23rd Dec 2009


When growing your business, your management structure becomes more important as your company grows. When you’re starting out, and while your company is small, you may be able to fulfill all roles in the management hierarchy. If you have a scalable, successful business however, growth is inevitable, and you will need to have managers at different levels to ensure work is completed in the most effective and efficient manner possible. This said, it is important to understand the 3 major types of managers in growing and/or larger companies.

Organizations employ three levels of managers: first-line managers, middle managers, and top managers. They are arranged in a hierarchy of authority, and each has different, but related, responsibilities. These three types of
managers are grouped into departments (or functions). A department is a group of people who work together and possess similar skills or use the same skill sets to perform their jobs.

1. First-line managers are responsible for the daily supervision of nonmanagerial employees.

2. Middle managers supervise first-line managers. They also work with first line managers to identify new ways of reaching organizational goals. Very often, the suggestions that they make to top management can dramatically increase organizational performance.

3. Top managers are responsible for the performance of all departments and therefore have a cross-departmental responsibility. Because top management is ultimately responsible for the success or failure of the organization, persons inside and outside of the organization closely scrutinize their performance. It is the CEO’s responsibility to build a top management team that performs well. The term COO (chief operating officer) is often used to refer to the top manager who is being groomed to take over when the current CEO leaves the company or retires.

Recall that management is the planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently. The relative importance of each ‘phase’–planning, organizing, leading and controlling–varies according to managerial level. Top managers devote most of their time to planning and organizing. CEOs and COOs, for example, need to carefully think about and plan a company’s strategy because there is a lot of risk if mistakes are made. Lower level managers devote more time to leading and controlling.

Planning, organizing, leading, and controlling are all very important management functions needed to grow a successful business. Part of all management consulting services is to ensure an organization’s management fulfills all of these functions to be effective. As I mentioned earlier though, as a company grows, single managers may find themselves spread out too thinly and will not be able to perform as well as they used to. Thus, it’s important to take note that different types of managers can focus on the different management functions required to produce great results.

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