Types of Managers - Principles of Management

Managers are found at multiple levels in an organization. They may lead an entire organization as Rose Marie Bravo did at Burberry; or they may head functions, departments, or units.

Types of Managers in Principles of Management

There are three main types of managers: general managers, functional managers, and frontline managers. General managers are responsible for the overall performance of an organization or one of its major self-contained subunits or divisions.

Functional managers lead a particular function or a subunit within a function. They are responsible for a task, activity, or operation such as accounting, marketing, sales, R&D, production, information technology, or logistics. Frontline managers manage employees who are themselves not managers. They are found at the lowest level of the management hierarchy.

For illustration, consider a large diversified enterprise like General Electric. General Electric is active in many different businesses: Among other things, it makes jet engines, power plants, medical equipment, railway locomotives, and lighting products. GE also sells insurance, owns NBC, and offers a wide range of financial services, particularly to industrial customers. GE is organized into different business divisions, and each division has its own functions, such as R&D, production, marketing, sales, and customer services.

GE is thus known as a multidivisional enterprise. Multidivisional enterprises like GE have four main levels of management: the corporate level, the business level, the functional level, and frontline managers. General managers are found at the corporate and business levels. Functional managers are found within the divisions where they manage functions or subunits within those functions. Frontline managers are found deep within functions managing teams of nonmanagement employees.

multidivisional enterprise

CORPORATE-LEVEL GENERAL MANAGERS

The principal general manager at the corporate level is the chief executive officer (CEO), wholeads the entire enterprise. In a multidivisional enterprise the CEO formulates strategies that span businesses—deciding, for example, whether to enter new businesses through acquisitions or whether to exit a business area. The CEO decides how the enterprise should be organized into different divisions and signs off on major strategic initiatives proposed by the heads of divisions. The CEO exercises control over divisions, monitoring their performance and deciding what incentives to give divisional heads. Finally, the CEO helps develop the human capital of the enterprise.

At General Electric Jeffery Immelt has been the CEO since 2001. Immelt has articulated a grand vision that includes pushing GE into environmentally friendly technologies. Immelt is doing this because he thinks it makes good business sense. He believes that tighter environmental standards are inevitable, that environmentally friendly technologies are also cost-efficient, and that customers will increasingly demand them.

Thus GE is investing in more fuel-efficient locomotives and jet engines; coal-based power plants that use technologies to strip almost all pollutants out; technologies for sequestering carbon dioxide emissions; water purificationsystems; and power-generating windmills. Under Immelt GE is also exiting some businesses that do not fit his strategic vision, including GE’s insurance business, which he sold to Swiss Reinsurance Co. in 2006 for $6.8 billion.

The CEO of a corporation also manages relationships with the people who own the company— its shareholders. The CEO reports to the board ofdirectors, whose primary function is to make sure the strategy of the company is consistent with the best interests of shareholders. The CEO also normally sits on the board and spends considerable time describing company strategy to shareholders.

Members of the top management team help the CEO in all of this. The team normally includes a chief financial officer (CFO), who is responsible for the overall financing of the corporation. It may also include a chief operating officer (COO), who makes sure operations are run efficiently within the company; and in some high-technology enterprises a chief technology officer (CTO) is responsible for developing new technologies and products within the corporation.

BUSINESS-LEVEL GENERAL MANAGERS

With a multi divisional enterprise such as General Electric, business-level general managershead the different divisions. GE has general managers running its power generation business, medical equipment business, lighting business, and so on. These general managers report directly to Jeffery Immelt. Within an organization that is active in just one line of business, such as Burberry or Starbucks, the business and corporate levels are the same.

Business-level general managers lead their divisions—motivating, influencing, and directing their subordinates—and are responsible for divisional performance. Business-level general managers translate the overall strategic vision for the corporation into concrete strategies and plans for their units. Thus the head of GE’s locomotive business, together with that team, has formulated strategies for making locomotives more environmentally friendly.

These include the development of diesel locomotives with lower emissions and hybrid diesel–electric engines. Business-level managers often have considerable latitude to develop and implement strategies that they believe will improve the performance of their divisions, so long as those strategies are consistent with the overall goals and vision for the entire corporation.

Businesslevel general managers organize operations within their division, deciding how best to divide tasks into functions and departments and how to coordinate those subunits so that strategy can be successfully implemented. Business-level general managers also control activities within their divisions, monitoring performance against goals, intervening to take corrective action when necessary, and developing human capital.

FUNCTIONAL MANAGERS

Below general managers we find functional managers, who are responsible for specific business functions that constitute a company or one of its divisions. Thus a functional manager’s sphere of responsibility is generally confined to one organizational activity (purchasing, marketing, production, or the like), whereas general managers oversee the operation of the entire company or a self-contained division.

The head of each function leads that function. Functional managers motivate, influence, and direct others within their areas. Although they are not responsible for the overall performance of the organization, functional managers nevertheless have a major strategic role: to develop functional strategies and draft plans in their areas that help fulfill the strategic objectives set by business- and corporate-level general managers.

In GE’s aerospace business,for instance, manufacturing managers develop manufacturing strategies consistent with the corporate objective of producing environmentally friendly products and generating high performance.

They might, for example, decide to implement process improvement programs to improve quality and boost employee productivity. Moreover, functional managers provide most of the information that makes it possible for business- and corporate-level general managers to formulate realistic and attainable strategies. Indeed, because they are closer to customers than are typical general managers, functional managers themselves may generate important ideas that subsequently may become major strategies for the company.

Thus it is important for general managers to listen closely to the ideas of their functional managers. An equally great responsibility for managers at the functional level is strategy implementation: the execution of corporate- and business-level strategies.

The heads of functions are responsible for developing human capital within their organizations. They also organize their functions into subunits such as departments or teams; exercise control over those subunits; set goals; monitor performance; provide feedback; and make adjustments if necessary. Thus the manufacturing function might be further subdivided into departments responsible for specific aspects of the manufacturing process.

There might be a procurement department, a production planning department, an inventory management department, and a quality assurance department. Each department will have its own managers, who report to their superiors, the functional heads; those managers will be responsible for leading their units, organizing and controlling them as necessary, strategizing for the tasks under their control, and developing employees within their units.

FRONTLINE MANAGERS

Furthest down the management hierarchy are frontline managers, who manage employees who are themselves not managers. A frontline sales manager might manage 10 salespeople; a frontline manager in manufacturing might manage a work group of employees who physically assemble a product; and a frontline engineering manager in a software company might manage a group of developers writing computer code.

Most complex organizations have many frontline managers. For example, the oil and energy company BP has some 10,000 frontline managers who oversee 80 percent of the organization’s 100,000 employees.

They work in every part of the company— from solar plants in Spain to drilling rigs in the North Sea and marketing teams in Chicago. Their decisions, in aggregate, have an enormous impact on BP’s performance. 13 Most successful managers begin their managerial careers as frontline managers. In this job they encounter the realities of management, which as we will see in the next section often differ from their expectations.

Frontline managers are critical to maintaining the performance of an organization. They lead their teams and units. They strategize about the best way to do things in their units and about the best strategies for their functions and the company. They plan how best to perform the tasks of their units. They organize tasks within their teams, monitor the performance of their subordinates, and try to develop the skills of their subordinates.

As we saw in the case of Tim Jones at Starbucks, who was a frontline manager responsible for the performance of an individual store, frontline managers can have an impact significantly beyond their jobs. In some cases they can influence the destiny of an entire organization.


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