Levels of management

 Introduction

To perform the managerial tasks efficiently and effectively, organizations group or differentiate their managers in two main ways—by level in hierarchy and by type of skill. First, they differentiate managers according to their level or rank in the organization’s hierarchy of authority. The three levels of managers are first-line managers, middle managers, and top managers—arranged in a hierarchy.

 

Typically first-line managers’ report to middle managers and middle managers report to top managers.  Second, organizations group managers into different departments (or functions) according to their specific job-related skills, expertise, and experiences, such as a manager’s engineering skills, marketing expertise, or sales experience. A department, such as the manufacturing, accounting, engineering, or sales department, is a group of managers and employees who work together because they possess similar skills and experience or use the same kind of knowledge, tools, or techniques to perform their jobs. Within each department are all three levels of management. Next we examine why organizations use a hierarchy of managers and group them, by the jobs they perform, into departments.

Levels of Management

Organizations normally have three levels of management: first-line managers, middle managers, and top managers. Managers at each level have different but related responsibilities for using organizational resources to increase efficiency and effectiveness.  At the base of the managerial hierarchy are    first-line managers,    often called supervisors.  They are responsible for daily supervision of the non-managerial employees who perform the specific activities necessary to produce goods and services.

First-line managers-Function

First-line managers work in all departments or functions of an organization.  Examples of first-line managers include the supervisor of a work team in the manufacturing department of a car plant, the head nurse in the obstetrics department of a hospital, and the chief mechanic overseeing a crew of mechanics in the service function of a new car dealership.

Example:

At Dell, first-line managers include the supervisors responsible for controlling the quality of its computers or the level of customer service provided by telephone salespeople. When Michael Dell started his company, he personally controlled the computer assembly process and thus acted as a first-line manager or supervisor. 

Middle managers-Function

Supervising the first-line managers are middle managers,    responsible for finding the best way to organize human and other resources to achieve organizational goals. To increase efficiency, middle managers find ways to help first-line managers and non-managerial employees better use resources to reduce manufacturing costs or improve customer service. To increase effectiveness, middle managers evaluate whether the organization’s goals are appropriate and suggest to  top managers how goals should be changed. Often the suggestions that middle managers make to top managers can dramatically increase organizational performance.

A major part of the middle manager’s job is developing and fi ne-tuning skills and know-how, such as manufacturing or marketing expertise, which allow the organization to be efficient and effective.

Middle managers make thousands of specific decisions about the production of goods and services:

ü Which first-line supervisors should be chosen for this particular project?

ü Where can we find the highest-quality resources?

ü How should employees be organized to allow them to make the best use of resources? 

Behind a first-class sales force, look for the middle managers responsible for training, motivating, and rewarding the salespeople. Behind a committed staff of high school teachers, look for the principal who energizes them to find ways to obtain the resources they need to do outstanding and innovative jobs in the classroom.  In contrast to middle managers,    top managers    are responsible for the performance of   all departments. They have cross-departmental responsibility.

Top managers - Functions

Top managers establish organizational goals, such as which goods and services the company should produce; they decide how the different departments should interact; and they monitor how well middle managers in each department use resources to achieve goals.  Top managers are ultimately responsible for the success or failure of an organization, and their performance (like that of Michael Dell or Ursula Burns) is continually scrutinized by people inside and outside the organization, such as other employees and investors. The chief executive officer (CEO) is a company’s most senior and important manager, the one all other top managers report to. Today the term chief operating officer   (COO) often refers to the top manager who is being groomed to take over as CEO.

Together the CEO and COO are responsible for developing good working relationships among the top managers of various departments (manufacturing and marketing, for example); usually these top managers have the title “vice president.” A central concern of the CEO is the creation of a smoothly functioning    top management team,    a group composed of the CEO, the COO, and the vice presidents most responsible for achieving organizational goals.

  The relative importance of planning, organizing, leading, and controlling—the four principal managerial tasks—to any particular manager depend on the manager’s position in the managerial hierarchy. The amount of time managers spend planning and organizing resources to maintain and improve organizational performance increases as they ascend the hierarchy. Top managers devote most of their time to planning and organizing, the tasks so crucial to determining an organization’s long-term performance. The lower that managers’ positions are in the hierarchy, the more time the managers spend leading and controlling first-line managers or non-managerial employees.

