1. Define the span of control. What factors determine the appropriate span of control?
Span of control refers to the number of subordinates that are controlled by a manager, i.e. the number of people who are directly accountable to a manager. Hence, the higher up a person is in a hierarchy, the wider their span of control tends to be. Although the CEO of a company is directly responsible for the Board of Directors, he or she is also indirectly in charge of all workers in the organization. Hence, the CEO’s direct span of control is narrow, but the indirect span of control is very wide.
There is no consensus on the optimal span of control. In essence, the decision is judgemental. The degree of control granted to a manager will depend on several factors, which collectively should help to determine the optimal span of control for an organization. The factors include: • Experience, competence and traits of the manager – Clearly, the more skilled and experienced the manager, the higher the chances are that they will have a wider span of control. By contrast, junior managers will only have a narrow span of control. • The nature of management styles – Narrower spans of control may be required where management feel a need to tightly control their subordinates. By contrast, democratic managers tend to delegate and empower their subordinates, thereby reducing the need for a narrow span of control. Such managers prefer the term ‘span of support’ to span of control. • The skills and dynamics of subordinates – Highly skilled workers are more likely to work in smaller teams with their line manager having a relatively narrower span of control, especially when dealing with key decision-making. However, small teams may also operate when unskilled and / or lazy worker exist in the workplace and need to be monitored to prevent them from slacking off. Highly skilled staff may also operate independently for much of their work, in which case the span of control can then be quite wide. • The nature of the work – Complex and important tasks will tend to require a narrower span of control. Communication will be more important so it is probably more effective to have smaller teams where both accountability and responsibility can be clearly identified. By contrast, products that can be mass-produced easily or tasks that require highly skilled people mean that less supervision is needed. Hence, the span of control can be widened in such cases. • The type of production system used - For example, in flow production, a manager’s span of control can be very wide since workers have relatively simple tasks that can be completed with minimal supervision.
2. Discuss the major responsibilities of the board of directors of a firm. Explain the difference between outside and inside board members, as well as the role of an internal auditor.
The directors (sometimes called executives) are responsible for the overall running of the business. In a large firm, there is likely to be a director responsible for each key functional area of the business, eg. Marketing Director, Finance Director, HR Director and Operations Director. There are two main types of directors: • Executive directors or Inside board members: Work full-time at the organization and make decisions about the daily running of the business. • Non-executive directors or Outside board members: Do not work full-time at the organization but are consultants used for their particular area of expertise. They advise the Board of Directors on corporate strategy.
Duties of the board of directors are broad and varied, but will typically include: • Target setting • Devising long-term plans • Establishing organizational policies and codes of practice • Monitoring and controlling of the organization’s activities • Overseeing staffing issues, such as the recruitment, promotion, performance management and dismissal of workers • Advising and supporting the managing director
The role of an internal auditor is to make up the audit report. This document prepared by the auditors appointed to examine and certify the accounting records and financial position of a firm. It must be filed every year by an incorporated or registered firm (along with its audited financial statements) with the appropriate regulatory authority. Also called audit report.
3. What is decentralization? What are the advantages and disadvantages of decentralization?
In a decentralized structure, some decision-making authority and responsibility is passed onto others in the organization. For example, departments or regional offices may be empowered to make decisions on behalf of the organization. However, key decision-making power is still centralized, i.e. concentrated in the hands of the senior management. The advantages of decentralized structures include: • Input from workforce – Firms can benefit from the development and exploitation of the skills of employees, especially their middle managers. • Speedier day-to-day decision-making – Planning and execution become faster and more efficient since there is delegation of authority and responsibility • Higher morale – Empowered staff are more likely to feel motivated. Workers feel more valued since they have some input into decision-making. The autonomy also means that they can use their initiative and feel a sense of ownership for their work. Hence, their productivity is also likely to improve. • Improved accountability – Staff are held directly accountable for their input and this can lead to improvements in the quality of their work. • Encouragement of teamwork – A feature of decentralized structures is the presence of collaborative work across teams and departments. Hence, the sharing of ideas can generate innovative ideas as well as promoting harmonious relationships. The disadvantages of decentralized structures include: • Loss of control – By decentralizing decision-making, authority is diluted. This means that senior management have less direct control over the operations of the business. • Greater chance of mistakes – Decentralizing authority and responsibility will nly work if the empowered person is sufficiently competent. In addition, the more people who are involved in decision-making, the more likely it is that there will be conflicting opinions and this may lead to mistakes being made. With more decision-makers, it may become more difficult to track where mistakes were made or where things went wrong. • Greater reliance on effective communication – By decentralizing decision-making power, there is a greater need for efficient communications. This may require additional time and resources, thereby adding to the costs of the business. • Duplication of functions – In decentralized organizations, middle and junior managers may carry out duplicate functions as there is no overview of what everyone else is doing.
