Adaptive Span of Control as a Dynamic Strategic Lever for Early-stage Firm Growth

This study examines the dynamic role of the span of control in early-stage venture growth using a computational model that integrates two fundamental trade-offs in organizational information processing: (1) between individual-level and organizational-level bottlenecks and (2) between commission and omission errors. Our analysis suggests that, when both trade-offs are present, an intermediate span of control is optimal for firm growth. Contrary to conventional wisdom, this optimum progressively decreases as firms scale. This gradual narrowing can be especially beneficial when firms operate in highly uncertain or more munificent environments or when their employees are more capable of generating or screening ideas. Overall, our study reconceptualizes the span of control as a dynamic strategic instrument for accelerating early-stage firm growth, rather than a static constraint on scalability.