Management is about delivery. There are many, many ways to achieve the same objectives, some more effective than others. At the end of the days, managers need to deliver, or else. In today’s Internet world, pace, not size, wins.
Above the basic level, organization design is almost all about communication: striving for the shortest latency, highest fidelity, and lowest overhead. Since human brains (at least mine) can only attend to a small set of things, a manager must design this carefully — too deep the organization, the messages don’t come through; too flat, the brain overloads.
To make matter more complicated, the senior manager also need to design for those managers who work for him. What’s their capacities? How do they communicate? What’s their latencies? The entire organization must be optimally balanced.
Then there is the human factors. Some consider the distance to the boss a status symbol. Others crave for the power associated with a large staff. The fact is: rapport is a precursor for promotion, not reporting structure. To establish rapport, deliver first.
It is important not to over-engineer the problem. Focus on the impact of delivery. Deal with human factors as secondary consideration. Optimize for 12 months (adjust for the pace of the organization). Each re-organization disrupts the productivity temporarily. Allow time to make up the lost with the extra efficiency with of the new structure. Don’t do this lightly.