1. span of control refers to the number of subordinates controlled by a manager. Span of control insn't randomly chosen, it is determined by some factors. Such as the type of company, type of product and market, working style of the business, and the size of the business. These are some factors that influences wideness of span of control for a business.
2.Decentralization is basicly opposite of centralization, where decisions are made by few people on top. In decentralized business, authorities to make decision is spread out to employees. Some advantages of it are higher morale, faster daily decision making, development of employees, and improved accountability. Disadvantages are loss of control, greater chance of mistake, and not effective communication.
3. In departmentalization, there's five main methods for departmentalization. Firstly, there is functional departmentalization, which departments are seperated by functions like, marketing, HRM, etc. Second one is product departmentalization where departments are seperated by different product line. Next one is customer departmentalization which departments are seperated by different types of customer. And there is geographic departmentalization which divided departments by different location. Finally process departmentalization is when a business divide departments by different process such as product or service or customer flow.
1.Span of control is the length or the show of how much power, each person has, and the factors which affect the span of control is how the power balance of the firm is made, and also how the pyramid of power is made in this firm you are looking at into. 3.By decentralizing, it means to distribute the power in which the firm has, to be spread out more widely. By decentralizing the firm, the company is able to take short time at decision making, as the power is spread out widely amongst. By this, the firm is also able to catch on up with any problems which happen in the business. But then, this would allow for the top of the firm to lose some parts of its power, losing decision making power. 4.By departmetizing, there are several methods. Technology, Product, there are several ways in which it could departmentized, and these has its own advantages and disadvantages. One group departmentized, might go well, as the control of firm, and the production pase might increase, but looking from another point of view, the department structure could allow to rise problems. The problems could difficulty in decision making, disharmony, and etc.
1. Define the span of control. What factors determine the appropriate span of control?
ANS: Span of control is the number of subordinates managed by each manager. When an organizational structure is designed to have each manager supervise just a few subordinates, it has a narrow span of control. When it is designed to have each manager supervise numerous subordinates, it has a wide span of control. For a firm with numerous employees who perform similar tasks, a wide span of control is used, since each manager is capable of managing several employees under these conditions. However, for a firm with very diverse tasks, more managers with various skills may be needed to manage the different tasks, resulting in a narrow span of control.
2. Discuss the major responsibilities of the board of directors of a firm. Explain the difference between outside and inside board members, as well as the role of an internal auditor.
ANS: A major responsibility of the board is to monitor the performance of the president of the firm and other top managers. The board also has the authority to approve or disapprove key business proposals by a firm's managers, such as acquisitions or layoffs. In general, the board focuses only on key decisions and normally does not get involved in the day-to-day activities of the firm. Directors not only oversee the key decisions of managers, but they may also initiate changes in a firm. In many cases, the board becomes more involved after a period of poor performance by the firm. Board members who are also managers of the same firm (such as the CEO) are referred to as inside board members. Board members who are not employed by the firm in some other position are referred to as outside board members. The internal auditor ensures that employees are following the firm's guidelines and procedures. Typical actions the auditor would review include: recommended hiring procedures, evaluating employees, maintaining safety, and responding to customer complaints.
