• Decrease font size
  • Reset font size to default
  • Increase font size
Organization's size and span of control PDF
(162 votes, average 3.20 out of 5)
Written by Ashim Gupta   
Sunday, 10 January 2010 04:15

Organization’s size and span of control

Organization’s size is determined by number of its employees, the largeness of its operation, and its market reach and share. It also poses a very different challenge for the organization’s leaders, while small organizations are build for innovation, large are meant for operational efficiency. The skills necessary for entrepreneurship are quite different from that of running a large and diverse organization, large organizations requires more concern for people, controlling specialized departments and a talent for sensing issues buried deep in the organization.

Why organizations strive for growth?

  1. Better customer service: Organizations grow their revenue by increasing their customer base, as a consequence, the product and services need more changes and support. To serve the customer better, the organization has to employee more resources.
  2. Grow for survival: Small organizations are more easily affected by the sudden changes in the external environment; hence the business leaders feel compelled to grow or perish.
    1. Control more resources: Growth ensures that the organization has better control over the necessary external resources like raw material, skilled workers and technological advancement.
    2. Increase market share: Growth also ensures that the organization can compete globally, can penetrate new markets and can provide good service and influence customer loyalty.
    3. Deter competition: Big organization can invest in complex products, has means to control cost and can be aggressive in marketing strategies. All such measures result in stabilizing the market in long term and act as deterrent to new entrants.
    4. Diverse product lines: Having several products and technologies provides better market intelligence for new products and changing customer preferences. It ensures that while older products lose market share and turn out to be obsolete, the newer are in queue to replace them.
  3. Exciting employee opportunities: A growing organization provides exciting and vibrant work environment, better career growth opportunities and can attract best available brains. It should be noted that a growth is the stage of becoming large, once it has attained the large status, it may get stagnant and might only provide a long and stable career.

Characteristics of organizational size

  1. Technology required to produce the product is major determinant of size, an airplane, space shuttles, communication satellites, cable bridges, a sport stadium etc require technology that requires a large number of people. Consequently a large organization must be producing something that cannot be produced efficiently with smaller size; otherwise it indicates excessive cost & overhead and needs to be corrected. Hence both technology and size are interrelated and influence the structure of the organization.Relationship between size, technology & structure
  2. Amount of task specialization increases with size, the work design is focused and require individuals and teams to deliver a well defined quality of task.
  3. Management hierarchy grows with size: Increased size results in more specialization and decentralization of decision making, the tasks are delegated to teams and are managed by the lower level managers or supervisors. The span-of-control discussed later, makes it necessary to add more management layers for better control of resources and inter-organizational interactions.
  4. The rate at which the size influences the organizational structure decreases as the size increases, thus the impact of size increase in more in a small organization.
  5. Job satisfaction decreases as the size increases, more specialization and focused work design causes an increase in peer competition; thereby reduces the career growth opportunities.

Differences between large and small organizations

Large

Small

Stabilizes market

Introduces competition

Produce complex task & products, has capital and resources to do so.

Produces innovative concepts & products

Predator of small firms, tends to acquire them.

Prey for large firms, get’s bought and since mergers are rarely successful, it finally gets dissolved.

Better  resistance towards adverse external environmental changes.

Growth & existence is dependent on external environment.

Serves mass markets, tends to have global reach.

Serves niche customers and markets and strives to grow.

What is Span of control?

The span of control refers to number of employees that directly report to a single manager. Span of control determines the structure of an organization, a narrow span of control results in hierarchal organization while broad span of control leads to flat structure.

 Since management represents the activities that do not directly result in productivity, they are rather a overhead, span of control determines the additional operational cost. Quantitatively,  companywide overhead can be calculated by dividing the total number of management staff with the size of organization.

Span of control formulation

 What is an optimal ratio of manger to direct reports without compromising the productivity? It is a fundamental problem in designing the structure of an organization, empirically this range is pretty wide, from 4 to 22 depending upon the nature of work. In 1933, V. A. Graicunas, a paris based consultant formulated the span of control based on number of direct and indirect relationships that a superior has to manage. Graicunas identified three types of relationships:

  1. Number of direct relationships between manager and subordinate, it represents the span of control.
  2. Number of peer-to-peer relationships, it represent issues due to interpersonal conflicts. Note that each pair of peers represent 2 relationship and not 1, if there are two subordinates, dick and jane, dick might have different concern for jane than jane’s concern for dick. Hence for a manger, they represent 2 different set of problems and not one.
  3. Direct relationship between manager and subset of subordinates. Similar to previous peer-to-peer relationship, the manager “bill” will have to behave differently with dick when jane is also present.

