The statement refers to clarity of hierarchy — i.e., who reports to whom and who is authorized to direct whom. This is a classic feature of the "Establishing authority and reporting relationship" step in the organizing function of management.
Let’s break down each step of organizing:
- (A) Identification and division of work: Means splitting work into smaller tasks.
- (B) Departmentalisation: Grouping similar jobs into departments.
- (C) Assignment of duties: Assigning tasks to employees.
- (D) Establishing authority and reporting relationship: Creating formal structure by defining lines of authority, responsibility, and communication.
The key phrase in the question is “who he has to take orders from and to whom he is accountable,” which points clearly to step (D).
Final Answer: (D) Establishing authority and reporting relationship