Association of Chartered Certified Accountants (ACCA) Certification Practice Test

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What does 'span of control' refer to in an organization?

The number of levels in the hierarchy
The number of subordinates reporting to a manager
The overall size of the organization
The total number of employees in the organization

The correct answer is: The number of subordinates reporting to a manager

'Span of control' specifically refers to the number of subordinates that report directly to a manager. This concept is crucial in organizational structure as it affects the levels of management and the effectiveness of communication within an organization. A wider span of control means a manager oversees more employees, which can lead to increased delegation but may also dilute managerial effectiveness if too many direct reports create challenges in supervision. Conversely, a narrow span allows for more effective oversight and communication but can lead to a more hierarchical and potentially bureaucratic structure. Understanding span of control helps in determining the optimal structure for an organization, balancing efficiency and oversight. This is why the focus is on the manager-subordinate relationship within the context of management effectiveness and organizational efficiency. The other options do not accurately capture this specific focus on management structure regarding direct report relationships.