in establishing a reporting hierarchy.

🎯 Strategy

Used: Elimination

Application: Start with the foundational grouping (2) and end with the top-level reporting (3).

Final Logic: Grouping -> Sub-division -> Reporting.

🧠 Memory Trick

Group, Section, Report (G.S.R.).

📚 Class XII – Business Studies – Chapter: Organising – Topic: Functional Structure

6 Match the functional departments with their focus in a functional structure.

List 1	List 2
1. Production	A. Promoting and selling products
2. Purchasing	B. Acquiring raw materials and goods
3. Marketing	C. Managing and developing personnel
4. Human Resources	D. Manufacturing operations

A 1-A, 2-B, 3-C, 4-D

B 1-D, 2-B, 3-A, 4-C

C 1-C, 2-D, 3-B, 4-A

D 1-B, 2-A, 3-D, 4-C

💡 Short Explanation

Production = Manufacturing (1-D). Purchasing = Acquiring (2-B). Marketing = Promoting/Selling (3-A). HR = Personnel (4-C).

✅ Correct Answer Explanation

This matching follows standard departmental functions: 1. Production (D): Focused on the actual Manufacturing operations. 2. Purchasing (B): Responsible for Acquiring raw materials and other goods. 3. Marketing (A): Concerned with Promoting and selling the company's products. 4. Human Resources (C): Dedicated to Managing and developing personnel.

❓ Why Other Options Are Incorrect

Options A, C, & D → These mispair the departments with their primary responsibilities (e.g., matching Production with Promoting or HR with Manufacturing).

🎯 Strategy

Used: Option Grouping

Application: Match 1-D and 4-C as they are the most distinct pairs. Only Option B fits.

Final Logic: Department names are matched to their literal functional definitions.

🧠 Memory Trick

Production = Process (Manufacturing); Purchasing = Procure.

📚 Class XII – Business Studies – Chapter: Organising – Topic: Functional Structure

📄 Passage

Category: Functional Advantages Passage for Q7 and Q8: "It promotes control and coordination within a department because of similarity in the tasks being performed. It helps in increasing managerial and operational efficiency and this results in increased profit. It makes training of employees easier as the focus is only on a limited range of skills. It ensures that different functions get due attention."

Why is control and coordination easier within a functional department according to the passage?

A Because managers have unchecked authority.

B Because of the similarity in the tasks being performed.

C Because departments are totally independent and self-contained.

D Because span of management is extremely wide.

💡 Short Explanation

Similar tasks are grouped together. Shared skills and vocabulary make coordination smoother. Focus is concentrated on a single functional area.

✅ Correct Answer Explanation

As stated in the passage and NCERT, control and coordination are promoted within a functional department because of the similarity in the tasks being performed. When everyone in a department (e.g., Finance) is working on similar goals using similar skills, it is easier for a manager to oversee the work, set standards, and ensure that all efforts are aligned toward the department's functional objective.

❓ Why Other Options Are Incorrect

Option A → Unchecked authority leads to limitations (like functional empires), not better coordination.
Option C → Functional departments are actually interdependent, not self-contained (Divisional units are self-contained).
Option D → A wide span often makes control more difficult, not easier.

🎯 Strategy

Used: Contextual/Tonal Matching

Application: The answer is explicitly stated in the provided text: "It promotes control and coordination... because of similarity in tasks."

Final Logic: Common tasks lead to easier oversight.

🧠 Memory Trick

Same Task = Same Direction.

📚 Class XII – Business Studies – Chapter: Organising – Topic: Functional Structure (Advantages)

📄 Passage

Training is simplified in a functional structure primarily because:

A Employees are rotated across completely different product lines.

B It requires extensive general management skills.

C The focus remains strictly on a limited range of skills.

D There is high occupational conflict.

💡 Short Explanation

Only one function is learned (e.g., only Accounting). No need to learn product-specific or general management skills initially. Depth of knowledge is prioritized over breadth.

✅ Correct Answer Explanation

In a functional structure, training is easier because the focus remains strictly on a limited range of skills. For instance, an employee in the Production department only needs to be trained in manufacturing processes, not in sales or finance. This concentration makes the training process faster and more effective compared to structures where employees must understand multiple business functions.

❓ Why Other Options Are Incorrect

Option A → Rotation across product lines occurs in a Divisional structure.
Option B → Functional structures promote occupational specialisation; divisional structures require general management skills.
Option D → Conflict is a disadvantage and hinders training rather than simplifying it.

