Span of control is a business term that refers to the number of employees who report to a manager or supervisor. The span of control idea was developed during the 1920s, with Sir Ian Hamilton asserting that managers were limited in their “span of attention”, and therefore limited in their managerial span of control.
Span of control theory describes an organizational structure of a manager, direct reports, and indirect reports. The manger supervises direct report employees, and reports to an executive. The manager’s direct reports supervise the indirect report employees. Span of control theory developed in organizations with a well-defined chain of command.
It is generally accepted that three to six direct report employees are the optimum number within any one manager’s span of control. It is argued that if each of the manager’s direct reports had the same number of indirect reports within his span of control, then the manager would be directly, or indirectly, supervising 42 employees. Most businesses with a defined chain of command continued to develop formal reporting relationships limiting span of control by increasing the number of middle managers and executives. The idea that productivity of lower level employees would be increased if the decision-making communication between executives and line workers was optimized, kept companies growing the middle management to hold down the span of control numbers.
As technology and communication methods improved, many companies reconsidered their span of control theory. Businesses restructured, trimming costs by reducing middle management, arguing that new technology allowed increased numbers of direct reports. This increased the span of control burden on executives and overloaded executives with minor decisions, severely impacting the organization’s ability to perform its primary mission. Businesses responded by restructuring again, investing the line workers with more direct authority, authorizing supervisors and workers to make decisions that were traditionally the responsibility of managers. Computers with business and information technology programs were implemented to further improve communication and decision making within the organizations.
Span of control is still a major issue in today’s businesses, however. Lean business structures have increased the number of direct and indirect reports under a single manager. More and more of the decision making is occurring at the supervisor and line employee level. This can cause confusion and inconsistencies in operation of the business. To deal with this problem, firms need to have clear, well-written policies and procedures to help line employees and supervisors make decisions consistent with the company’s strategic objectives and mission.