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    Organization's size and span of control PDF
    (270 votes, average 3.24 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 (49)
    • Edmundo Bedore  - Organization's size and span of control
      thank you FOR Sharing! And I do appreciate Your tme and effort put in here to
      write a post like this.



      https://amigoreviews.com/category/video-marketing/
    • Rahul Desai  - Best Project Management Software
      Thanks for the Article. Every Organization needs project management software and
      I have found the
      best project management software for any business after looking at its features
      and advnatages.
    • daniel  - greating
      HELLO THAT IS HELPFULL.
    • power rangers  - thanks
      muah :oops:
    • Moha

      Dear sirs,

      Interesting article.

      Thank you.
    • musawenkosi  - mr
      I WOULD LIKE TO KNOW THE RELASHIONSHIP BETWEEN SPAN OF MANAGEMENT AND THE NUMBER
      OF ORGANISATION LEVELS AND ALSO THE NEGIVE EFFECT OF TOO WIDE OR TOO NARROW SPAN
    • Avery Stolebarger  - Organization's size and span of control
      TravelEzine.EU – For and by travellers



      http://www.yV9iAthEH5.com/yV9iAthEH5
    • Nikiwe  - Ms
      Hi

      Can you please help me
      I would like to know the span of control of raw material manager in Line
      structure
    • christiana  - Information provided here is very insightful.
      Please furnish me with measuring instrument scales or questionnaires on
      organisational size.
      Thanks.
    • christiana
      This study is very helpful.
    • christiana
      please help with measuring instrument scale on organisational size.
    • Ariane Marlor  - Organization's size and span of control
      Thanks!



      www.airindia.in
    • Siva  - Tool for Span Of Control Modeling
      I am interested in tool for span of control modeling. Is there one ?
    • Fortunate mhlanga  - organisational control
      hello your article has succeeded in answering all my questions, it would be much
      pleasure to use it again in the future


      very much appreciated

      thank you
    • sofi rafiq
      This is a good site for those who want to learn management cncepts all the best
      to all
    • Sam  - Share the exact question
      I have the exact same question as this. Any feedback or guidance?
    • pat
      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

      S?uchaj
      T?umaczenie (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
    • Haritha  - Span of control
      Hi Team,

      Please suggest, what is the ideal span of control ration in a mid size ITES
      organization.

      Regards,
      Haritha
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