When the decision making authority lies with the top management then it is known as:

Centralisation

The correct answer is option 3- Centralisation.

In many organisations the top management plays an active role in taking all decisions while there are others in which this power is given to even the lower levels of management. Those organisations in which decision making authority lies with the top management are termed as centralised organisations whereas those in which such authority is shared with lower levels are decentralised organisations.