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The tendency to withhold a larger proportion of formal authority at higher levels of the management hierarchy is called:

Solution

✅ Correct Option: 2

Option 1 -> Formalisation refers to the extent to which rules, procedures, and communications are documented and standardized in an organization, not about authority distribution.

Option 2 -> Centralisation is the concentration of decision-making authority and power at the top levels of management, where higher-level managers retain control over decisions.

Option 3 -> Bureaucracy is a broader organizational structure characterized by formal rules, hierarchy, and procedures, but doesn't specifically define authority concentration.

Option 4 -> Decentralisation is the opposite concept - it involves distributing authority and decision-making power to lower levels of management.


Hence, Option 2: Centralisation -> When an organization withholds formal authority at higher management levels rather than delegating it downward, this is the defining characteristic of a centralized structure where top management retains control over key decisions -> correct

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