Delegation of authority establishes superiorsubordinate relationship. It shows the degree and flow of authority in an organisation. Identify the importance of delegation shown here.

The correct option is Basis of management hierarchy.

Step-by-step explanation:

1. Understanding Delegation of Authority: Delegation is the transfer of authority from a superior to a subordinate. When a manager delegates a task, they grant the subordinate the necessary power (authority) to perform that task, while retaining ultimate responsibility.

2. Establishing Relationships: The act of delegation clearly defines who reports to whom. It defines the superior-subordinate relationship by showing who has the power to give directions and who is expected to follow them.

3. Creating the Hierarchy: This flow of authority from top to bottom is what forms the management hierarchy (or chain of command) in an organisation. Without the delegation of authority, there would be no formal levels of management, as all decision-making power would remain concentrated at a single point. Therefore, delegation acts as the foundation or basis of the management hierarchy.