Span of Management

Introduction

The term management span’ is also known as ‘control span,” supervision span,’ and ‘authority span.’ It denotes the number of subordinates a manager must manage and control. It is a fundamental organisational principle. This approach is based on the relationship theory developed by V.A. Graicunas, a French management consultant. Graicunas studied the superior-subordinate relationship and devised a mathematical formula based on the geometric growth in management difficulties as the number of subordinates grows.

Graicunas’ Theory

Graicunas demonstrated mathematically that a manager and his subordinates have a multitude of direct, group, and cross-links. The number of these relationships grows in proportion to the number of subordinates. He stated that an executive with four subordinates must deal with I four direct single relationships, (ii) twelve cross relationships, and (iii) 28 group relationships, totaling forty-four relationships. He arrived at them using the following formula:

No. of direct relationships = n

No. of cross relationships  = n [n – 1]

No. of group relationships = n [2n-1– 1]

Total No. of relationships  = n [2n/2 + (n – 1) or n [2n- + n – 1]

Where n represents the number of subordinates.

The last formula reveals that possible relationships with a variable number of subordinates rise very rapidly, as shown in the following table:

Table 8.1: Possible Relationships with Variable Number of Subordinates

Though Graicunas provided mathematical formulae for determining the number of relationships, his approach has several flaws, including ignoring the importance of relationships, the frequency of relationships, and the factors determining the span. Furthermore, he excluded certain possible relationships, particularly cross-relationships. However, his theory indicates that an executive should think twice before expanding his span because increasing one subordinate will multiply relationships exponentially. According to Graicunas, an executive can effectively manage 222 relationships arising from six subordinates. He did not, however, list the factors that govern the duration of supervision in practice.

Impact of Span of Management

The number of people an executive supervises has a significant impact on the structure of the organisation. If the span is large, it indicates that the organisation requires fewer levels. The structure would most likely be flat and wide. Because more people report directly to the top executive, the possibility of communication breakdowns should be reduced. The building would be narrow and deep if the span were small. The organisation would have several layers. More individuals must communicate with the top manager via an intermediary layer of executives. Communication breakdowns and distortions would become more likely.

Wide Span of Supervision: The number of executives required to supervise workers decreases when supervision is extended. This will broaden the organisational structure. Because of the lower overhead expenses of monitoring, such a system would be less expensive. Because the number of levels is reduced, there will be improved communication and cooperation between workers and management. However, because one CEO cannot successfully supervise a large number of subordinates, the quality of performance is likely to degrade. He will not be able to dedicate enough attention to every subordinate.

Narrow Span of Supervision: When opposed to a flat structure, the narrow span of supervision will result in a tall structure and an increase in executive payroll. Another disadvantage is that the additional layers of supervision will make communication from the CEO down to operative employees and back up the line more difficult. Because there will be more tiers of executives, there will also be an issue with effective coordination of the actions of different people in the organisation. However, the limited span of supervision offers the advantage of improving personal interaction between supervisors and subordinates. It makes tight control and close supervision possible. A tall organisational structure allows an executive enough time to form relationships with subordinates.

In recent years, there has been debate over the importance of the concept of span of control. The shift in decision-making style has unavoidably impacted the question of how many people a CEO can supervise. Furthermore, delegation and decentralisation are popular these days. It is recognised that a limited span of authority is an effective technique for forcing CEOs to delegate.

It is also believed that if an executive has a large enough subordinate base to supervise. Furthermore, delegation and decentralisation are popular these days. It is recognised that a limited span of authority is an effective technique for forcing CEOs to delegate. It is also suggested that close control becomes impossible once an executive has a sufficient number of employees to manage. The primary question is how this point should be determined.

• Factors Determining Span of Management

The range of control varies from person to person, time to time, and location to location. The following are the factors that influence the breadth of control:

1. Ability of Managers: Individuals differ in numerous skills, such as leadership, decision-making, and communication. If a manager possesses these talents to a greater extent than others, the duration may be extended.
2. Time available for Supervision: Because top managers have less time for supervision, the span should be narrower at higher levels. They must spend most of their time planning, organising, directing, and controlling. Each top manager will delegate supervision to his subordinates, who will have to devote comparatively less time to management functions.
3. Nature of Work: As the spans narrow, the levels in the organisation rise. Authority and responsibility must be delegated. If the labour is normal and repetitive, it is simple to delegate to subordinates.
4. Subordinate Capability: If subordinates are skilful, efficient, and knowledgeable, they will require less supervision. In this instance, the superior may opt for a longer span.
5. Degree of Decentralization: Decentralization devolved decision-making authority to lower levels. The management span will be narrowed to exercise more control in such instances.
6. Effectiveness of Communication: An effective communication system in the organisation favours many levels because transmitting information will be effortless despite many intermediate layers.
7. Control Mechanism: The control mechanism used also affects the span of control. Control can be implemented through either human monitoring or reporting. The former prefers a small spread, whereas the latter prefers a wide span.

To summarise, an executive should be expected to manage a suitable number of subordinates. What is acceptable is determined by several elements, including executive differences, the number and capacity of subordinates, the nature of the task, time availability, ease of communication, internal checks and controls, and the degree of delegation in the organisation. If the range of control is limited, there will be more organisational layers, which may obstruct communication. The supervisory load may become excessively heavy if the number of levels is lowered but the breadth of control is expanded. A healthy balance of supervisory load and organisational levels is required for good management.

Centralization and Decentralization

Centralisation is the process by which an organization’s activities, particularly those involving decision-making, become concentrated inside a certain place and/or group.

Decentralisation is an extension of the concept of delegation and cannot occur without delegation of authority. Decentralisation is delegating considerable authority and making more decisions at lower levels. It offers managers at all levels below the top more responsibilities.

