Departmentation, divisionalisation, span of control, chain of command and co-ordination

1. Departmentation

Departmentation is the grouping of activities and people into departments, each under a manager, so that the organisation can expand beyond the limit of what one person can supervise. Koontz and O’Donnell treat it as a consequence of the span of control.

Bases

Most large firms use a composite basis: function at the top, product or territory below.

Divisionalisation

Divisionalisation is departmentation by product or territory carried to the point where each division is a semi-autonomous unit with its own production, marketing and finance, run as a profit centre, under a head office that controls policy and capital. It grew out of the General Motors model that Drucker studied. Merits: accountability for profit, quicker decisions, training of general managers. Demerits: duplication of services, rivalry between divisions, need for strong central control.

2. Span of control

Span of control (span of management) is the number of subordinates a manager can supervise effectively. A narrow span gives close supervision but many levels (a tall structure); a wide span gives fewer levels (a flat structure), quicker communication and more delegation, but looser supervision.

Lyndall Urwick suggested that no superior can directly supervise more than five, or at most six, subordinates whose work interlocks. Modern writers reject a fixed number.

Factors determining the span

• Ability and experience of the manager and of the subordinates.
• Nature of the work: routine and similar work allows a wide span.
• Degree of delegation and clarity of plans.
• Use of objective standards and control techniques.
• Communication techniques available.
• Physical dispersion of subordinates.
• Time the manager must spend on other duties such as planning.

Graicunas’ formula

V.A. Graicunas, a Lithuanian-born management consultant working in Paris, showed in 1933 that as subordinates are added, the relationships the superior must manage grow much faster. With n subordinates:

• Direct single relationships = n
• Direct group relationships = n(2ⁿ⁻¹ − 1)
• Cross relationships = n(n − 1)
• Total = n(2ⁿ/2 + n − 1)

Worked example (n = 5). Direct single = 5. Direct group = 5 × (2⁴ − 1) = 5 × 15 = 75. Cross = 5 × 4 = 20. Total = 5 + 75 + 20 = 100. Check by the formula: 5 × (32/2 + 5 − 1) = 5 × 20 = 100.

Adding a sixth subordinate adds 20% to the direct relationships but more than doubles the total. The criticism is that not all potential relationships occur, or occur with equal frequency.

3. Chain of command

The chain of command (Fayol’s scalar chain) is the unbroken line of authority from the top of the organisation to the lowest level, which shows who reports to whom. Orders go down it and reports and appeals go up it.

• Merits: clear authority and responsibility, discipline, an orderly channel of communication, and unity of command.
• Demerits: a long chain delays communication and decisions, and messages are distorted as they pass through many levels.

Fayol’s remedy is the gang plank: if F and P are at the same level in two different chains under A, F may deal directly with P, with the consent of their superiors and on condition that the superiors are informed, instead of sending the matter up to A and down again.

4. Co-ordination: the essence of management

Co-ordination is the orderly arrangement of group effort to provide unity of action in the pursuit of a common purpose (Mooney and Reiley). Koontz and O’Donnell call it the essence of management because it is not a separate function but the result of performing every function well: plans co-ordinate departments, organisation fixes relationships, staffing balances skills, directing harmonises effort, and control corrects imbalance.

Mary Parker Follett’s principles

1. Direct contact between the people concerned.
2. Early stages: co-ordinate at the planning stage, not after conflict.
3. Reciprocal relating of all factors in a situation.
4. Continuing process: co-ordination never stops.

Techniques

Sound planning and clear objectives; a well-defined structure; effective communication; committees and liaison officers; good leadership; and self-co-ordination by employees who know the overall goal.

Problems (difficulties) of co-ordination

• Growth in size and number of departments.
• Specialisation: specialists think in terms of their own department.
• Differences in goals, attitudes and time horizons of departments.
• Poor communication and lack of information.
• Personality clashes and departmental rivalry.
• Geographical spread of operations.
• Lack of leadership or of clear policies.

How this is examined

Short notes: “departmentalisation” (June 2025), “bases for departmentation” (April 2023), “span of control” (August 2024), “chain of command” (January 2025 and January 2026), and “problems of co-ordination” (January 2025). A span of control note that includes Graicunas’ formula with the five-subordinate calculation stands out from the usual answer.