3. What is decentralization? What are the advantages and disadvantages of decentralization?
ANS: Decentralization occurs when decision-making authority is spread among several divisions or managers. A decentralized organizational structure can improve the firm's performance. It reduces operating expenses because salaries of some employees who are no longer needed are eliminated. It accelerates the decision-making process, as lower-level employees are assigned more power. It motivates some employees by assigning them more responsibilities, and it allows those employees who are closely involved in the production of a particular product to offer their input. The disadvantages of decentralization are that a decentralized organizational structure could force some managers to make major decisions even though they do not have sufficient experience. If middle and supervisory managers are assigned an excessive amount of responsibilities, they may be unable to complete all of their tasks.
4. What is the purpose of intrapreneurship? How does intrapreneurship differ from entrepreneurship?
ANS: Intrapreneurship occurs when a firm assigns specific employees the responsibility to create ideas and innovate, much as if they were entrepreneurs. Some employees may even be assigned the task of generating ideas for new products or the improvement of existing products. Intrapreneurs differ from entrepreneurs in that they are employees of a firm rather than owners of a firm.
5. Identify and explain the different methods of departmentalizing tasks.
ANS: The manner used to departmentalize tasks and responsibilities is dependent on the characteristics of the business. Many small firms departmentalize by function, assigning tasks and responsibilities according to employee functions. When firms departmentalize by function, they typically have separate divisions for production, finance and marketing. This system works well when the firm is engaged in the production of just one or a few products. For larger firms with many products, departmentalizing by product is common. Tasks and responsibilities are allocated according to the type of product produced. Many large firms departmentalize by both product and function. The specific divisions are separated by product and each product division is departmentalized by function. Another method of separating tasks and responsibilities is to departmentalize by location. This system may be appealing if corporate customers in particular locations frequently purchase a variety of the firm's products. Some firms have separated divisions according to the type of customer, and some large firms use more than one method to departmentalize tasks.
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Answers to review questions by Sophie Leysen
1. Define the span of control. What factors determine the appropriate span of control?
Span of control refers to the number of subordinates that are controlled by a manager, i.e. the number of people who are directly accountable to a manager. Hence, the higher up a person is in a hierarchy, the wider their span of control tends to be. Although the CEO of a company is directly responsible for the Board of Directors, he or she is also indirectly in charge of all workers in the organization. Hence, the CEO’s direct span of control is narrow, but the indirect span of control is very wide.
There is no consensus on the optimal span of control. In essence, the decision is judgemental. The degree of control granted to a manager will depend on several factors, which collectively should help to determine the optimal span of control for an organization. The factors include:
• Experience, competence and traits of the manager – Clearly, the more skilled and experienced the manager, the higher the chances are that they will have a wider span of control. By contrast, junior managers will only have a narrow span of control.
• The nature of management styles – Narrower spans of control may be required where management feel a need to tightly control their subordinates. By contrast, democratic managers tend to delegate and empower their subordinates, thereby reducing the need for a narrow span of control. Such managers prefer the term ‘span of support’ to span of control.
• The skills and dynamics of subordinates – Highly skilled workers are more likely to work in smaller teams with their line manager having a relatively narrower span of control, especially when dealing with key decision-making. However, small teams may also operate when unskilled and / or lazy worker exist in the workplace and need to be monitored to prevent them from slacking off. Highly skilled staff may also operate independently for much of their work, in which case the span of control can then be quite wide.
• The nature of the work – Complex and important tasks will tend to require a narrower span of control. Communication will be more important so it is probably more effective to have smaller teams where both accountability and responsibility can be clearly identified. By contrast, products that can be mass-produced easily or tasks that require highly skilled people mean that less supervision is needed. Hence, the span of control can be widened in such cases.
• The type of production system used - For example, in flow production, a manager’s span of control can be very wide since workers have relatively simple tasks that can be completed with minimal supervision.
2. Discuss the major responsibilities of the board of directors of a firm. Explain the difference between outside and inside board members, as well as the role of an internal auditor.
