ORGANIZING TO OPTIMIZE MANAGERS’ SPAN OF CONTROL
Span of control, also known as span of management, is a human resource management term that refers to the number of subordinates a supervisor can effectively manage. It is a particularly important concept for business owners to understand. Span of control is widely taught in management schools and widely employed in large organizations like the military, government agencies, and educational institutions.
Yet few entrepreneurs know the term or are willing to admit any limit to the number of people they directly oversee. When a business owner’s span of control becomes too large, it can limit the growth of his or her company. Even the best managers tend to lose their effectiveness when they spend all their time managing people and their issues and are unable to focus on long-term plans and competitive positioning for the business as a whole.
Studies have shown that managers could not effectively control more than three to six people directly. These figures have been generally accepted as the “rule of thumb” for span of control. It is important to note that all managers experience a decrease in effectiveness as their span of control exceeds the optimal level. In other words, the limitations implied by span of control are not short-comings of certain individual managers but rather of managers in general. In addition, it is important to understand that span of control refers only to direct reports, rather than to an entire corporate hierarchy .
Even though a CEO may technically control hundreds of employees, his or her span of control would only include the department heads or functional managers who report to the CEO directly. When given enough levels of hierarchy, any manager can control any number of people – albeit indirectly. But when it comes to direct reports, the theory of span of control suggests entrepreneurs must respect managers’ inborn limits.
Entrepreneurs and small business owners are particularly susceptible to overextending their span of control. After all, many of these people have started a business from the ground up and are very wary of losing control over its operations. They thus choose to manage lots of people directly, rather than delegating tasks to middle managers, in an effort to continue being involved in key decisions as the business grows. But this strategy can backfire. Extending span of control beyond recommended limits engenders poor morale, and may cause loss of the agility and flexibility that give many entrepreneurial firms their edge.
Organizing Managers’ Span of Control
Establishing the optimal span of control for managers is one of the most important tasks in structuring organizations. Finding the optimal span involves balancing the relative advantages and disadvantages of retaining responsibility for decisions and delegating those decisions. In general, studies have shown that the larger the organization, the fewer people should report to the top person. Managers should also have fewer direct reports if those subordinates interact with each other frequently. In this situation, the supervisor ends up managing both his or her relationship with the subordinates and the subordinates’ relationships with one another.
Some other factors affecting the optimal span of control include whether workers perform tasks of a routine nature (which might permit a broader span of control) or of great variety and complexity (which might require a narrower span of control), and whether the overall business situation is stable (which would indicate a broader span) or dynamic (which would require a narrower span).
Other situations in which a broader span of control might be possible include when the manager delegates effectively: when there are staff assistants to screen interactions between the manager and subordinates; when subordinates are competent, well-trained and able to work independently; and when subordinates’ goals are well-aligned with those of other workers and the organization.
There are a number of advantages and disadvantages to different spans of control. A narrow span of control tend to give managers close control over operations and to facilitate fast communication between managers and employees. On the other hand, a narrow span of control can also create a situation where managers are too involved in their subordinates’ work, which can reduce innovation and morale among employees.
A wide span of control forces managers to develop clear goals and policies, delegate tasks effectively, and select and train employees carefully. Since employees get less supervision, they tend to take on more responsibility and have higher morale with a wide span of control. On the other hand, managers with a wide span of control might become overloaded with work, have trouble making decisions, and lose control over their subordinates.
With all of these factors, business owners might become overwhelmed with the task of finding the optimal span of control. Business owners who feel that they have too many direct reports and need to reduce their span of control, the solution may involve either hiring middle managers to take on a portion of the owner’s responsibilities; or reorganizing the reporting structure of the company. In either case, business owners must balance their capabilities and workload against the need to control costs. After all, reducing the entrepreneur’s span of control may involve the costs of paying additional salaries for new hires or training existing employees to take on supervisory responsibilities.
Despite the potential costs involved, adjusting span of control toward the optimal level can lead to vast improvements for businesses. There is the real possibility that paying attention to span of control could usher your business into a new era of rapid, sustained, profitable growth. You could even find running your business easier and more fun.
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