         

Top Level of Management

The Top Level Management consists of the Board of Directors (BOD) and the Chief Executive Officer (CEO). The Chief Executive Officer is also called General Manager (GM) or Managing Director (MD) or President. The Board of Directors are the representatives of the Shareholders, i.e. they are selected by the Shareholders of the company. Similarly, the Chief Executive Officer is selected by the Board of Directors of an organization.

The main role of the top level management is summarized as follows:

1. The top level management determines the objectives, policies and plans of the organization.

2. They mobilizes (assemble and bring together) available resources.

3. The top level management does mostly the work of thinking, planning and deciding. Therefore, they are also called as the Administrators and the Brain of the organization. 4. They spend more time in planning and organizing.

5. They prepare long-term plans of the organization which are generally made for 5 to 20 years.

6. The top level management has maximum authority and responsibility. They are the top or final authority in the organization. They are directly responsible to the Shareholders, Government and the General Public. The success or failure of the organization largely depends on their efficiency and decision making.

7. They require more conceptual skills and less technical Skills.

Middle Level of Management

The Middle Level Management consists of the Departmental Heads (HOD), Branch Managers, and the Junior Executives. The Departmental heads are Finance Managers, Purchase Managers, etc. The Branch Managers are the head of a branch or local unit. The Junior Executives are Assistant Finance Managers, Assistant Purchase Managers, etc. The Middle level Management is selected by the Top Level Management.

The middle level management emphasize more on following tasks:

1. Middle level management gives recommendations (advice) to the top level management.

2. It executes (implements) the policies and plans which are made by the top level management.

 3. It co-ordinate the activities of all the departments.

 4. They also have to communicate with the top level Management and the lower level management.

 5. They spend more time in co-coordinating and communicating.

6. They prepare short-term plans of their departments which are generally made for 1 to 5 years.

7. The middle Level Management has limited authority and responsibility. They are intermediary between top and lower management. They are directly responsible to the chief executive officer and board of directors.

8. Require more managerial and technical skills and less conceptual skills.

Lower Level of Management

The lower level management consists of the Foremen and the Supervisors. They are selected by the middle level management. It is also called Operative / Supervisory level or First Line of Management.

The lower level management performs following activities:

1. Lower level management directs the workers / employees.

2. They develop morale in the workers.

3. It maintains a link between workers and the middle level management.

4. The lower level management informs the workers about the decisions which are taken by the management. They also inform the management about the performance, difficulties, feelings, demands, etc., of the workers.

5. They spend more time in directing and controlling.

6. The lower level managers make daily, weekly and monthly plans.

7. They have limited authority but important responsibility of getting the work done from the workers. They regularly report and are directly responsible to the middle level management.

8. Along with the experience and basic management skills, they also require more technical and communication skills.

Managerial skills

Both education and experience enable managers to recognize and develop the personal skills they need to put organizational resources to their best use. Michael Dell realized from the start that he lacked sufficient experience and technical expertise in marketing, finance, and planning to guide his company alone. Thus he recruited experienced managers from other IT companies, such as IBM and HP, to help build his company. Research has shown that education and experience help managers acquire and develop three types of skills:  conceptual, human, and technical. 

 Conceptual skills are demonstrated in the general ability to analyze and diagnose a situation and to distinguish between cause and effect. Top managers require the best conceptual skills because their primary responsibilities are planning and organizing. By all accounts, Steve Jobs was chosen as CEO to transform Apple, and Anne Mulcahy was chosen to revive Xerox, because of their ability to identify new opportunities and mobilize managers and other resources to take advantage of those opportunities.

Formal education and training are important in helping managers develop conceptual skills. Business training at the undergraduate and graduate (MBA) levels provides many of the conceptual tools (theories and techniques in marketing, finance, and other areas) that managers need to perform their roles effectively. The study of management helps develop the skills that allow managers to understand the big picture confronting an organization.

The ability to focus on the big picture lets managers see beyond the situation immediately at hand and consider choices while keeping in mind the organization’s long-term goals.  Today continuing management education and training, including training in advanced IT, are an integral step in building managerial skills because new theories and techniques are constantly being developed to improve organizational effectiveness, such as total quality management, benchmarking, and Web-based organization and business-to-business (B2B) networks. A quick scan through a magazine such as BusinessWeek or Fortune reveals a host of seminars on topics such as advanced marketing, finance, leadership, and human resources management that are offered to managers at many levels in the organization, from the most senior corporate executives to middle managers. Microsoft, IBM, Oracle, and many other organizations designate a portion of each manager’s personal budget to be used at the manager’s discretion to attend management development programs.