The directors (sometimes called executives) are responsible for the overall running of the business. In a large firm, there is likely to be a director responsible for each key functional area of the business, eg. Marketing Director, Finance Director, HR Director and Operations Director. There are two main types of directors:
• Executive directors or Inside board members: Work full-time at the organization and make decisions about the daily running of the business.
• Non-executive directors or Outside board members: Do not work full-time at the organization but are consultants used for their particular area of expertise. They advise the Board of Directors on corporate strategy.
Duties of the board of directors are broad and varied, but will typically include:
• Target setting
• Devising long-term plans
• Establishing organizational policies and codes of practice
• Monitoring and controlling of the organization’s activities
• Overseeing staffing issues, such as the recruitment, promotion, performance management and dismissal of workers
• Advising and supporting the managing director
The role of an internal auditor is to make up the audit report. This document prepared by the auditors appointed to examine and certify the accounting records and financial position of a firm. It must be filed every year by an incorporated or registered firm (along with its audited financial statements) with the appropriate regulatory authority. Also called audit report.
3. What is decentralization? What are the advantages and disadvantages of decentralization?
In a decentralized structure, some decision-making authority and responsibility is passed onto others in the organization. For example, departments or regional offices may be empowered to make decisions on behalf of the organization. However, key decision-making power is still centralized, i.e. concentrated in the hands of the senior management.
The advantages of decentralized structures include:
• Input from workforce – Firms can benefit from the development and exploitation of the skills of employees, especially their middle managers.
• Speedier day-to-day decision-making – Planning and execution become faster and more efficient since there is delegation of authority and responsibility
• Higher morale – Empowered staff are more likely to feel motivated. Workers feel more valued since they have some input into decision-making. The autonomy also means that they can use their initiative and feel a sense of ownership for their work. Hence, their productivity is also likely to improve.
• Improved accountability – Staff are held directly accountable for their input and this can lead to improvements in the quality of their work.
• Encouragement of teamwork – A feature of decentralized structures is the presence of collaborative work across teams and departments. Hence, the sharing of ideas can generate innovative ideas as well as promoting harmonious relationships.
The disadvantages of decentralized structures include:
• Loss of control – By decentralizing decision-making, authority is diluted. This means that senior management have less direct control over the operations of the business.
• Greater chance of mistakes – Decentralizing authority and responsibility will nly work if the empowered person is sufficiently competent. In addition, the more people who are involved in decision-making, the more likely it is that there will be conflicting opinions and this may lead to mistakes being made. With more decision-makers, it may become more difficult to track where mistakes were made or where things went wrong.
• Greater reliance on effective communication – By decentralizing decision-making power, there is a greater need for efficient communications. This may require additional time and resources, thereby adding to the costs of the business.
• Duplication of functions – In decentralized organizations, middle and junior managers may carry out duplicate functions as there is no overview of what everyone else is doing.
1. span of control refers to the number of subordinates controlled by a manager. Span of control insn't randomly chosen, it is determined by some factors. Such as the type of company, type of product and market, working style of the business, and the size of the business. These are some factors that influences wideness of span of control for a business.
2.Decentralization is basicly opposite of centralization, where decisions are made by few people on top. In decentralized business, authorities to make decision is spread out to employees. Some advantages of it are higher morale, faster daily decision making, development of employees, and improved accountability. Disadvantages are loss of control, greater chance of mistake, and not effective communication.
3. In departmentalization, there's five main methods for departmentalization. Firstly, there is functional departmentalization, which departments are seperated by functions like, marketing, HRM, etc. Second one is product departmentalization where departments are seperated by different product line. Next one is customer departmentalization which departments are seperated by different types of customer. And there is geographic departmentalization which divided departments by different location.
Finally process departmentalization is when a business divide departments by different process such as product or service or customer flow.
1.Span of control is the length or the show of how much power, each person has, and the factors which affect the span of control is how the power balance of the firm is made, and also how the pyramid of power is made in this firm you are looking at into.
