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Unit 8: Span of Management

7. Control Mechanism: The span of control also depends upon the control mechanism being Notes
followed. Control may be followed either through personal supervision or through
reporting. The former favours narrow span and the latter favours a wide span.
To sum up, it can be said that an executive should be expected to supervise a reasonable number
of subordinates. What is reasonable depends on a variety of factors like individual differences in
executives, number and capacity of subordinates, the nature of work, availability of time, ease
of communication, internal checks and controls and degree of delegation in the organisation. If
the span of control is narrow, there will be more organisational levels, which in turn may
impede communication. If the number of levels is reduced and the span of control is widened,
the supervisory load may become too heavy. Sound management requires a proper balance
between supervisory load and organisation levels.

8.4 Centralisation and Decentralisation

Centralisation, or centralization (see spelling differences), is the process by which the activities
of an organisation, particularly those regarding decision-making, become concentrated within
a particular location and/or group.

Decentralisation is an extension of the concept of delegation and cannot exist unless authority is
delegated. In decentralisation, a great deal of authority is delegated and more decisions are
made at lower levels. It gives added responsibility to managers at all levels below the top.
According to Fayol 'everything which goes to increase the subordinate's role is decentralisation,
everything which goes to reduce it is centralisation'.

8.4.1 Centralisation

By centralisation, we mean the concentration of a formal authority at the top levels of a business
organisation. It is a tendency aimed at centralised performance. Hence, it is the opposite of
dispersal and delegation of authority. It has an important bearing on the processes of policy
formulation and decision-making.
The two major areas of management or administration are reserved with the top management
in a centralized organisation. Hence, the lower levels of the organisational hierarchy have to
look upwards for direction, advice, clarification, interpretation, etc.

Under centralization, even the agencies of the parent organisation do not enjoy any authority of
decision-making and hence are fully dependent on the central authority. The agencies are required
to implement the decisions in accordance with the pre-determined guidelines as handed down
to them by the headquarters operating as the central authority.

Centralisation acquires its acute form when an organisation operates from a single location i.e.,
when it does not have any field agencies.
In the words of Harold Koont, Centralisation has been used to describe tendencies other than
the dispersal of authority. It often refers to the departmental activities; service divisions,
centralised similar or specialised activities in a single department. But when centralisation is
discussed as an aspect of management, it refers to delegating or withholding authority and the
authority dispersal or, concentration in decision making. Therefore, centralisation can be regarded
as concentration of physical facilities and/or decision making authority.

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