Read the following passage and answer the following questions.

Garg Chemist has branches all over the country. Recently, they changed how they make decisions. The lower-level managers can now make decisions on their own and trust their judgments. This change has really helped the company succeed. Employees are now handling projects on their own, gaining valuable experience that can help them move up in the company to more important roles in the future. The company believes that delegation is essential. Even before they started decentralizing, the company was doing well. Managers knew that by properly giving tasks to others, they could focus on more important things. This is how the company grew. Delegating also helped establish good relationships between managers and their teams, making reporting relationships clear. The company focuses on specialized products. In the future, managers will have plenty of opportunities to show their skills and grow in their roles.

'Delegating also helped establish good relationships between managers and their teams, making reporting relationships clear.'

Which importance of delegation is highlighted in the above line?

Basis of management hierarchy

The correct answer is option 2- Basis of management hierarchy.

Delegating also helped establish good relationships between managers and their teams, making reporting relationships clear- This line shows the basis of management hierarchy.

Delegation of authority establishes superior-subordinate relationships, which are the basis of hierarchy of management. It is the degree and flow of authority which determines who has to report to whom. The extent of delegated authority also decides the power that each job position enjoys in the organisation.