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Most organizations have three
management levels: first-level, middle-level, and top-level managers. These
managers are classified in a hierarchy of authority, and perform different
tasks. In many organizations, the number of managers in every level
resembles a pyramid. Each level is explained below in specifications of
their different responsibilities and likely job titles.
Top-level managers
The top consists of the board of
directors (including non-executive directors and executive directors),
president, vice-president, CEOs and other members of the C-level executives.
They are responsible for controlling and overseeing the entire organization.
They set a tone at the top and develop strategic plans, company policies,
and make decisions on the direction of the business. In addition, top-level
managers play a significant role in the mobilization of outside resources
and are accountable to the shareholders and public.
The board of directors is
typically primarily composed of non-executives which owe a fiduciary duty to
shareholders and are not closely involved in the day-to-day activities of
the organization, although this varies depending on the type (e.g., public
versus private), size and culture of the organization. These directors are
theoretically liable for breaches of that duty and typically insured under
directors and officers liability insurance. Fortune 500 directors are
estimated to spend 4.4 hours per week on board duties, and median
compensation was $212,512 in 2010. The board sets corporate strategy, makes
major decisions such as major acquisitions, and hires, evaluates, and fires
the top-level manager (Chief Executive Officer or CEO) and the CEO typically
hires other positions. However, board involvement in the hiring of other
positions such as the Chief Financial Officer (CFO) has increased. In 2013,
a survey of over 160 CEOs and directors of public and private companies
found that the top weaknesses of CEOs were "mentoring skills" and "board
engagement", and 10% of companies never evaluated the CEO. The board may
also have certain employees (e.g., internal auditors) report to them or
directly hire independent contractors; for example, the board (through the
audit committee) typically selects the auditor.
Helpful skills of top management
vary by the type of organization but typically include a broad understanding
competition, world economies, and politics. In addition, the CEO is
responsible for executing and determining (within the board's framework) the
broad policies of the organization. Executive management accomplishes the
day-to-day details, including: instructions for preparation of department
budgets, procedures, schedules; appointment of middle level executives such
as department managers; coordination of departments; media and governmental
relations; and shareholder communication.
Middle-level managers
Consist of general managers,
branch managers and department managers. They are accountable to the top
management for their department's function. They devote more time to
organizational and directional functions. Their roles can be emphasized as
executing organizational plans in conformance with the company's policies
and the objectives of the top management, they define and discuss
information and policies from top management to lower management, and most
importantly, they inspire and provide guidance to lower level managers
towards better performance. Their functions include:
First-level managers
Consist of supervisors, section
leads, foremen, etc. They focus on controlling and directing. They usually
have the responsibility of assigning employees tasks, guiding and
supervising employees on day-to-day activities, ensuring quality and
quantity production, making recommendations, suggestions, and up channeling
employee problems, etc. First-level managers are role models for employees
that provide:
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