Read the passage and answer the following questions:

Case: Organising at Stellar Electronics

Stellar Electronics, a fast-growing tech company, decided to reorganize its operations to improve efficiency and innovation. The management focused on defining an organizational structure and implementing effective delegation practices.

The company adopted a functional organizational structure, dividing departments into R&D, production, marketing, sales, and customer service. Each department had specialized teams led by managers responsible for achieving departmental goals.

A clear hierarchy was established, ensuring communication flowed efficiently between levels. Each employee knew their reporting authority, reducing confusion and overlapping roles.

The CEO delegated decision-making authority to departmental heads, empowering them to make quick decisions. Tasks were delegated based on employee expertise, which increased accountability and motivation.

Weekly inter-departmental meetings ensured that different departments worked in harmony to achieve the company's objectives.

The reorganization led to improved productivity, faster decision-making, and better employee satisfaction. The company launched its flagship product six months ahead of schedule and gained a competitive edge in the market.

Stellar Electronics demonstrated how a well-defined organizational structure and effective delegation contribute to achieving business goals.

Which principle of organizing is involved in identifying who reports to whom?

Chain of command

The correct answer is option 1: Chain of command

The passage states: "A clear hierarchy was established, ensuring communication flowed efficiently between levels. Each employee knew their reporting authority, reducing confusion and overlapping roles."

The chain of command refers to the clear line of authority within an organization that defines who reports to whom. At Stellar Electronics, establishing a clear hierarchy ensured smooth communication, reduced confusion, and clarified reporting relationships — all reflecting the principle of chain of command.