The correct answer is option 3- Centralisation.
When the decision making authority lies with the top management then it is known as 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.
OTHER OPTIONS
- Decentralisation- 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. Decentralisation explains the manner in which decision making responsibilities are divided among hierarchical levels.
- Delegation- Delegation refers to the downward transfer of authority from a superior to a subordinate. It is a pre-requisite to the efficient functioning of an organisation because it enables a manager to use his time on high priority activities. It also satisfies the subordinate’s need for recognition and provides them with opportunities to develop and exercise initiative.
- Responsibility- Responsibility is the obligation of a subordinate to properly perform the assigned duty. It arises from a superior– subordinate relationship because the subordinate is bound to perform the duty assigned to him by his superior. Thus, responsibility flows upwards, i.e., a subordinate will always be responsible to his superior.
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