Wednesday, September 28, 2011

Organization Theory - 13

In the last blog, we began a discussion about vertical differentiation; we continue from there and begin our discussion about very closely knit topic - "span of control" in today's blog.

Simply put, "span of control" would mean the number of subordinates that a manager can direct effectively. Now let’s take an example to see why this span of control becomes important to be considered when one is designing any organization. 

If I have a single person reporting to me, I would be able to spend good amount of time to ensure that he is able to perform the task the way I want him to. My time still remains constant in a day - say 8 hours out of which I spend around 4 hours discussing and building an individual, the remaining 4 hours I spend doing the other tasks that I need to. 

Now, Assume I add another person to the existing individual, so now I guide 2 people. The time I am able to devote to the guiding process is now shared by 2 people. It would ease out if these 2 people are doing the same kind of task, but if it is different, then the attention required would be higher. Imagine the scenario if we have more people - say 4, 10, 20!

There is a limit on the number of people we can effectively coordinate with - this is the ideal span of control. These people report directly to you.

If we have say an organization with 4096 employee and a span of control of 4 people, and another with span of control of 8 people then the 2 structures would look something like this.

Clearly, a taller structure enables closer monitoring of the subordinates by the superior, while the communication as shown the last blog would be taking a beating given the larger number or levels in the hierarchy. The case would be a reverse when we have a wider span of control - the communication would be better but the monitoring of the subordinates would take a longer time. 

It would be good to note that there is no clear answer - there is a trade off that has to be decided upon. In addition to the number of employee (size of the organization), one needs to also consider the nature of the job, and also the nature of the person in the position which would really define the "right" span of control.

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