It is prerequisites to effective functioning of an organisation because it enables the manager to use his time on high priority areas.

Delegation 

The correct answer is option 2- 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.