Identify the concept that determines the levels of management in the organisation structure?

Span of Management

The correct answer is Option (3) → Span of Management.

Span of Management determines the levels of management in the organisation structure.

The span of management, to a large extent gives shape to the organisational structure. 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. A proper organisation structure is essential to ensure a smooth flow of communication and better control over the operations of a business enterprise.

OTHER OPTIONS

• The concentration of decision-making authority is called centralisation whereas its dispersal among more than one person is known as decentralisation. According to Fayol, “There is a need to balance subordinate involvement through decentralisation with managers’ retention of final authority through centralisation.” The degree of centralisation will depend upon the circumstances in which the company is working. In general large organisations have more decentralisation than small organisations.

• Delegation of authority establishes superior-subordinate relationships, which are the basis of hierarchy of management. It is the degree and flow of authority which determines who has to report to whom. The extent of delegated authority also decides the power that each job position enjoys in the organisation.