The correct answer is option 3: 1, 2 and 3 only.

The explanation for each option is as follows:

Option 1: This option states that New Public Management (NPM) stands for a shift from conventional public policy to cost-effectiveness. While cost-effectiveness is a key component of NPM, it is not the only characteristic. NPM also encompasses other aspects such as efficiency, accountability, and performance measurement.

Option 2: This option suggests that NPM involves clustering rather than pyramids of organization in structural frameworks. While this may be an approach used in some cases of NPM, it is not a defining characteristic of the concept. NPM is more focused on the management and administration of public services rather than the specific organizational structure.

Option 3: This option correctly states that NPM involves a shift from conventional public policy to cost-effectiveness, as well as the use of cluster organizations in structural frameworks. Additionally, it mentions flexible and adaptive operational systems, which is another key aspect of NPM. This option captures the main characteristics of NPM.

Option 4: This option states that NPM involves rigid planning and conventional bureaucratic hierarchy. This is not an accurate description of NPM, as it is primarily focused on promoting flexibility