According to Fayol, “anything that increases the subordinate’s function is decentralisation, everything that decreases it is centralisation.”

Centralisation

We define centralisation as the concentration of formal authority at the highest levels of a commercial organisation. It is a centralised performance tendency, the polar opposite of dispersal and delegation of authority. Centralisation has a significant impact on policy formulation and decision-making processes.

In a centralised organisation, the top management is responsible for the two key areas of management or administration. As a result, the lower levels of the organisational structure must seek guidance, advice, clarification, interpretation, and so on.

Under centralization, even the parent organization’s agencies lack decision-making capacity and are thus entirely reliant on the central authority. The agencies must carry out the decisions by the pre-determined rules handed down by the headquarters acting as the central authority.

When an organisation functions from a single location, i.e., when it does not have any field agents, centralisation takes on an intense form.

According to Harold Koont, the term “centralisation” has been used to denote tendencies other than the distribution of authority. It frequently refers to departmental activities, service divisions, and centralised comparable or specialised functions within a single department. However, when discussing centralisation as a component of management, it relates to delegating or withholding authority, as well as authority dispersal or concentration in decision-making. As a result, centralisation can be defined as the concentration of physical resources and/or decision-making authority.

Decentralisation

Individuals or groups interpret the term decentralisation differently. According to Louis A. Allen, it is one of the most perplexing administrative procedures characterising the art and science of professional management. “In some ways, decentralisation has become a ‘gospel’ of management,” write Pfeiffer and Sherwood.

First, it is regarded as a way of life to be adopted at least partially on faith; second, it is an idealistic concept with ethical roots in democracy; and third, it is a more difficult way of life to begin with because it involves a change in behaviour that runs counter to mankind’s historically rooted cultural patterns.

That is why the new decentralisation literature focuses on transforming organisational behaviour. Men struggle to delegate, think in terms of abstractions required for long-term planning, listen rather than give instructions, and judge other men and their work in terms of overall results rather than irritations and tensions of the present. However, this is critical to the behaviour expected of leaders in a decentralised organisation.

It is abundantly obvious that decentralisation is a democratic means of devolving political authority and a device for delegating or spreading administrative authority. Furthermore, democratic rules must be followed in a decentralised organisation. Such rules assist the various levels of the administrative organisation in developing a reasonable capability for exercising authority to obtain the most desired decisions. Furthermore, they aid in instilling in them the benefits of increased interactions across the various organisational levels and between the organisation and its clients in the broader public.

According to some, decentralisation relates to the physical location of facilities and the amount to which authority is distributed throughout an organisation. As a result, it is an arrangement in which ultimate command authority and ultimate accountability for results are decentralised in units distributed throughout the country. It is argued that the essence of decentralisation is delegating functions and responsibility for their efficient and effective performance to subordinates or sub-divisions.

In a decentralised organisation, lower levels are allowed to make most decisions, and only a few cases involving major policies or interpretations are sent to higher levels. Decentralisation applies to the political, legal, and administrative domains of power.

For example, each Tesco shop has a store manager who can decide their location. A regional manager reports to the store manager.

• Centralised and Decentralised Organisations

Organizational centralisation and decentralisation must be complementary, as a balanced combination results in stability, accountability, efficiency, and effectiveness. For an organisation to exist, it must perform certain activities that are essentially centralising in nature and impact. Furthermore, they must perform from a central point of authority. Initiation and decision-making are two significant core management functions: planning, organising, motivating, coordinating, and controlling the work of subordinates and field units. As a result, the upper levels prefer to reserve genuine authority at the core points of the organisation by executing the functions of initiation and decision-making. Earnest Dale, on the other hand, observes that the degree of decentralisation is more significant under the following situations:

1. The degree of decentralisation increases as the number of decisions taken at lower levels of the management hierarchy increases.
2. The greater the degree of decentralisation, the more crucial the decisions taken at lower levels of management. For instance, the head of the field unit can approve financial investments or expenditures without contacting anybody else.
3. In a decentralised authority structure, more choices are made at lower levels, affecting most of the organization’s functions. As a result, organisations that allow just operational decisions to be made at separate branch units are less decentralised than those that allow financial and personnel decisions to be made at branch units.
4. When the decision requires less scrutiny, decentralisation is greater when there is no check at all; it is less when superiors must be told of the decision after it has been made, and it is even less when superiors must be contacted before the decision is made. The degree of decentralisation is greater when fewer people are consulted, and they are at a lower level in the organization’s hierarchy.

As a result, it is evident that other aspects heavily influence the application of the two principles.

In modern times, with a plethora of administrative and political organisations, both centralised and decentralised patterns of authority must be used to the greatest extent possible for the benefit of the people.

Example: Accounting and purchasing functions may be centralised to save money. Tasks such as recruitment may be decentralised since units located away from the headquarters may have unique staffing requirements.

That is a requirement for a welfare or service state. There is a growing popular sentiment in favour of decentralisation, but for obvious reasons, some political groups and the bureaucracy oppose a decentralised system. “Decentralisation will always face a level of pandemic conflict between those who aim to coordinate and those who resist coordination,” Pfeiffer and Sherwood write. It is required to learn a way of life in which the coordinating process is least restrictive, in which people can follow their aims to the most entire while working in harmony toward communal goals with others who see things differently.”

Certain organisations use vertical decentralisation, which implies delegating decision-making authority down their organization’s structure. Vertical decentralisation enhances the influence that persons at the bottom of the organizational chart have in decision-making.

Horizontal decentralisation distributes responsibility throughout the organisation. Adopting new technologies throughout the organisation is a good illustration of this. This execution will be solely the responsibility of technology experts.