SPAN OF COMMAND, CENTRALIZATION VS
DE-CENTRALIZATION AND LINE VS STAFF AUTHORITY
Methods of Vertical Coordination
is the linking of activities at the top of the
organization with those at the middle and
lower levels in order to achieve organizational goals.
is the degree to which written policies,
rules, procedures, job descriptions, and other
documents specify what actions are (or are not) to be taken under a
given set of circumstances.
1. Most organizations need some degree of formalization so that
decisions do not have to be made more than once and so that inequities
less likely to occur.
2. Being too highly formalized can lead to cumbersome operations,
reacting to change, and low levels of creativity and innovation.
Span of management or
span of control
is the number of subordinates who report
directly to a specific
1. Managers should have neither too many nor too few subordinates.
2. Research indicates that there is no universally correct span of
management for all
managers. Rather, spans of management can be narrower or broader
the circumstances of each managerial job.
a. Subordinates’ work is such that little interaction with others is
b. Managers and/or their subordinates are highly competent.
c. The work of subordinates is similar.
d. Problems are infrequent.
e. Subordinates are located within close physical proximity of one
f. Managers have few non supervisory duties to perform.
g. Managers have additional help such as secretaries or assistants.
h. The work is challenging enough to motivate subordinates to do a good
Spans of management determine the number of hierarchical levels in an
is one that has narrow spans of management and
hierarchical levels in an organization.
b. A flat structure
is one that has broader spans of management and few
hierarchical levels and wide spans of control.
The number of hierarchical levels in an organization affects
a. Very tall organizations raise administrative overhead, slow
and decision making, make it more difficult to pinpoint responsibility
various tasks, and encourage the formation of dull, routine jobs.
is the process of significantly reducing the layers
management, expanding the spans of control, and shrinking the size of
the work force.
is the process of making a major change in
structure that often involves reducing management levels and also
possibly changing some major components of the organization through
divestiture and/or acquisition.
d. Downsizing must be planned and implemented carefully.
1) Done well, downsizing may result in reduced costs, faster
decision making, more challenging jobs, fewer redundancies, and
2) Done poorly, downsizing may result in the loss of valuable
employees, demoralized survivors, and an ultimate decline in
3) A five-year study showed only increases in
productivity in a relatively small number of firms that downsized
while most had noticeable decreased in morale.
The degree to which authority in an organization is centralized or
decentralized affects the pattern of
decision making in the organization.
is the extent to which power and authority are
retained at the top
is the extent to which power and authority are
3. An organization is centralized if decisions made at lower levels are
governed by a
restrictive set of policies, procedures, and rules, and if situations
covered are referred to higher levels for resolution.
4. An organization is decentralized to the extent that decisions made at
are made within a general set of policies, procedures, and rules, with
covered left to the discretion of lower-level managers.
5. Centralization offers advantages.
a. It is easier to coordinate the activities of various units and
b. Top managers have more experience and may therefore make better
c. Top managers have a broader perspective on decision situations.
d. Duplication of effort by various organizational units can be avoided.
e. Strong leadership is promoted.
6. Decentralization offers advantages.
a. Top managers can concentrate upon major issues.
b. The jobs of lower-level employees are enriched by the challenge of
c. Decisions can be made faster.
d. Individuals at lower levels may be closer to the problem and may be
better position to make good decisions.
e. Relatively independent units emerge as divisions, with more easily
7. Organizations should move toward a decentralized structure when:
a. The organization is so large that top managers do not have the time
the knowledge to make all the major decisions.
b. Operations are geographically dispersed.
c. Top managers cannot keep up with complex technology.
d. The environment is increasingly uncertain.
The configuration of line and staff positions can affect the vertical
integration in organizations.
1. A line position
is a position that has authority and responsibility
for achieving the
major goals of the organization.
2. A staff position
is a position whose primary purpose is providing
expertise and assistance to line positions.
3. Line authority differs from staff authority.
a. Line authority
is authority that follows the chain of command
established by the formal hierarchy.
b. Staff departments have functional
authority, authority over others in the
organization in matters related directly to the staff departments’
c. Conflicts of line and functional authority.
1) Staff personnel may usurp line authority.
2) Line personnel may abdicate responsibility of staff departments.
3) Conflicts may be avoided by clarifying lines of authority and
encouraging team work.
d. Recently a trend had developed to reduce the number of
staff positions in cost cutting moves.
Promoting Innovation: Methods of Horizontal coordination
is the linking of activities across
departments at similar levels.
1. The need for horizontal coordination in an organization is directly
the information-processing needs of the organization.
2. Organizations need to process more information under certain
a. The organization faces complex and/or changing technology.
b. The environment is uncertain.
c. The company is growing.
3. In facilitating information processing across the organization,
coordination also promotes innovation.
a. New ideas are more likely to emerge when views are shared.
b. Awareness of problems and opportunities across areas may spark
c. Involving employees in the development of ideas promotes commitment
to proposed changes.
is a manager who is given the tasks of
coordinating related work that involves
several functional departments.
1) Project managers usually are responsible for coordinating the
work associated with a particular project until its completion.
2) Product managers orchestrate the launching of new products and
services and may then continue coordinating interdepartmental
work related to the new products and services.
3) Brand manager coordinate organizational efforts involving
particular brand-name products, most often within the soap,
food, and toiletries industries.
Managerial integrators do not have the line authority and must gain the
cooperation of staff mangers to
implement their proposals.