Consider the following statements about organisation structure:
(A) Span of management refers to the number of superiors by whom a subordinate can be effectively managed.
(B) Organisation structure is the outcome of the organising process.
(C) The organisation structure specifies the relationships between people, work and resources.
(D) The organisation structure allows coordination among human, physical and financial resources, which enables an enterprise to set its desired goals.
(E) According to Peter Drucker, the wrong organisation structure will seriously impair business performance and even destroy it.
Which of the statements given above are correct?
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (B), (C) and (E) only
(A) Span of management refers to the number of superiors by whom a subordinate can be effectively managed. — Incorrect. It is the reverse. Span of management is the number of subordinates that one superior can manage well.
(B) Organisation structure is the outcome of the organising process. — Correct. Organising sets up jobs, departments and relations. The structure that results is the outcome of the organising process.
(C) The organisation structure specifies the relationships between people, work and resources. — Correct. The structure is the framework in which tasks are done. It lays down how people, work and resources relate.
(D) The organisation structure allows coordination among human, physical and financial resources, which enables an enterprise to set its desired goals. — Incorrect. The coordination part is right, but it helps the firm accomplish its desired goals. Goals are set in planning, not by the structure.
(E) According to Peter Drucker, the wrong organisation structure will seriously impair business performance and even destroy it. — Correct. Drucker calls the structure an indispensable means, and says the wrong structure will seriously impair performance and even destroy it.
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. …” “Organisation Structure … Peter Drucker emphasises on the importance of having an appropriate organisation structure when he says, “organisation structure is an indispensable means; and the wrong structure will seriously impair business performance and even destroy it.” …” “Organisation Structure … The organisation structure can be defined as the framework within which managerial and operating tasks are performed. It specifies the relationships between people, work and resources. It allows correlation and coordination among human, physical and financial resources and this enables a business enterprise to accomplish desired goals. The organisation structure of a firm is shown in an organisation chart. …” “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. …” |