🎯 Strategy

Used: Contextual/Tonal Matching

Application: The text explicitly mentions: "It makes training of employees easier as the focus is only on a limited range of skills."

Final Logic: Less variety to learn means easier training.

🧠 Memory Trick

Functional = Focused Training.

📚 Class XII – Business Studies – Chapter: Organising – Topic: Functional Structure (Advantages)

9 Which of the following is NOT listed as a disadvantage of the functional structure?

A The creation of functional empires where a particular function is overemphasised.

B Difficulty in exchanging information across functionally differentiated departments.

C Conflicts of interest when departmental goals are not compatible.

D High duplication of resources leading to excessive costs.

💡 Short Explanation

Functional structures are economical (No duplication). All marketing is in one place. Duplication is the main disadvantage of a Divisional structure.

✅ Correct Answer Explanation

Functional structures are known for their efficiency and minimal duplication. Therefore, High duplication of resources (D) is NOT a disadvantage of the functional structure—it is actually a key disadvantage of the Divisional structure (where every division has its own set of functional departments). Options A, B, and C are all classic NCERT-listed limitations of the functional design.

❓ Why Other Options Are Incorrect

Option A, B, & C → These are all standard disadvantages of a functional structure (Inflexibility, Coordination issues, and Functional Empires).

🎯 Strategy

Used: Odd One Out

Application: A, B, and C describe problems of separation and focus. D describes a problem of redundancy.

Final Logic: Functional = No Duplication; therefore, Duplication cannot be its disadvantage.

🧠 Memory Trick

Functional is Cheap; Divisional is Duplicated.

📚 Class XII – Business Studies – Chapter: Organising – Topic: Functional Structure (Limitations)

10 The sales department of a firm insists on a customer-friendly design, but the production department refuses because it causes manufacturing difficulties. The lack of a clear separation of responsibility leads to a dispute. This illustrates a limitation of:

A Functional structure

B Divisional structure

C Span of management

D Informal organisation

💡 Short Explanation

Departments focus on their own narrow goals. Sales wants design; Production wants ease. Inter-departmental conflict is a hallmark functional limitation.

✅ Correct Answer Explanation

This scenario illustrates the Functional structure limitation regarding conflict of interests. Because the departments are separated by function, they tend to develop their own perspectives (Sales vs. Production). When their individual goals are incompatible, it leads to a breakdown in coordination and a dispute that harms the overall organizational goal. In a divisional structure, these functions would be integrated under one product head, reducing this specific type of conflict.

❓ Why Other Options Are Incorrect

Option B → In a divisional structure, the product head would resolve this quickly as they oversee both sales and production for that product.
Option C → Span of management deals with the number of people, not the nature of inter-departmental disputes.
Option D → Informal organisation deals with social links, not formal departmental goal conflicts.

🎯 Strategy

Used: Contextual Matching

Application: Conflict between "Production" and "Sales" is a classic example used by NCERT to explain functional coordination issues.

Final Logic: Department vs. Department = Functional Conflict.

🧠 Memory Trick

Functional = Functional Friction.

📚 MCQ Analysis: Questions 11–20

11 Match the elements of a divisional structure with their traits.

List 1	List 2
1. Divisional Unit	A. Different products manufactured
2. Divisional Manager	B. Responsible for performance and has authority
3. Grouping basis	C. Separate, self-contained business unit
4. Divisional nature	D. Multifunctional to achieve a common goal

A 1-A, 2-B, 3-C, 4-D

B 1-B, 2-A, 3-D, 4-C

C 1-D, 2-C, 3-B, 4-A

D 1-C, 2-B, 3-A, 4-D

💡 Short Explanation

Unit = Self-contained (1-C). Manager = Has authority/accountability (2-B). Basis = Products (3-A). Nature = Multifunctional (4-D).

✅ Correct Answer Explanation

1. Divisional Unit (C): Functions as a separate, self-contained business unit. 2. Divisional Manager (B): Is the person responsible for performance and is vested with the necessary authority. 3. Grouping basis (A): The structure is formed based on the different products manufactured. 4. Divisional nature (D): Each division is multifunctional because it contains all functions (Production, Sales, etc.) needed to achieve the goal for that product.