Organization's span of control

Graicunas also formulated the minimum relationship in case where there was only one relationship between peer-peer or manager-subordinate subset cases, this occurs if each subordinate are provided independent task, minimizing their interactions. This however doesn’t undermine the role of a team, it is assumed that the manager is responsible for a project that is carried out by his team, but the subtasks are designed to minimize direct dependencies.

The following table demonstrates Graicunas formulation of span of control, its minimum and maximum cases and it also shows that relationship complexity increases tremendously as 5th or 6th subordinate is added.

Direct

Cross

Group

Total

n (max)

n(n-1)

n(2n-1-1)

n(2n-1+n-1)

n ( min)

n/2(n-1)

2n-n-1

2n+n/2(n-1)-1

4

12max, 6min

28max,11min

44max , 21min

5

20max,10min

75max , 26min

100max, 41min

6

30max,15min

186max,57min

1296max,78min

Size and Structural Paradox

The reason why I have discussed span-of-control in the context of size is because it determines the level of hierarchy required to mange it. The table below demonstrates the relationship between the span of control, hierarchy and total number of employees (size).

Hierarchy

2

3

4

5

Span of control

4

21

85

341

1365

5

31

156

781

3906

6

43

259

1555

9331

As an organization grows in size, it either needs more managers to control the productivity, thereby adding layers of management hierarchy, or it increases the span-of-control, increasing exponentially the management complexity.  This paradox also questions the feasibility of horizontal organizations when the internal factors demand smaller span-of-control. Perhaps, in practicality, the organizations grow naturally into hierarchical organizations due to this paradox. Given a choice, the management will always tend to choose more control; it gives them the confidence and power.

This analysis also explains why employee/job satisfaction decreases as the size grows, hierarchical growth depletes employee empowerment while larger span-of-control simply makes the manager ineffective and the team situation chaotic. 

Comparison of span-of-control

Narrow Span

Broad Span

Close supervision & directed control.

Overloaded supervisors, loss of control.

Many levels of management, high cost of management staff.

Low management overhead, better operational cost and profit margins.

Less independence and decision authority for subordinates.

Encourages empowerment through delegation of authority and decision making.

Large distance between top management & bottom staff. Poor executive communication and visibility.

Employees have better communication with the top management.

Factors influencing span-of-control

  1. Environmental Stability: When the external environment is more stable than dynamic, more employees can be supervised by a single manager. Stable environment is less demanding and reduces the need for quick response, thereby provide more flexibility in time and schedules.
  2. Nature of work: Routine jobs, tasks that require limited skills or are focused, require only occasional management decision and coaching, thus can have wider span of control. On the other hand, the tasks that are inherently complicated; loosely defined and require frequent decision making would require narrow span of control.
  3. Experience level: When the average job related experience of employees is high, they require little training or direction, the tasks can be easily delegated. Under such situations, span of control of managers can be increased.
  4. Budget Constraints: When an organization is facing financial hardship or is downsizing, it needs to increase the span of control. On the contrary, when an organization gets more investment, it tends to reduce the span and inflate it’s management.

Methods to maximize the span-of-control

  1. Information technology:  Use of efficient communication tools like online wiki’s, videos, project management and tracking tools, and other decision support systems can reduce the overall relationship complexity, thereby encouraging managers to supervise more subordinates.
  2. More training: Investing in training the employees for the current job skills and also future skills makes them more independent. Constantly involving the employees in various trainings not only increases the collective intelligence within the organization but also results in readily available resource pool in-house.
  3. Work design: If the tasks are designed to be independent, loosely coupled with few interdependencies and probable conflicts, the relationship complexity can be reduced.

Controlling the size

  1. Identify and correct units with unbalanced/skewed ratios between supervisors and subordinates.
  2. Watch for narrowing of span of control over period of time, take corrective actions that might include restructuring, trainings or downsizing.

