The downward transfer of authority from a superior to a subordinate is called :

Delegation

The correct answer is option (3) : 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.

1. Decentralization: Decentralization is the process of distributing decision-making authority and power from the top levels of an organization to lower levels or various departments or branches. It allows for a degree of autonomy in decision-making at these lower levels.

2. Centralization : Centralization is the opposite of decentralization. It refers to the concentration of decision-making authority and power at the top or central levels of an organization. In a centralized structure, most key decisions are made by a select group at the top.

3. Delegation: Delegation is the process of transferring authority and responsibility from a higher-ranking individual (superior) to a lower-ranking individual (subordinate) within an organization. The superior entrusts the subordinate with the power to make certain decisions or take specific actions on their behalf.

4. Organization: An organization, in the context of business and management, refers to a structured group of people working together to achieve common goals or objectives. It involves the arrangement of individuals and resources to carry out specific tasks efficiently and effectively.