❓ Why Other Options Are Incorrect

Options A, B, & C → These misalign the traits (e.g., matching 'Divisional Manager' with 'Products' or 'Unit' with 'Multifunctional' as its primary definition).

🎯 Strategy

Used: Option Grouping

Application: Match 3-A (Basis = Product). Only Option D has this pairing.

Final Logic: Defining the unit as self-contained and the manager as responsible confirms D.

🧠 Memory Trick

Division = Self-contained Cell.

📚 Class XII – Business Studies – Chapter: Organising – Topic: Divisional Structure

12 Evaluate the following statements regarding divisional self-contained units.
Statement I: Within each division, the functional structure tends to be adopted.
Statement II: Functions are identical across all divisions regardless of the product line.

A Both statements are true.

B Statement I is true, Statement II is false.

C Statement I is false, Statement II is true.

D Both statements are false.

💡 Short Explanation

Divisions use functional grouping internally (I is true). Functions vary based on product needs (II is false). For example, a Steel division needs different functions than a Biscuit division.

✅ Correct Answer Explanation

Statement I is true because once a division is formed (e.g., Garments), it must organize its internal work by functions (Production, Sales, Finance). Statement II is false because functions are not always identical; they vary depending on the nature of the product. A chemical division may require a heavy R&D function, whereas a footwear division may focus more on design and retail marketing.

❓ Why Other Options Are Incorrect

Option A → Statement II is incorrect as products dictate functional requirements.
Option C → Statement I is a core principle of how divisional units are organized internally.
Option D → Incorrect because Statement I is a standard management fact.

🎯 Strategy

Used: Elimination

Application: Recognize that different products (like Software vs. Steel) require different functional setups. This makes II false.

Final Logic: Internal functionalism is true; identical functions across products is false.

🧠 Memory Trick

Inside every Division is a Function.

📚 Class XII – Business Studies – Chapter: Organising – Topic: Divisional Structure

13 Assertion (A): A divisional structure helps in the development of varied skills in a divisional head, preparing him for higher positions. Reason (R): The divisional head gains experience in all functions related to a particular product.

A Both A and R are true, and R is the correct explanation of A.

B Both A and R are true, but R is not the correct explanation of A.

C A is true, but R is false.

D A is false, but R is true.

💡 Short Explanation

Divisional heads manage a "mini-company." They learn Production, Sales, and Finance together. This multi-tasking develops "General Management" skills.

✅ Correct Answer Explanation

Both statements are true and R explains A. Unlike a functional manager who only knows one area (e.g., only Finance), a Divisional Head must oversee every function related to their product line. This experience in all functions (R) provides them with a holistic view of business operations, thereby developing varied skills (A) and preparing them for top-level roles like CEO or MD.

❓ Why Other Options Are Incorrect

Option B → R is not just a separate truth; it is the specific reason why the manager develops varied skills.

Option C & D → Both are standard NCERT points concerning managerial development in a divisional structure.

🎯 Strategy

Used: Contextual Matching

Application: The "General Manager" concept is the hallmark of divisional leadership development in NCERT.

Final Logic: Managing all functions (R) leads to varied skills (A).

🧠 Memory Trick

Division Head = Mini CEO.

📚 Class XII – Business Studies – Chapter: Organising – Topic: Divisional Structure (Advantages)

14 A company wants to launch a new skin-care product line without interrupting its existing cosmetics and garments operations. It simply adds another head and staff. This demonstrates which advantage?

A Functional specialisation

B Economies of scale

C Facilitation of expansion and growth

D Reduction in managerial costs

💡 Short Explanation

New products are added as new "divisions." Existing divisions are not disturbed. Structure is naturally "scalable."

✅ Correct Answer Explanation

This scenario highlights how a divisional structure facilitates expansion and growth. In this structure, new product lines (like skin-care) can be added simply by creating a new division with its own head and staff. This can be done without interrupting existing operations, as the other divisions (Cosmetics, Garments) continue to function as separate, autonomous units.

❓ Why Other Options Are Incorrect

Option A → This is an advantage of functional, not divisional structure.
Option B → Divisional structures often lose economies of scale due to duplication.
Option D → It usually increases managerial costs due to the need for multiple heads.

🎯 Strategy

Used: Contextual Matching

Application: Keywords "launch a new... line" and "without interrupting" are the textbook indicators for "Expansion and Growth."

Final Logic: Adding new parts without breaking old ones = Scalable growth.

🧠 Memory Trick

New Product? Just add a New Block (Division).

