MIDDLE MANAGEMENT

DEFINITION / INTRODUCTION
-They're above the non-managerial staff and below the top-level managers and executives of the
organisation.
-They're responsible for the work of their section, its staff and their outputs.
-They report to higher-level managers or executives and are accountable for their section.
-Middle managers implement the strategies and policies that the organisation's top-level managers set
and communicate these priorities to lower-level staff.
-Middle managers can hire and remove lower-level staff, set schedules, allocate and delegate work,
oversee the work of others and make key decisions.

ROLES
1. Operates within budget
-Operating budget helps plan future revenue and expenses and results in a projected income statement.
-Has several subsidiary budget that begin with projected sales.
-For example, management estimates sales for the upcoming few years that will breaks down into
quarters, months, and weeks in preparing the sales budget.
-Management uses the number of units from the sales budget and the company’s inventory policy to
determine how many units need to be produced.
-The budget development process results in various budgets for various purposes, such as revenue,
expenses, or units produced, but they all begin with a plan.
-To save time and eliminate unnecessary repetition, management often starts with the current year’s
budget and adjusts it to meet future needs.
-The goals, assumptions, and predicted revenue and expenses information are passed from the senior
manager to middle managers, who further pass the information downward.
-Each department must then determine how it can allocate its expenses efficiently while still meeting
the company goals.
-Informing management of how many units need to be produced, how much material needs to be
ordered, how many labour hours need to be scheduled, and the amount of overhead expected to be
incurred.

TOP-DOWN BUDGETING
Executives set company goals and targets – Finance department allocates budget to each department –
Departments prepare their budgets – Finance department review the budgets to see if they are aligns
with the goals – Budgets enter the financial system to track monthly expenses