 

 

Comments (33)
  • pat
    how do i refrence this article?
  • Anonymous
    how do i refrence this article
  • Andre Champagne  - Computing the average span of control of an organi
    Great article thanks.

    Many managers in an organization have no direct reports. Their type of work
    requires that they have the correct title: product managers, project managers,
    business development managers...Thus such an orgnization may be perceived as
    being top-heavy. Do these managers, count when computing the organization's
    average span of control? How about working managers? Can we compute them based
    on their % time managing versus % of time doing non-management tasks?

    Thanks for your help.
  • olaa nelson
    it so amazing to have all ineed from this side thanks alot
  • Liz Lawson  - Question
    Very informative and interesting information. In your size and structural
    paradox table I believe the first column (hieracrchy 2) should match the min
    numbers in the total column of the chart above it?? If that is not correct
    please describe how you arrived at those figures. Thanks.
  • Anna Kabuje  - relationship between managers and subordinate
    send more research papers/dessertation
  • Bryan  - More details?
    Great information



    Do you have or can you recommend additional details, white papers or actual
    industry data (not fee-based)?



    I am working on an OD project.



    Thanks!
  • girma dadi
    :roll: problem of organisation
  • Sylwia
    Hi

    I've been recently wondering what "n" stands for (what's the etymology)
    in the span of control table - can you advise please?

    It's a pretty urgent (and probably a bit weird question) ;-). Would be grateful
    for an prompt reply.

    Thanks.

  • Ashim Gupta  - N=Span of control
    N represents the span-of-control, or number of direct subordinate a manager has.
  • islam
    can you send me tools for measuring span of control please it is needed
    urgently


    thhhhhhhhhhhhhhhhhhhhank you :?:







  • gerjan01  - size matters
    there seems to be a maximum / optimum for the total number of employees:
    somewhere between 150-250. when organisations get bigger inefficiency and lack
    of cohesion grows. any empirical data available? there are no psychological
    variables quantified in your model
  • Bel  - Average Span of Control
    Hi,



    My boss and I are tryin to figure out what is the definition for Average SOC?
    Can you please help? What is the formula for avg soc?



    Thanks,

    Maribel
  • Olaf  - A question relating span of control
    Hi,

    I (from Germany) have an important question. I have found a formula for changing
    the burden of leadership change at the span of control on the Internet, but not
    a scientific source. Can anyone help, why is the formula?

    (EMPLOYEESnew / EMPLOYEESold) ×
    log(EMPLOYEESnew) / log(EMPLOYEESold)


    Thank you!

    Olaf
  • Ashim Gupta  - Strange formula
    Hi Olaf, It's not clear in what context this is formulated but it seems to
    suggest that leaders performance is lesser impacted with addition of more
    employees. This is rather contradictory to span-of-control. It might be more
    suited to say that a beyond a certain threshold, a leaders ineffectiveness is
    not reduced proportionately to % increase in employees.
  • marcin from Poland  - please for help
    Hi,
    I really like your article if you have the possibility of making available a
    wider range of Teman span of control. explore how your organization? to match

    • The formal range of management, the number of people (subordinates, cells)
    formally subordinated directly to one manager.
    • The actual driving range, a number of people (subordinates) of cells actually
    directly subordinated to one manager.
    • The potential range of management, the number of people (subordinates, cells),
    which in the circumstances can be effectively addressed directly to a supervisor

    I am a student of the Universities Gańskego in Poland and writes a thesis on
    this topic

    very please help

    my mail: marcin.murawski7 @ gmail.com

    Słuchaj
    Tłumaczenie (polski > angielski)


    below gave the title of the publication of which could also be looking at this
    point someone can help

