Read the following passage and answer the following questions.

Progress Ltd. which deals in stationery has been registered with a share capital of ₹1000 crores in New Delhi. The company has a manufacturing unit in Madhya Pradesh and a marketing department in Nashik. The company divided its activities into different departments. The company assigned duties and powers without creating formal authority-responsibility relationship. The entire business started working on gossip and based on personal relations.

'The company delegates the authority throughout all levels of management to expand its business.'

Which concept is followed by the company?

Decentralisation

The correct answer is option 3- Decentralisation.

When decision making authority is delegated to all level of management then the company followed decentralisation. Delegation of all decision making functions to the lower level of the hierarchy. Decentralisation explains the manner in which decision making responsibilities are divided among hierarchical levels. Put simply, decentralisation refers to delegation of authority throughout all the levels of the organisation. Decision making authority is shared with lower levels and is consequently placed nearest to the points of action. In other words decision making authority is pushed down the chain of command. When decisions taken by the lower levels are numerous as well as important an organisation can be regarded as greatly decentralised.