Post on 24-Dec-2015
SPAN OF CONTROL
SPAN OF CONTROL
In a business of more than one person, unless the business has equal partners, then there are
managers and subordinates
Subordinates are workers controlled by the manager
HIERARCHY- structure of the management of the business
TOP OF COMPANY- managing director until the BELOW OF THE COMPANY- shop floor worker
SPAN OF CONTROL
SPAN OF CONTROL
HIERARCHY is usually best understood by using an organization chart
NARROW SPAN OF CONTROL
SPAN OF CONTROL
SPAN OF CONTROL is the number of people who report to one manager in a hierarchy
The less people under the control of one manager- the narrower (smaller) the span of control
NARROW SPAN OF CONTROL
SPAN OF CONTROL
ADVANTAGES of narrow span of control:
1) Allows a manager to communicate quickly with the employees under them and control them more
easily
2) Feedback of ideas from the workers will be more effective
3) Requires a higher level of management skill to control a greater number of employees, so there is
less management skill required
WIDE SPAN OF CONTROL
SPAN OF CONTROL
The more people under the control of one manager- the bigger (wider) the span of control
WIDE SPAN OF CONTROL
SPAN OF CONTROL
ADVANTAGES of wide span of control:
1) There are less layers of management to pass a message through, so the message reaches more
employees faster
2) It costs less money to run a wider span of control because a business does not need to employ as
many managers
SPAN OF CONTROL
SPAN OF CONTROL
The width of the span of control depends on:
1) THE TYPE OF PRODUCT BEING MADE- products which are easy to make or deliver will need less
supervision and so can have a wider span of control
2) SKILLS OF MANAGERS AND WORKERS- a more skilful workforce can operate with a wider span of control because they will need less supervision. A
more skilful manager can control a greater number of staff
SPAN OF CONTROL
SPAN OF CONTROL
CHAIN OF COMMAND- the line on which orders and decisions are passed down from top to bottom of
the hierarchy
A production manager may be higher up the hierarchy, but will not be able to tell a marketing
person what to do
SPAN OF CONTROL
SPAN OF CONTROL
ADVANTAGE OF HIERARCHIES:
1) Helps create a clear communication line between the top and bottom of the business- this improves
co-ordination and motivation since employees know what is expected of them and when
2) Hierarchies create departments and departments form teams
SPAN OF CONTROL
SPAN OF CONTROL
DISADVANTAGE OF HIERARCHIES:
1) Departments work for themselves and not the greater good of the business
2) Departments do not see the whole picture in making decisions
3) Hierarchies can be inflexible and difficult to adjust
THE PURPOSE OF CONTROL
SPAN OF CONTROL
Control provides an organization with ways to:
1) Adapting to environmental change2) Limiting the accumulation of error
3) Coping with organizational complexity4) Minimizing costs
ADVANTAGES OF CONTROLLING
SPAN OF CONTROL
Improves Goodwill Minimise wastages
Helps to fix responsibilityGuides operations
Motivates employees Minimises deviations Facilitates delegation
Facilitates co-ordination Increases efficiency
MAIN STPES IN CONTROL PROCESS
SPAN OF CONTROL
Establishment of standards
Measurement of performance
Comparison of actual and standard performance
Taking remedial actions
TYPE OF CONTROL
SPAN OF CONTROL
1) PRE- CONTROL/ FEED-FORWARD CONTROL: Control that takes place before work is performed
2) CONCURRENT CONTROL:Control that takes place as work is being performed
3) FEEDBACK CONTROL:Control that concentrates on the post organizational
performance
BREAK-EVEN ANALYSIS
SPAN OF CONTROL
Technique widely used by production management and management accountants
Based on categorising production costs between those which are:
‘VARIABLE’ (costs that change when the production output changes)
‘FIXED’ (costs not directly related to the volume of production)
BREAK-EVEN ANALYSIS
SPAN OF CONTROL
Units sold
Sales
FIXED COSTS
SPAN OF CONTROL
Business costs that are not directly related to the level of production/output
Even if the business has a zero output or high output, fixed costs will remain broadly the same
Examples: Rent, Depreciation, R&D, Admin costs
VARIABLE COSTS
SPAN OF CONTROL
Those costs which vary directly with the level of output
Represent payment output-related inputs such as raw materials, commission
DIRECT VARIABLE COSTS- directly attributable to the production of a particular product/service and allocated to a particular cost centre (Example: raw
materials, wages)
INDIRECT VARIABLE COSTS- cannot be attributable to production but they do vary with output (Example;
depreciation, maintenance)
SEMI-VARIABLE COSTS
SPAN OF CONTROL
EXAMPLE: when a business has relatively low levels of sales, it may not require costs associated with
functions such as human resource management or a fully resourced finance department
However, as the scale of the business grows, then more resources are required
If production rises suddenly then some short-term increase in warehousing and/or transport may be
required
In these circumstances, we say that part of the cost is variable and part fixed