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It is important for an organization to determine how it wants to manage division of labor, which means how to group various tasks, and span of control which relates to the number of layers and number of direct reports found in an organization.

"Managing area" is the number of direct reports a manager has. Research and theories exist, but the ideal number of direct reports to manage effectively can be elusive.

A perfect ratio is unlikely, but the span of control is important for understanding organizational design and behavior within an organization, such as the approach to employee interaction and potency of communication between different levels within the organization.

Therefore, many factors must be considered before determining the optimal ratio within an organization. Less control is more costly for the organization, but it also allows managers to spend more time with their direct reports, which typically facilitates career growth and advancement.

In contrast, greater control means that managers have more direct reports to oversee, creating a "flat" organization. This method increases the number of interactions between managers and their direct reports, which can lead to manager overwhelm, but can also provide more autonomy.

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