Managers function in a number of roles including leading, sharing information, and making decisions. How often they play a particular role depends on the level they occupy and the type of organization. We’ll talk about the differences between top managers, middle managers, first-line managers, and team leaders.
Vertical management, also called top-down management, refers to the various levels of management within an organization. Managers at different levels are free to focus on different aspects of the business, from strategic thinking to communicating information to operational efficiency. During the nineteenth century and much of the twentieth century, vertical management was highly structured with many layers of management (as depicted by a pyramid). In industries where processes and conditions are stable and where ongoing innovation is less critical, the vertical structure of management can still be very efficient. Workers in labor-intensive industries such as manufacturing, transportation, and construction need to follow established procedures and meet specific goals. Everyone knows who is in charge and assumes the job they do today will be the same next year or in five years.
A main disadvantage of vertical management is that it limits information flow from the lower levels of the organization to the upper levels (like water, information flows downhill easily). Without easy two-way communication, top management can become isolated and out of touch with how its plans affect core processes in the organization. It also fosters vertical thinking. Vertical thinking refers to using traditional and recognized methods to solve particular problems. It is the opposite of “thinking outside of the box.” The digital age exposed the shortcomings of management that addressed problems in formal or bureaucratic approaches at the expense of creativity and innovation. Today, many organizations use “flatter” structures, with fewer levels between the company’s chief executives and the employee base. Most organizations, however, still have four basic levels of management: top, middle, first line, and team leaders.
As you would expect, top-level managers (or top managers) are the “bosses” of the organization. They have titles such as chief executive officer (CEO), chief operations officer (COO), chief marketing officer (CMO), chief technology officer (CTO), and chief financial officer (CFO). A new executive position known as the chief compliance officer (CCO) is showing up on many organizational charts in response to the demands of the government to comply with complex rules and regulations. Depending on the size and type of organization, executive vice presidents and division heads would also be part of the top management team. The relative importance of these positions varies according to the type of organization they head. For example, in a pharmaceutical firm, the CCO may report directly to the CEO or to the board of directors.
Top managers are ultimately responsible for the long-term success of the organization. They set long-term goals and define strategies to achieve them. They pay careful attention to the external environment of the organization: the economy, proposals for laws that would affect profits, stakeholder demands, and consumer and public relations. They will make the decisions that affect the whole company such as financial investments, mergers and acquisitions, partnerships and strategic alliances, and changes to the brand or product line of the organization.
Middle managers have titles like department head, director, and chief supervisor. They are links between the top managers and the first-line managers and have one or two levels below them. Middle managers receive broad strategic plans from top managers and turn them into operational blueprints with specific objectives and programs for first-line managers. They also encourage, support, and foster talented employees within the organization. An important function of middle managers is providing leadership, both in implementing top manager directives and in enabling first-line managers to support teams and effectively report both positive performances and obstacles to meeting objectives.
First-line managers are the entry level of management, the individuals “on the line” and in the closest contact with the workers. They are directly responsible for making sure that organizational objectives and plans are implemented effectively. They may be called assistant managers, shift managers, foremen, section chiefs, or office managers. First-line managers are focused almost exclusively on the internal issues of the organization and are the first to see problems with the operation of the business, such as untrained labor, poor quality materials, machinery breakdowns, or new procedures that slow down production. It is essential that they communicate regularly with middle management.
A team leader is a special kind of manager who may be appointed to manage a particular task or activity. The team leader reports to a first-line or middle manager. Responsibilities of the team leader include developing timelines, making specific work assignments, providing needed training to team members, communicating clear instructions, and generally ensuring that the team is operating at peak efficiency. Once the task is complete, the team leader position may be eliminated and a new team may be formed to complete a different task.
We have discussed the types (levels) of managers and some of their responsibilities but not their specific activities. All managers must be comfortable with three main types of activities or roles. To do their jobs, managers assume these different roles. No manager stays in any one role all of the time, but shifts back and forth. These roles are leadership (or interpersonal), informational, and decision making. They were written about in detail in the 1970s by Henry Mintzberg, a professor at McGill University in Canada. His classifications are still one of the most studied descriptors of management roles today.
Leadership and Interpersonal Roles
Which type of manager spends more time in leadership activities? The short answer is all effective managers display leadership characteristics. Leadership is the ability to communicate a vision and inspire people to embrace that vision.
Top managers are often required to fulfill what Mintzberg described as figurehead activities. They are the public face of the management team and represent the business in legal, economic, and social forums. Middle managers are also leaders, although their focus may be more on interpersonal skills, such as motivating employees, negotiating salaries, and encouraging innovation and creativity. First-line managers lead both by example when they actively participate in the tasks assigned to their workers and by modeling the policies and work ethics of the organization.
Informational roles involve the receiving and sending of information—whether as a spokesperson, a mentor, a trainer, or an administrator. A top manager is a voice of the organization and has to be aware that even personal opinions will reflect (for better or worse) on the business. With the free flow of information on the Internet, it is very difficult for top managers to separate their personal identities from their corporate positions. For example, there was a consumer backlash in 2017 when Uber CEO Travis Kalanick accepted a seat on President Trump’s economic advisory council. Kalanick initially said that he was “going to use [his] position on the council to stand up for what’s right.” He resigned a few days later in response to the protest.
Middle managers must skillfully determine what information from top management should be shared with others, how it should be interpreted, and how it should be presented. Similarly, they must weigh the value of information they receive from first-line managers and employees in order to decide what to forward to top management. If transmitted information tends to be untrue or trivial, then the manager will be viewed as a nonreliable source and his or her opinions discounted.
The informational role for first-line managers is primarily one of disseminating what they have been given and helping the employees to see how their own contributions further organizational goals. They have a responsibility to see that the employees understand what they need to be successful in their jobs.
Decision Making Roles
All managers are required to make decisions, but managers at different levels make different kinds of decisions. According to Mintzberg, there are four primary types of management decision roles. These include the following:
To summarize, managers must play many roles. Some are better than others in particular roles and will tend to be called on for those jobs. Putting a diverse management team in place will ensure that the organization has enough managers to meet most challenges.
Check Your Understanding
Answer the question(s) below to see how well you understand the topics covered in the previous section. This short quiz does not count toward your grade in the class, and you can retake it an unlimited number of times.
Use this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.