Given below are two statements:
Statement I: The need for an adequate organisation structure is felt by an enterprise whenever it grows in size or complexity.
Statement II: The span of management determines the number of departments in the organisation structure.
In the light of the above statements, choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Statement I is correct but Statement II is incorrect.
Statement I: The need for an adequate organisation structure is felt by an enterprise whenever it grows in size or complexity. — Correct. As a firm grows, new functions and more levels appear, and coordination becomes hard. So the firm has to pay attention to its structure whenever it grows in size or complexity.
Statement II: The span of management determines the number of departments in the organisation structure. — Incorrect. Span of management is the number of subordinates a superior can manage well. It decides the levels of management in the structure, not the number of departments. Departments come from grouping similar jobs.
NCERT (2026-27 Edition): “Organisation Structure Organisation structure is the outcome of the organising process. An effective structure will result in increased profitability of the enterprise. The need for an adequate organisation structure is felt by an enterprise whenever it grows in size or complexity. It is only those enterprises which do not focus on growth that can maintain a particular structure for a long period of time. …” “Organisation Structure … Span of management refers to the number of subordinates that can be effectively managed by a superior. This determines the levels of management in the structure. …” |