The statement concerns organizational hierarchy, specifically defining reporting lines and lines of command. This aligns directly with the step "Establishing authority and reporting relationship" within the organizing function of management.
The organizing process can be detailed as follows:
- (A) Work Identification and Division: The process of segmenting work into smaller, manageable tasks.
- (B) Departmentalisation: The consolidation of similar job roles into distinct departments.
- (C) Duty Assignment: The allocation of tasks to individual employees.
- (D) Authority and Reporting Relationship Establishment: The formation of a formal organizational structure by delineating chains of command, responsibilities, and communication channels.
The critical phrase in the query, "who he has to take orders from and to whom he is accountable," unequivocally identifies step (D).
Final Answer: (D) Establishing authority and reporting relationship