Division of labor

If you've worked with a performance improvement consultant (nod to Geary Rummler, founder of the Performance Design Lab, may he rest in peace) or anyone in the organizational design field, you've probably taken a very close look at how work gets done in the organization.  Here's a term you might come across in one of those conversations:  division of labor.


Division of labor simply means how the overall work that needs to be done in the organization is accomplished.  Which people get which slices of work.  There are three lenses used in determining the appropriate division of labor:  departmentalization, span of control, and administrative hierarchy.

Departmentalization is the determination of which groups should be created, and then which buckets of work each group should be given.  Generally the buckets are created with the following lenses in mind: function (all the tax accountants in one group); process; product or service; geography; and customer.

Span of control is also important in divvying up the work.  It's how many people a particular role can lead.  In some parts of the organization a manager may have as many as 100 direct reports, and in others a manager may have only one.  There are conditions to consider in span of control, and different sources provide different numbers of conditions.  In short, span of control is driven by diversity of direct reports, diversity of information, and cost of communication.  If all direct reports are doing the same type of work, then the manager is able to batch and combine tasks.  If information is leveraged by roles consistently, then the manager is able to use the same information for similar conclusions and decisions across the space.  If communication is relatively inexpensive (think conference call, or a co-located team), then the manager can communicate efficiently.

The last one is administrative hierarchy, and I've only included it here because some will hear the term instead of span of control  Administrative hierarchy is the inverse of span of control - it's the system of reporting relationships in the organization.As you might expect, administrative hierarchy and the size of the firm are correlated.  That is, the larger the organization, the more levels between the first level and the CEO.  Interestingly, the span of control also increases with the size of the organization.

Hope this helps!

-Bryan