Final answer:
Crystal Davis is using the span of control principle to manage her firm's structure by having each manager oversee seven employees, ensuring manageable oversight and effective supervision.
Step-by-step explanation:
Crystal Davis believes that one manager cannot effectively supervise a large number of subordinates. Hence, she has structured her firm such that each manager supervises seven employees. This approach to management and organizational structure is reliant on the span of control principle. The span of control refers to the number of subordinates that a manager or supervisor can effectively manage. This concept is a critical part of creating an efficient organizational structure and ensuring optimal managerial effectiveness. While the hierarchy of authority is the chain of command within the organization, the span of control is more specifically about the ideal number of direct reports for a supervisor. Davis' strategy aligns with contemporary shifts away from rigid hierarchies towards more streamlined organizational structures that may facilitate better communication, quicker decision-making, and a more agile response to changes.