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6.3: Organizing

  • Page ID
    4011
  • Learning Objective

    1. Discuss various options for organizing a business, and create an organization chart.

    Now that you’ve developed a strategic plan for Notes-4-You, you need to organize your company so that it can implement your plan. A manager engaged in organizing allocates resources (people, equipment, and money) to achieve a company’s plans. Successful managers make sure that all the activities identified in the planning process are assigned to some person, department, or team and that everyone has the resources needed to perform assigned activities.

    Levels of Management: How Managers Are Organized

    A typical organization has several layers of management. Think of these layers as forming a pyramid like the one in Figure 6.3 “Levels of Management”, with top managers occupying the narrow space at the peak, first-line managers the broad base, and middle-managers the levels in between. As you move up the pyramid, management positions get more demanding, but they carry more authority and responsibility (along with more power, prestige, and pay). Top managers spend most of their time in planning and decision making, while first-line managers focus on day-to-day operations. For obvious reasons, there are far more people with positions at the base of the pyramid than there are with jobs at the other two levels (as you get to the top, there are only a few positions). Let’s look at each management level in more detail.

    Figure 6.3 Levels of Management

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    Top Managers

    Top managers are responsible for the health and performance of the organization. They set the objectives, or performance targets, designed to direct all the activities that must be performed if the company is going to fulfill its mission. Top-level executives routinely scan the external environment for opportunities and threats, and they redirect company efforts when needed. They spend a considerable portion of their time planning and making major decisions. They represent the company in important dealings with other businesses and government agencies, and they promote it to the public. Job titles at this level typically include chief executive officer (CEO), chief financial officer (CFO), chief operating officer (COO), president, and vice president.

    Middle Managers

    As the name implies, middle managers are in the “middle” of the management hierarchy: They report to top management and oversee the activities of first-line managers. They’re responsible for developing and implementing activities and allocating the resources needed to achieve the objectives set by top management. Common job titles include operations manager, division manager, plant manager, and branch manager.

    First-Line Managers

    First-line managers supervise employees and coordinate their activities to make sure that the work performed throughout the company is consistent with the plans of both top and middle management. They’re less involved in planning than higher-level managers and more involved in day-to-day operations. It’s at this level that most people acquire their first managerial experience. The job titles vary considerably but include such designations as department head, group leader, office manager, foreman, and supervisor.

    Let’s take a quick survey of the management hierarchy at Notes-4-You. As president, you are, of course, a member of top management, and you’re responsible for the overall performance of your company. You spend much of your time setting objectives, or performance targets, to ensure that the company meets the goals you’ve set for it—increased sales, higher-quality notes, and timely distribution.

    Several middle managers report to you, including your operations manager. As a middle manager, this individual focuses on implementing two of your objectives: producing high-quality notes and distributing them to customers in a timely manner. To accomplish this task, the operations manager oversees the work of two first-line managers—the note-taking supervisor and the copying supervisor. Each first-line manager supervises several non-managerial employees to make sure that their work is consistent with the plans devised by top and middle management.