Defining Optimal Span of Control for an Enterprise

AbstractThe paper uses the empirical approach to propose a method of defining optimal span of control for an enterprise, and leads to a conclusion, that efficiency of organizational function performance within company management can be estimated with the use of span of control criteria. In our opinion, maximum span of control is the result of multiplying two independent variables: company individual managing index (kind index) by index that estimates how many managers control single operation independently (kim index). So a company should try to maximize span of control while at the same time minimizing the number of managers. Definition of these independent variables implies identification of the number of managers who manage one operation independently (for instance, kind for matrix organizational structure would be 2). The second independent variable is proposed to be defined on the basis of estimation of company primary leader's type, coincidence of formal and informal leadership, employee participation in decision-making, correlation by employees their own results with the company results, predictability of environment, level of disturbance in organizational communications, coincidence of job to the types of employee personality. The said approach allows to reveal if organizational function is misperformed in case span of control seems to be low in comparison to other companies of the same size and complexity of environment