Span-of-control organization

Firms that use one or more of the other bases of division may combine them with span-of-control organization. This form of organizational structure is predicated on the assumption that there is some ideal or desirable span of control for a field sales manager. The determined number is considered a reasonable maximum for optimizing field sales manager’s performance relative to the selling efforts of salesmen. More than this number and the field sales manager will not have sufficient time for each of the salesmen assigned to his jurisdiction.

One manufacturer has determined that the ideal span of control for their district sales managers is ten salesmen. There is no stated number above ten when splits are made. Rarely, however, will a district be allowed to get any bigger than 15 salesmen. Future sales prospects have a lot of influence of the timing of the split at a lower number than might otherwise be the case.

The main drawback is the inverse relationship of the span of control to the number of tiers of sales management. The narrower the span of control, the more likely will be the necessity of another level of dales management. This increase in executive overhead raises disproportionately selling expenses as a percent of sales. A second drawback is the difficulty that may be experienced in determining when a new sales unit should be broken out.