Question

The form of organisation is determined by

• A. size of business
• B. location of business
• C. study of business
• D. none of these

Hint:

Think of it this way: bigger the business, more complex the organisation form.

Answer 1

The Correct Option is A

Step 1: Forms of organisation.
Common forms of organisation include sole proprietorship, partnership, joint stock company, and cooperative societies.
Step 2: Role of business size.
- A small-scale business (like a retail shop) usually fits into sole proprietorship.
- A medium-scale business may go for partnership.
- A large-scale business generally requires a joint stock company.
Thus, the size of business largely determines the organisational form.
Step 3: Option analysis.
- (A) Size of business: Correct, most important factor.
- (B) Location of business: Influences operations but not the basic form.
- (C) Study of business: Helpful but not the deciding factor.
- (D) None of these: Wrong, since (A) is right.
Step 4: Conclusion.
The size of the business is the key factor in deciding the form of organisation.