    Author(s): Zhang J (Zhang, Jian)1, Zeng JQ (Zeng, Jianqiu)1
    Beijing Univ Posts & Telecommun, Sch Econ & Management, Beijing 100088, Peoples
    R China
    The Best Span Range of Control for an Efficient Organization Structure A Model
    Based on the Efficiency Analysis of Information Processing
  • Ashim Gupta  - References
    Please checkout the list of good papers on span of control under
    references->organization dev. A lot of information on organization size can be
    found in textbooks & research papers but little on span-on-control
  • Gordon
    I found this article interesting. Do you have any info or insights into how to
    guage span of control when dealing with indirect and unofficial management
    positions? As an example, folks in trainer positions.
  • Ashim Gupta  - Measure relationships
    To evaluate span-of-control, it is important to understand what kind of
    relationships exists in the subsystem that is being observed. In situations
    where the link between manager and subordinate is less interactive and more
    directive, the span of control can be larger provided there is adequate process
    to evaluate subordinates performance and guide him at various stages.
  • tumbo
    The article is one stop shop for all students interested in organizational size
    and its influence on employee perfomance
  • Sue  - Risks Associated with Span of Control
    Has any research been done to identify the risks to an organization with too
    broad a span of control?
  • Ashim Gupta  - It's influence on structure & culture
    I am not aware of any specific research that directly links span-of-control to
    risks. However, it definately influences both the structure & culture which if
    not aligned with the organizational goals can lead to it's decline.
  • Pammy  - Chain store
    What kind of structure, control and culture would you find in a chain store?
  • Ashim Gupta  - Chain Store-network, horizontal & marker
    In brief, a chain store has a horizontal dimension, it's network structure due
    to autonomous & geographically diverse locations. It has a primary focus on
    customer and market, encourages culture of teamwork, lot of symbolism and
    artifacts. Please refer to related articles on the subject.
  • Katherine Graham  - Conflict levels
    This is a very interesting article - clear and thoughtprovoking. What would you
    say is the impact of organisational size and complexity on levels of workplace
    conflict and the need for ADR? I'd be very interested in your views on this.
  • Ashim Gupta  - 'Alternative Dispute Resolution' in organization
    This is indeed very interesting suggestion and requires some analysis. Based on
    Graicunas types of relationships, a dispute can occur between manager-employee,
    employee-employee (peers) or teams. The ADR can involve direct negotiations
    between the stakeholders or third party mediation. The first problem is
    acknowledging that the issue exist, often the employee does not initate a
    discussion since it requires jumping through the hierarchy, on which he has
    little visibility. Manager's boss, HR personnels all are good candidates for
    mediation or negoatiation but employee may not have enough confidence. The other
    impact is on organizational culture, how do other indiviudals percieve this
    conflict and learn what is acceptable and unacceptable. Management might
    perceive resolution of conflict as weakening of authority and thereby control
    and might be biased for a solution that favors them. Also it depends upon the
    external environment like opportunities outside vs resolution. An older public
    sector employee might choose ADR since the long term employment benefit
    overweighs job termination, while a young employee in emerging technology might
    choose to seek opportunity outside. Conflicts can create mistrust, dislike,
    aversion and long-term tension between the relationships, even when they are
    resolved through ADR. Hence, the organization's characteristics determine
    whether ADR as a process can provide a mutually beneficial solution or not.
  • Richard Miiro  - Organization size in relation to a membership orga
    Great article. However, I wanted to know how would you explain the size of a
    membership organization? Would you indicate size here in relationship to the
    staff members, or in relationship to its members?



    Thank you
  • Ashim Gupta  - Members are customers
    Membership organization provides services to its members, therefore the members
    should be viewed as customers and not as resources. Thus the size would refer to
    the staff and would change in proportion to the members. -Ashim
  • SARAH OMET  - business organization
    how to communication in an organization effectively please send an article on
    this
  • syed zain ibrahim  - satisfied
    i am really satisfied with the material provided here.

    i'd like to take help from here in the future as well.
  • AUSTINE  - Mr.
    I REALLY ENJOY YOUR PROGAM PLS SEND THE DETAIL OF YOUR " PRACTICAL
    MANMAGEMENT" NOTES

    THANK YOU.

  • Ashim Gupta  - Thank You
    Hello Austine,
    Your comments are very encouraging, you can learn more about the vision in
    "About Us" section. It is a slow but continued effort to synthesize and
    articulate the knowledge in a form that can be applied and adopted easily. I
    hope that you would continue to read and provide feedback.
    Regards
    Ashim
Write comment
Your Contact Details:
Comment:
[b] [i] [u] [url] [quote] [code] [img]   
:D:):(:0:shock::confused:8):lol::x:P:oops::cry:
:evil::twisted::roll::wink::!::?::idea::arrow:
Security
Please input the anti-spam code that you can read in the image.