The correct answer is option 3- Span of management.
"The number of subordinates that can be effectively managed by a superior" is referred to as Span of management.
Span of management refers to the number of subordinates that can be effectively managed by a superior. This determines the levels of management in the structure.
OTHER OPTIONS
- Formal organisation refers to the organisation structure which is designed by the management to accomplish a particular task. It specifies clearly the boundaries of authority and responsibility and there is a systematic coordination among the various activities to achieve organisational goals. The structure in a formal organisation can be functional or divisional.
- Functional structure- Grouping of jobs of similar nature under functional and organising these major functions as separate departments creates a functional structure. All departments report to a coordinating head. For example, in a manufacturing concern division of work into key functions will include production, purchase, marketing, accounts and personnel. These departments may be further divided into sections.
- In a divisional structure, the organisation structure comprises of separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit. Divisional structure is suitable for those business enterprises where a large variety of products are manufactured using different productive resources. When an organization grows and needs to add more employees, create more departments and introduce new levels of management, it will decide to adopt a divisional structure.
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