📚 Class XII – Business Studies – Chapter: Organising – Topic: Divisional Structure (Advantages)

15 Which of the following is NOT a consequence of managers gaining extensive authority over a particular division?

A They become heavily focused on overall enterprise objectives.

B They may seek to assert their independence.

C They might ignore broader organisational interests.

D They gain power over all activities related to their specific product line.

💡 Short Explanation

High authority can lead to "Division First" thinking. Managers might care only about their own product's profit. Overall company goals might actually be neglected (A is false).

✅ Correct Answer Explanation

When a divisional manager has significant authority, they often become focused on the success of their division alone. This can lead them to ignore broader organisational interests (C) and seek to assert their independence (B). Therefore, the idea that they would become "heavily focused on overall enterprise objectives" is NOT a common consequence; in fact, the lack of such focus is a major limitation of the divisional structure.

❓ Why Other Options Are Incorrect

Option B & C → These are recognized limitations where managers prioritize their own unit over the company.

Option D → This is a factual characteristic of a divisional manager's role.

🎯 Strategy

Used: Odd One Out

Application: B, C, and D describe a "narrow" or "local" focus on the division. A describes a "broad" or "global" focus.

Final Logic: Excess authority in a division usually causes "local" focus, not "global" focus.

🧠 Memory Trick

My Division > Your Company (The Limitation).

📚 Class XII – Business Studies – Chapter: Organising – Topic: Divisional Structure (Limitations)

16 Logically sequence the chain of negative events that can occur in a divisional structure regarding funds:
1. Conflict arises among different divisions.
2. A particular division seeks to maximise its own profits.
3. Allocation of funds becomes a source of dispute.

A 1, 2, 3

B 3, 1, 2

C 2, 1, 3

D 3, 2, 1

💡 Short Explanation

The problem starts at the top with money sharing (3). This causes divisions to fight (1). As a result, they focus only on their own profit at the expense of others (2).

✅ Correct Answer Explanation

The chain of events regarding funds follows this sequence: It begins with the allocation of funds (3) by the corporate head, which often leads to conflict (1) among different divisions competing for the same budget. Once these conflicts escalate, each division becomes defensive and seeks to maximise its own profits (2), sometimes at the cost of the other divisions or the overall organization.

❓ Why Other Options Are Incorrect

Option A → Conflicts (1) are usually triggered by an event like fund allocation (3).
Option C → Maximizing profits (2) is a behavioral outcome of the structural conflict (1).
Option D → Reverses the logic of cause (allocation) and effect (behavior).

🎯 Strategy

Used: Logical Sequencing

Application: Money (Allocation) is always the root cause of the structural dispute.

Final Logic: Allocation (3) -> Conflict (1) -> Selfish profit-seeking (2).

🧠 Memory Trick

A.C.P. (Allocation, Conflict, Profit-seeking).

📚 Class XII – Business Studies – Chapter: Organising – Topic: Divisional Structure (Limitations)

17 Divisional structure is NOT suitable for:

A Enterprises with a large variety of manufactured products.

B Organisations that use different productive resources for varying goods.

C Companies needing to add new departments and levels of management for diverse products.

D Small firms operating with a single product and highly similar tasks.

💡 Short Explanation

Small firms don't need complex divisions. Single products are best managed via functional structures. Divisional structures are too expensive for simple operations.

✅ Correct Answer Explanation

A Divisional structure is designed for complexity and diversity. It is NOT suitable for small firms (D) that have only one product. For such firms, a functional structure is much more efficient and economical because there is no need to duplicate functions or manage separate business units. Options A, B, and C are all classic suitability criteria for a divisional structure.

❓ Why Other Options Are Incorrect

Option A, B, & C → These describe the ideal conditions for a divisional structure (variety, diverse resources, and growth needs).

🎯 Strategy

Used: Elimination

Application: If the organization is "Small" and "Single-product," it is the exact opposite of what a divisional structure requires.

Final Logic: Complexity needs Divisions; Simplicity needs Functions.

🧠 Memory Trick

Single product = Simple (Functional) Structure.

📚 Class XII – Business Studies – Chapter: Organising – Topic: Divisional Structure (Suitability)

18 Which structure is appropriate when an enterprise has a diversified set of activities but still requires a high degree of specialisation strictly tied to occupational functions rather than products?