 In addition, organizations may wish to develop a particular manager’s abilities in a specific skill area—perhaps to learn an advanced component of departmental skills, such as international bond trading, or to learn the skills necessary to implement total quality management. The organization thus pays for managers to attend specialized programs to develop these skills. Indeed, one signal that a manager is performing well is an organization’s willingness to invest in that manager’s skill development. Similarly, many non-managerial employees who are performing at a high level (because they have studied management) are often sent to intensive management training programs to develop their management skills and to prepare them for promotion to first-level management positions. 

   Human skills include the general ability to understand, alter, lead, and control the behavior of other individuals and groups. The ability to communicate, to coordinate, and to motivate people, and to mold individuals into a cohesive team, distinguishes effective from ineffective managers. By all accounts, Steve Jobs, Anne Mulcahy, and Michael Dell all possess a high level of these human skills.  Like conceptual skills, human skills can be learned through education and training, as well as be developed through experience. Organizations increasingly utilize advanced programs in leadership skills and team leadership as they seek to capitalize on the advantages of self-managed teams. To manage personal interactions effectively, each person in an organization needs to learn how to empathize with other people—to understand their viewpoints and the problems they face. One way to help managers understand their personal strengths and weaknesses is to have their superiors, peers, and subordinates provide feedback about their job performance. Thorough and direct feedback allows managers to develop their human skills.   

 Technical skills    are the job-specific skills required to perform a particular type of work or occupation at a high level. Examples include a manager’s specific manufacturing, accounting, marketing, and increasingly, IT skills. Managers need a range of technical skills to be effective. The array of technical skills managers need depends on their position in their organizations. The manager of a restaurant, for example, may need cooking skills to fill in for an absent cook, accounting and bookkeeping skills to keep track of receipts and costs and to administer the payroll, and aesthetic skills to keep the restaurant looking attractive for customers.  As noted earlier, managers and employees who possess the same kinds of technical skills typically become members of a specific department and are known as, for example, marketing managers or manufacturing managers.

Managers are grouped into different departments because a major part of a manager’s responsibility is to monitor, train, and supervise employees so their job-specific skills and expertise increase. Obviously this is easier to do when employees with similar skills are grouped into the same department because they can learn from one another and become more skilled and productive at their particular jobs.  It also shows that inside each department, a managerial hierarchy of first-line, middle, and top managers emerges.

At Dell, for example, Michael Dell hired experienced top managers to take charge of the marketing, sales, and manufacturing departments and to develop work procedures to help middle and first-line managers control the company’s explosive sales growth. When the head of manufacturing found he had no time to supervise computer assembly, he recruited experienced manufacturing middle managers from other companies to assume this responsibility. At Xerox, Anne Mulcahy nurtured many of her managers to develop the required functional skills, such as Ursula Burns, who used her engineering expertise to rise to become CEO. 

                                        

Today the term   core competency   is often used to refer to the specific set of departmental skills, knowledge, and experience that allows one organization to outperform its competitors. In other words, departmental skills that create a core competency give an organization a competitive advantage.  Dell, for example, was the first PC maker to develop a core competency in materials management that allowed it to produce PCs at a much lower cost than its competitors—a major source of competitive advantage. Similarly, 3M is well known for its core competency in research and development (R&D) that allows it to innovate the new products at a faster rate than its competitors, and Xerox has been working to develop a competency to provide a full range service that is customized to the needs of each of the companies it serves.

Conclusion

Effective managers need all three kinds of skills—conceptual, human, and technical— to help their organizations perform more efficiently and effectively. The absence of even one type of managerial skill can lead to failure. One of the biggest problems that people who start small businesses confront, for example, is their lack of appropriate conceptual and human skills. Someone who has the technical skills to start a new business does not necessarily know how to manage the venture successfully. Similarly, one of the biggest problems that scientists or engineers who switch careers from research to management confront is their lack of effective human skills. Ambitious managers or prospective managers are constantly in search of the latest educational contributions to help them develop the conceptual, human, and technical skills they need to perform at a high level in today’s changing and increasingly competitive global environment.