Management levels and units

Management levels and units

In this article, we will consider the possibilities for optimization and rationalization of the first three organizational and structural parameters – the number of management levels, the number of management units, and the number of staff.

We will also discuss a fragment of the organizational structure of a large enterprise. It is of linear scale, as are the most common structures.

Nature and prerequisites for the emergence of the management structure. In the implementation of the management function the prerequisites for the emergence of an organizational management structure of the company for emergence are;

Horizontal division of labor exists in every company and does not mean random distribution of work among people. It is specialized because a certain job is performed by the one who can do it best.

In one company the distribution of all work to individual parts is a horizontal division of labor, which is reflected in the separation of individual professions and specialized units to perform certain functions.

Vertical division of labor is expressed in the so-called levels (levels) of government. Each specialized structural unit that is higher in the hierarchy coordinates the activities of those units that are below it in the hierarchy.

Number of management levels

An important rule has been derived in management science: the smaller the number of management levels, the more efficient the organizational management structure! And this is perfectly true.

The small number of levels of government is a prerequisite for effective construction and functioning of the organizational structure of government, as the large number implies a longer path of information, opportunities for delay and “distortion”, difficult communication, etc. . Therefore, for the management of a company to be effective, it is necessary to always look for opportunities to reduce the number of management levels. But are there always such opportunities?

The director of the organization

The director is on the first level. You can’t do without a director. Maybe the level of deputy directors? Yes, but in that case, the director should manage the activities of all functional departments and the main production divisions – more than 30 – 40 directly subordinate units. It is impossible! It is completely unreasonable to reduce the level of the heads of the functional departments and the heads of the workshops.

Perhaps the most vulnerable is the level of district chiefs. But we have already made the reservation that this is a large company with very large workshops. The fifth level remains that of the masters, of which there is no question of liquidation. In the end, it turns out that the number of management levels in this structure cannot be reduced.

In general, the opportunities for this in the existing organizational structures of government in our country are minimal. Having said that, I do not mean some “pathological” cases that are rare in the practice of our companies.

The Deputy Director

Here the deputy director has only one subordinate – the head of a production to whom the heads of the workshops are subordinated. The insolvency of this redundant two-tier hierarchy is immediately apparent.

The structural post of “production manager” is not needed. Commenting on this organizational anomaly with our management, it was stated: “We know that this is wrong, but this situation is only a diagram. The two of them – the deputy director and the head of production, have divided the workshops, one directly managing three of the workshops, and the other – the other four. This is unacceptable, which we have tried to convince you of.

Or the similar situation in a large factory in the town of S., where we were given the following explanation: “you are right and until last year there was no production manager. Here’s how this situation came about. Reference: “Organization of the work of the manager”,

The deputy director for technical affairs left and went to work abroad. We immediately appointed in his place the chief mechanic with 4 years of experience, but a true professional and with high personal prestige and authority.

But a few months later, our former colleague returned because he had climate problems. It was just not going to remove the new appointments, and we wanted to arrange the former colleague as well. We thought, though, and decided to open this position so as not to reduce his salary much. Here too the subjective factor imposes otherwise well-meaning vicious actions.

It is a different matter if the Deputy Director for Production Affairs was also given some functional ones, such as the “Technological” department, the “material and technical supply” department, and others. Then, the existence of the position of head of a production is justified.

Abstracting from such cases and accepting this rule, it can be said that the reserves for increasing the efficiency of management in terms of reducing the number of levels of organizational structures are minimal, but there are reservations. However, it all depends on the accepted style of management of the company, and not so much on the size and number of its staff. T. Peters and R. Waterman show that in “Ford” there are 17 management levels, while in “Toyota” they are 5, as many as are in the government of the Roman Catholic Church with its 800 million believers.

Number of management units

This organizational-structural parameter characterizes the degree of horizontal distribution of the exercise system. The units are a group of managers, subordinated to one manager. Each unit must clearly outline its main purpose, main tasks, and functions. As a rule, a unit is created to implement a complex function. Reference: “BUSINESS VALUE-ORIENTED PRINCIPLES, ISSN 2563-366X”

However, one unit can implement several complex functions, as well as several units can be created to implement one complex function. In a small enterprise, the functions of labor and personnel management can be entrusted to the department of labor and salary, without creating a department “Personnel” or “Personnel”.

In a large company, the complex function of personnel management can be realized by several departments, united at a higher hierarchical level in the personnel directorate. This parameter can be determined both for all units in the control system and for the units in a given level of control.

With a large number of units in one level, the horizontal coordination of management decisions becomes more difficult, the possibility for making contradictory decisions increases, which leads to a decrease in the efficiency of the management structure.

The only thing between the units and the level of management is a characteristic feature of the organizational structures of management. The delineation of levels in the management units is strengthened by the deepening of the division of labor in the sphere of management and by the multifaceted content of the management.

In contrast to the number of levels of government, there are significantly more opportunities to improve the organizational structure of government. They come down to:

Elimination of unnecessary units

For example, it is estimated that in the current conditions a planning and economic department is not needed and is being liquidated. This is noticeable in many companies this year and next, which quickly proves its bankruptcy. The experience of developed countries shows that forecasting and planning are leading functions in the management of any company.

Creating new units

For example, a marketing department that will implement completely new functions, different from those of the sales department, or a unit “Strategy and Structure”, which will be assigned directly to the first head and will implement functions related to strategic research and improvement of management.

Combining two or more units into one

For example, the departments of the chief mechanic and the chief power engineer merge into one “Energomechanical” department;

Creating two or more units from an existing unit. For example, the Technical Department is divided into two departments – the Design Department and the Technological Department;

Transfer of one unit from one department to another (for example, the Logistics Department, functioning in the department, Deputy Director for Economic Affairs, are transferred to the direct subordination of the Deputy Director for Production Affairs);

Any such change must be made if necessary. It should also be borne in mind that these essentially organizational changes are associated with the emergence of problems of a purely psychological nature. Because the liquidation of a management unit is not just the deletion of a square in the scheme of the organizational structure of management, but the decision of people’s destinies, just as the merging of two departments into one leads to the decision of which of the two will head it or not at all. Тhe new boss will be one of them.

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