Which of the following statement is incorrect?

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Large organisations need more centralisation

Option (1) Discipline is the obedience to organisational rules and employment agreement — Correct statement (Incorrect). This is Fayol’s principle of discipline.
Option (2) Authority is the right to give orders and obtain obedience — Correct statement (Incorrect). Fayol defines authority in exactly these words.
Option (3) Division of work is dividing the work into small tasks and assigning them to trained specialist — Correct statement (Incorrect). Under division of work, work is split into small tasks and each task is done by a trained specialist.
Option (4) Large organisations need more centralisation — An incorrect statement (Correct). Centralisation means keeping decision-making power at the top. In general, large organisations have more decentralisation than small ones. A big firm cannot take every decision at the top, so power is spread down the levels.

NCERT (2026-27 Edition): “Division of Work: Work is divided into small tasks/ jobs. A trained specialist who is competent is required to perform each job. Thus, division of work leads to specialisation. …”

“Authority and Responsibility: According to Fayol, “Authority is the right to give orders and obtain obedience, and responsibility is the corollary of authority. The two types of authority are official authority, which is the authority to command, and personal authority which is the authority of the individual manager.” …”

“Discipline: Discipline is the obedience to organisational rules and employment agreement which are necessary for the working of the organisation. …”

“Centralisation and Decentralisation: The concentration of decision-making authority is called centralisation whereas its dispersal among more than one person is known as decentralisation. According to Fayol, “There is a need to balance subordinate involvement through decentralisation with managers’ retention of final authority through centralisation.” The degree of centralisation will depend upon the circumstances in which the company is working. In general large organisations have more decentralisation than small organisations. …”