A Functional structure

B Divisional structure

C Informal structure

D Decentralised autonomous structure

💡 Short Explanation

Focus is on "Occupational functions." Diversified activities are still grouped by "what people do" (skills). This is the core definition of functional suitability.

✅ Correct Answer Explanation

Even if an enterprise has many activities, if the priority is occupational specialisation (e.g., being the best at engineering or being the best at finance across the whole company), the Functional structure is most appropriate. A divisional structure would break these experts up into different product groups, potentially diluting the functional expertise.

❓ Why Other Options Are Incorrect

Option B → This is used when specialisation is tied to the product (e.g., being an expert in 'Steel').
Option C → This is not a formal structure for managing specialized business activities.
Option D → This is a general management style, not a structural category like Functional or Divisional.

🎯 Strategy

Used: Contextual Matching

Application: The phrase "occupational functions" is the key indicator for Functional Structure.

Final Logic: Occupational = Functional; Product = Divisional.

🧠 Memory Trick

Functions = Functional Structure.

📚 Class XII – Business Studies – Chapter: Organising – Topic: Functional Structure (Suitability)

19 Match the following MCQ: Compare functional and divisional structures on various bases.

List 1	List 2
1. Coordination (Functional)	A. Easier due to autonomy and multiple functions
2. Coordination (Divisional)	B. Difficult for a multi-product company
3. Managerial Development (Functional)	C. Easy, as all functions for a product are integrated
4. Managerial Development (Divisional)	D. Difficult, as manager reports to top management

A 1-A, 2-C, 3-B, 4-D

B 1-C, 2-A, 3-D, 4-B

C 1-B, 2-C, 3-D, 4-A

D 1-D, 2-B, 3-A, 4-C

💡 Short Explanation

Functional Coordination = Difficult for many products (1-B). Divisional Coordination = Easy for product lines (2-C). Functional Development = Difficult (manager is limited) (3-D). Divisional Development = Easier (manager is general) (4-A).

✅ Correct Answer Explanation

This comparison is based on the NCERT summary table: 1. Coordination (Functional) (B): Becomes very difficult when the company has many products. 2. Coordination (Divisional) (C): Is easy because all functions (Sales, Prod, etc.) for one product are in one unit. 3. Managerial Development (Functional) (D): Is difficult because the manager only knows one function and always reports upward. 4. Managerial Development (Divisional) (A): Is easier because the head manages all functions autonomously.

❓ Why Other Options Are Incorrect

Options A, B, & D → These misalign the comparative advantages/disadvantages (e.g., claiming functional coordination is easier than divisional).

🎯 Strategy

Used: Option Grouping

Application: Match 4-A (Divisional managers develop better). Only Option C has this match.

Final Logic: Comparison table logic from NCERT confirms these pairings.

🧠 Memory Trick

Divisional = Easy Coordination & Better Managers.

📚 Class XII – Business Studies – Chapter: Organising – Topic: Functional vs Divisional Structure (Table)

20 Firm Alpha has duplication of resources in various departments making it costly, while Firm Beta does not duplicate functions making it economical. Based on the comparative view, what structures are they using?

A Both use Functional structure.

B Firm Alpha uses Functional; Firm Beta uses Divisional.

C Firm Alpha uses Divisional; Firm Beta uses Functional.

D Both use Divisional structure.

💡 Short Explanation

Duplication = Multiple sets of same tools/people (Alpha/Divisional). No Duplication = One tool/person for whole company (Beta/Functional). Functional is economical; Divisional is expensive.

✅ Correct Answer Explanation

Firm Alpha is using a Divisional structure because duplication of resources is its primary disadvantage (each division has its own functions). Firm Beta is using a Functional structure because it avoids duplication by centralizing each function, making it more economical and allowing for economies of scale.

❓ Why Other Options Are Incorrect

Option A & D → Incorrect because the two firms have opposite cost and resource characteristics.

Option B → Reverses the characteristics; functional is the one that is economical.

🎯 Strategy

Used: Contextual Matching

Application: Match "Duplication" with "Divisional" and "Economical" with "Functional."

Final Logic: Alpha matches the drawback of Divisional; Beta matches the benefit of Functional.

🧠 Memory Trick

Divisional = Duplicate (Expensive).

📚 Class XII – Business Studies – Chapter: Organising – Topic: Functional vs Divisional Structure (Table)

CUET UG Business Studies Test 2 Organisation Structure and Types

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