Management Levels

Self – assumes a middle management level

- communications occur to any number of
levels up or down the organization
- most frequent communication is usually
limited to two levels
Other managers – same level as the person’s
own manager
Peers – both within the same function and
within different functions
Size of an organization varies – debate as to
optimum size for maximum efficiency
Two variables affecting efficiency:
1. Material considerations – economies of scale
2. People considerations – favor much smaller
units due to the ff. reasons:
a. communication problems (time wasted to
insure smooth communication)
 b. inability to see individual contribution for
staff working in large projects
c. the larger the team, the greater the
overhead (i.e., supervision and coordination)
Remedy: Overcome people problems while maintaining
advantages from material considerations

Divisions or profit centers – (i.e., one division devoted to

manufacturing only; thus, giving a larger size from the
materials viewpoint and a level of autonomy for profit
and loss)
 Corporate Headquarters
• Responsible for corporate strategy
• Setting divisional goals
• Monitoring divisional performance
• Carrying out functions that benefit from size
(i.e., material procurement)
 Management Responsibilities
• Functions of a manager are complex
(Managers are people whose main tasks are to
deal with other people – but note that human
behavior is complex)
• Managers operate in an environment in which
they voluntarily accept responsibilities as part
of their jobs under certain constraints
• Shareholders – equity capital intact; return on
capital (measured in terms of dividends and
growth)
• Employees (managers are themselves
employees) – rewards for their labor; good
working conditions; job that meets career
aspirations
• Customers – make it possible for the
organization to exist “customer is king”;
reasonable price; quality; regularity of supply
• External customers – the ultimate buyers of
the company products
• Internal customers – depend on the manager
and his department to produce a product or
service in which they can add value before it
reaches the external customers
• Note that marketing contains the greatest
number of internal dependencies in the next
slide
• Suppliers – raw materials at the right price and
on time
• Community – environment protection;
employment balance maintained; other forms
of support to the community
 CONSTRAINTS
• Competitors – fight for market share and
revenues; competition can force business
organizations to be more efficient
• Government – direct constraints such as
regulations on health and safety issues; taxes;
and measures to prevent monopoly
- indirect constraints such as interest rates and
currency fluctuations
• Natural environment – manager has little
control over the acts of God (i.e., fire,
typhoon); however, there are cases when it
presents opportunities
• Labor market – shortage of skilled staff
• Pressure groups– strive to influence the
manager so that the aims of their members
are met (i.e., labor unions, environment
groups)
• Creditors – wish to obtain short term returns
on their loans; accounts payable to suppliers
 Planning
• Anticipating future events and making
preparations to meet them effectively; based
on forecasts of alternative future events
• Formulate goals for the organization and
prepare plans for achieving the goals
• Deciding in advance what to do, how to do it,
where to do it, when to do it and who is to do
it?
Goals Strategic Plan – strategy that
will be used to
reach the goals
(SWOT)
Plan of Action
- tasks needed to carry out
the objectives long term growth
vs. short term profits
 Organizing
• To achieve the most effective utilization of the
available resources (people, facilities,
equipment and money)
• Splits the tasks into workable packages and
sets up the organization (i.e., recruit people,
skills mix through training) to carry out the
tasks
• Coordinates tasks and avoid duplication
• Effective delegation
 Integrating
• Normally takes the longest time in which the
plan of action is carried out to achieve the
company’s goals
• See the whole picture (i.e., differentiating the
entire forest from the individual trees)
• Need to make decisions - obtain additional
information when decisions can be postponed
• Risks must be taken but should be proactive
• “What if” plans to minimize risks
 Measuring
• Determine what was accomplished and how
successful in meeting the original plan
• Attempt to measure both the effectiveness
and efficiency of the group’s effort
• Provide feedback for corrective action
 Supervision Curves
• Amount of supervision varies with staff
qualifications
• The higher the skill level, the less the
supervision required