3.By decentralizing, it means to distribute the power in which the firm has, to be spread out more widely. By decentralizing the firm, the company is able to take short time at decision making, as the power is spread out widely amongst. By this, the firm is also able to catch on up with any problems which happen in the business. But then, this would allow for the top of the firm to lose some parts of its power, losing decision making power.
4.By departmetizing, there are several methods. Technology, Product, there are several ways in which it could departmentized, and these has its own advantages and disadvantages. One group departmentized, might go well, as the control of firm, and the production pase might increase, but looking from another point of view, the department structure could allow to rise problems. The problems could difficulty in decision making, disharmony, and etc.
ANSWERS:
1. Define the span of control. What factors determine the appropriate span of control?
ANS:
Span of control is the number of subordinates managed by each manager. When an organizational structure is designed to have each manager supervise just a few subordinates, it has a narrow span of control. When it is designed to have each manager supervise numerous subordinates, it has a wide span of control. For a firm with numerous employees who perform similar tasks, a wide span of control is used, since each manager is capable of managing several employees under these conditions. However, for a firm with very diverse tasks, more managers with various skills may be needed to manage the different tasks, resulting in a narrow span of control.
2. Discuss the major responsibilities of the board of directors of a firm. Explain the difference between outside and inside board members, as well as the role of an internal auditor.
ANS:
A major responsibility of the board is to monitor the performance of the president of the firm and other top managers. The board also has the authority to approve or disapprove key business proposals by a firm's managers, such as acquisitions or layoffs. In general, the board focuses only on key decisions and normally does not get involved in the day-to-day activities of the firm. Directors not only oversee the key decisions of managers, but they may also initiate changes in a firm. In many cases, the board becomes more involved after a period of poor performance by the firm.
Board members who are also managers of the same firm (such as the CEO) are referred to as inside board members. Board members who are not employed by the firm in some other position are referred to as outside board members.
The internal auditor ensures that employees are following the firm's guidelines and procedures. Typical actions the auditor would review include: recommended hiring procedures, evaluating employees, maintaining safety, and responding to customer complaints.
3. What is decentralization? What are the advantages and disadvantages of decentralization?
ANS:
Decentralization occurs when decision-making authority is spread among several divisions or managers. A decentralized organizational structure can improve the firm's performance. It reduces operating expenses because salaries of some employees who are no longer needed are eliminated. It accelerates the decision-making process, as lower-level employees are assigned more power. It motivates some employees by assigning them more responsibilities, and it allows those employees who are closely involved in the production of a particular product to offer their input. The disadvantages of decentralization are that a decentralized organizational structure could force some managers to make major decisions even though they do not have sufficient experience. If middle and supervisory managers are assigned an excessive amount of responsibilities, they may be unable to complete all of their tasks.
4. What is the purpose of intrapreneurship? How does intrapreneurship differ from entrepreneurship?
ANS:
Intrapreneurship occurs when a firm assigns specific employees the responsibility to create ideas and innovate, much as if they were entrepreneurs. Some employees may even be assigned the task of generating ideas for new products or the improvement of existing products. Intrapreneurs differ from entrepreneurs in that they are employees of a firm rather than owners of a firm.
5. Identify and explain the different methods of departmentalizing tasks.
ANS:
The manner used to departmentalize tasks and responsibilities is dependent on the characteristics of the business. Many small firms departmentalize by function, assigning tasks and responsibilities according to employee functions. When firms departmentalize by function, they typically have separate divisions for production, finance and marketing. This system works well when the firm is engaged in the production of just one or a few products.
For larger firms with many products, departmentalizing by product is common. Tasks and responsibilities are allocated according to the type of product produced. Many large firms departmentalize by both product and function. The specific divisions are separated by product and each product division is departmentalized by function.
Another method of separating tasks and responsibilities is to departmentalize by location. This system may be appealing if corporate customers in particular locations frequently purchase a variety of the firm's products. Some firms have separated divisions according to the type of customer, and some large firms use more than one method to departmentalize tasks.
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