Each individual should know who he has to take orders from and to whom he is accountable. This helps to create the hierarchical structure and also helps in coordination amongst various departments.’ From the following steps in the process of organisation, identify the step indicated in the above statement:

Correct option is D

In the process of organising, one crucial step is to create a clear chain of command—that is, a structure that establishes:
· Who reports to whom
· Who holds authority
· Who is accountable to which superior
The statement in the question emphasises:
· Knowing from whom to take orders
· Knowing to whom one is accountable
· Building hierarchy and coordination
This is precisely the step of Establishing Reporting Relationships, also called Authority–Responsibility Relationship or Chain of Command.
Information Booster (Important Points)
1. Organising involves dividing work, grouping tasks, assigning duties, and establishing authority relationships.
2. Establishing reporting relationships creates a formal organisational structure.
3. It ensures unity of command (one superior–one subordinate relationship).
4. Clear reporting lines reduce conflicts and role ambiguity.
5. It improves coordination, discipline, and managerial control.
Additional Information
· (a) Identification and division of work – Incorrect; this step focuses on breaking down activities, not defining authority relationships.
· (b) Departmentalisation – Incorrect; this step groups similar activities into departments (e.g., Marketing, HR, Finance), not reporting hierarchy.
· (c) Assignment of duties – Incorrect; this involves allocating tasks to individuals based on skills, not specifying reporting structure.