The production department at Karishma Ltd., a firm manufacturing readymade garments for men has an objective to increase production by 10% but the Sales department does not approve of the increase in production, till changes are brought about in the product to incorporate latest fashion. These kinds of conflicts bring to light which point of importance of the coordination that can help to accomplish the linking of activities of various departments:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Functional Differentiation
Option (1) Growth in Size — Incorrect. As an organisation grows, it employs more people, each with his own goals. Coordination is then needed to bring those individual goals in line with the organisation’s goals. The conflict here is between departments, not individuals.
Option (2) Functional Differentiation — Correct. The work of an organisation is divided into departments such as production, finance and marketing. Each department may have its own objectives and way of working. Production wants more output, while sales wants the product changed first. Coordination links the activities of the departments so that they all work towards common goals.
Option (3) Specialization — Incorrect. Specialists often believe that only they are qualified to judge their work, so they ignore others. Coordination is needed to bring their views together. The conflict here is between two departments’ objectives, not between specialists.
Option (4) Efficiency — Incorrect. Coordination does improve efficiency, but efficiency is not one of the reasons for which coordination is needed. See the Note below.
Note: NCERT gives three reasons why coordination is needed in an organisation: growth in size, functional differentiation and specialisation. Efficiency is not one of these three. It is a result of good coordination, not a reason for needing it.
NCERT (2026-27 Edition): “Functional differentiation: … In an organisation there may be separate departments of finance, production, marketing or human resources. All these departments may have their own objectives, policies and their own style of working. For example, the marketing department’s objective may be to increase sales by 10 per cent by offering discounts. But, the finance department may not approve of such discounts as it means loss of revenue. …” “(i) Growth in size: As organisations grow in size, the number of people employed by the organisation also increases. …” |