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ORGANISATION LEVELS AND SPAN OF MANAGEMENT

Organisation levels exist because there is a limit to the number of persons a manager can supervise effectively. Structure can be defined as the established pattern or relationship among components of parts of organisation Organisation structure means grouping people into departments or sections and allocating responsibility and authority. Structure involves the ways in which the tasks of the organisation are divided (differentiation) and co-ordinate (integration) 1. Differentiation consists of vertical - establishing a hierarchy and horizontal setting up various departments. 2. Integration consists of both coordination and control The combination of span of control and scalar chain determine the overall pyramid shape of the organisation structure and whether the hierarchical structure is tall or flat Tall Structure
Flat Structure

Many hierarchical Levels

Few levels

SPAN OF CONTROL The Span of Control or Span of Management refers to the number of employees (subordinates) that can be supervised effectively by one manager. Scalar chain refers to the number of different levels in the structure NARROW SPANS OF CONTROL This is where one superior is in charge of few people and the organisation structure tends to be longer. FEATURES OF NARROW SPAN OF CONTROL 1. Few people report to one manager 2. There are generally many levels of authority 3. High degree of distortion of information 4. Information may lack urgency 5. Very easy to delegate work Advantages o o Close supervision Close control 1

o Advantages 1. 2. 3. 4.

Fast communication between superior and subordinates

Superior tends to get too involved in subordinates work. High costs due to many levels Undue delays because information has to be carried through several levels Excessive distance between bottom and top levels.

WIDE/BROAD SPANS OF CONTROL This is where one superior is in charge of several subordinates and organisation structure tends to be wide. It is generally referred to as flat span of management FEATURES OF BROAD SPAN OF MANAGEMENT 1. 2. 3. 4. 5. Several people report to one manager Practical in large organisations There is low degree of distortion of information Decision-making is slow as many people may be involved There is no or little delegation

Advantages Supervisors are forced to delegate Clear policies must be made Subordinates must carefully be selected Disadvantages Tendency of overloaded superior to become decision bottlenecks Danger of superiors loss of control Requires exception quality of managers FACTORS DETERMINING EFFECTIVE SPAN OF CONTROL 1. 2. 3. 4. 5. 6. 7. Nature of work Type of personnel Subordinate training Clarity of delegation of authority Clarity of plans Rate of change Management style Autocratic - narrow Democratic - wide Laissez faire - wide 8. Amount of personnel contact 2

SPAN OF CONTROL HISTORY Various classical theorists suggested a definite figure of the span of control Name of Writer 1 2 3 4 Henry Fayor L.F. Hrwick E.F.L. Brech other Writers Span of Control 6 Not more than 6 and not less than 5 Single digit/ reasonable Between 3 and 6

NB The decisions taken about the structure of the organisation have a material effect on performance. The organisation structure must have a good fit with the organisations strategy. Classical writer looked at structured in terms of division of work, chain of command, span of control and reporting relationships. Probably the leading authority was Lyndall Urwick who suggested the following management principles: 1. Scalar Concept A hierarchy of clearly defined posts, authority being delegated from the top to the bottom with corresponding defined responsibilities and common channels 2. Unity of Command An office holder receiving orders from one hierarchical superior 3. Exception Principle Delegation to be maximized with decision being taken at the lowest level possible 4. Span of Control Concept An optimum number of subordinates for each hierarchical superior 5. Scientific Method In arriving at decision scientific techniques should be employed 6. Specialization Definition of management activities to be based on specialized criteria 7. Principle of the Objective Every part of the organisation to be needed for the purpose of the organisation 8. Principle of Correspondence In every position authority and responsibility should correspond OTHER CLASSIFICATION OF STRUCTURE The type of structure chosen depends on 3

a) The degree of specialization within the organisation b) The number of levels of authority deemed desirable c) The grouping of functions or tasks is referred to as departmentalization and main methods are described below: 1. The Small Business Structure Reflects the position of the owner manager who makes all decisions 2. Functional Structure A functional organizational structure is the most widely used. The three categories that occur in most enterprises are production, selling and finance. Advantages i. Employees work can be much more effectively controlled and coordinated ii. Specialized department can provide clear promotional and staff development. 3. Product Structure A product oriented organisation structure has a variety of specialists grouped in a department that focuses on a product or product range. Advantages: i. The focus attention is on product performance and profitability. ii. It encourages growth and diversity of products iii. The role of general manager is encouraged with less concentration upon specialization Disadvantages i. It is difficult to maintain centralization of services such as accounting and R & D economically ii. Success id dependent on the ability of people in charge of product 4. Geographical Structure A geographical organisation structure divides the enterprise into regions or countries. Advantages i. The organisation can identify and respond quickly to local opportunities ii. Responsibility for each region can be clearly assigned and delegation is encouraged. iii. Identity with the local community can often provide opportunities not available to a periodic visiting salesperson 5. Matrix Organisation Structure This is the one in which work teams are organized to complete a specific project and a project manager with authority and responsibility is identified 4

This organisation structure is used successfully in research firm advertising agencies and construction companies Advantages i. It provides flexibility and allow rapid change hence easy to achieve organizational objectives ii. The specific skills of managers and employees can be used effectively iii. Communication barriers are reduced and separate divisions of the business work well together. iv. It is leads to specialization i.e. individual concentration of workers on limited areas hence high output Disadvantages i. It leads to unemployment once the project is completed ii. Employees have limited skills since they are allowed to concentrate in areas that they can do better iii. Authority and responsibility need to be defined if not will result into problem of unit of command iv. It leads to demotivation since there is no delegation

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