ORGANIZATION: CHAIN OF COMMAND
Thirty-five years ago, the chain-of-command concept was a basic cornerstone in the design of organizations. It can be observed that it has far less importance today. But contemporary managers should still consider its implications when they decide how best to structure their organizations.
The chain of command is an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. It answers questions for employees whom to go to if there is a problem and to whom they are responsible.
You canâ€™t discuss the chain of command without discussing two complementary concepts: authority and unity of command. Authority refers to the rights inherent in a managerial position to give orders and expect the orders to be obeyed. To facilitate coordination, each managerial position is given a place in the chain of command, and each manager is given a degree of authority in order to meet his or her responsibilities. The unity-of-command principle helps preserve the concept of an unbroken line of authority. It states that a person should have one and only one superior to whom he or she is directly responsible. If the unity of command is broken, an employee might have to cope with conflicting demands or priorities from several superiors.
Times change, and so do the basic tenets of organizational design. The concepts of chain of command, authority, and unity of command have substantially less relevance today because of advancements in information technology and the trend toward empowering employees. For instance, a low-level employee today can access information in seconds that 35 years ago was available only to top managers. Similarly, network computers increasingly allow employees anywhere in an organization to communicate without going through formal channels.
Moreover, the concepts of authority and maintaining the chain of command are increasingly less relevant as operating employees are being empowered to make decisions that previously were reserved for management. Add to this the popularity of self-managed and cross-functional teams and the creation of new structural designs that include multiple bosses and the unity-of-command concept takes on less relevance. There are, of course, still many organizations that find they can be most productive by enforcing the chain of command. There just seem to be fewer of them nowadays.
Span of Control
How many employees can a manager efficiently and effectively direct? This question of span of control is important because, to a large degree, it determines the number of levels and managers an organization has. All things being equal, the wider or larger the span the more efficient is the organization. An example can illustrate the validity of this statement.
Assume that we have two organizations, both of which have approximately 4,100 operative level employees. If one has a uniform span of four and the other a span of eight, the wider span would have two fewer levels and approximately 800 fewer managers If the average manager made Rs.5 lacs a year, the wider span would save Rs.2 crore a year in management salaries! Obviously, wider spans are more efficient in terms of cost. However, at some point wider spans reduce effectiveness. That is, when the span becomes too large, employee performance suffers because supervisors no longer have the time to provide the necessary leadership and support.
Narrow or small spans have their advocates. By keeping the span of control to five or six employees, a manager can maintain close control. But narrow spans have three major drawbacks. First, as already described, theyâ€™re expensive because they add levels of management. Second, they make vertical communication in the organization more complex. The added levels of hierarchy slow down decision making and tend to isolate upper management. Third, narrow spans of control encourage overly tight supervision and discourage employee autonomy.
The trend in recent years has been toward wider spans of control. This is consistent with recent efforts be companies to reduce costs, cut overhead, speed up decision making, increase flexibility, get closer to customer, and empower employees.
However, to ensure that performance doesnâ€™t suffer because of these wider spans, organizations have been investing heavily in employee training. Managers recognize that they can handle a wider span when employees know their jobs inside and out or can turn to their coworkers when they have questions.