MANAGEMENT SKILLS Chapter 11

OBJECTIVES  Explain how horizontally organized companies differ from vertically organized companies  Name the 3 levels of management in a vertically organized company  Explain how self management teams function

STANDARD  Marketing 2 Standard 3: - Distinguish the differences between horizontally and vertically organized companies. Explain how self management teams function.

MANAGEMENT STRUCTURES

MANAGEMENT  The business function of planning, organizing, and controlling all available resources to achieve company goals  Horizontal  Vertical

VERTICAL ORGANIZATION  A hierarchical, up-and-down, organizational structure in which the tasks and responsibilities of each level are clearly defined  In large, traditional companies, managers reported to higher levels of management  Responsible for the proper operation of a particular department

MANAGEMENT LEVELS  Top Management: people that make decisions that affect the whole company  CEO, president, COO, CFO, CMO, and VP  Set a direction for the company as a whole, identifying resources & methods for meeting goals, and controlling the systems & structures of the company

MANAGEMENT LEVELS  Middle Management: implement the decisions of top management  Plans how the departments under them can work to reach top managements goals  Supervised by top management  Involves implementation more than it does supervision  They monitor the effectiveness of the plans they implement

MANAGEMENT LEVELS  Supervisory-Level Management: supervise the employees who actually carry out the tasks determined by middle & top management  Assign duties, monitor day-to-day activities in their dept., & evaluate work of production or service employees  Set priorities for departments, work to keep within budgets, & monitor teams’ workflow  Supervised by middle management

HORIZONTAL ORGANIZATION  Top management shares decision making with self-managing teams of workers who set their own goals and make their own decisions

SELF-MANAGING TEAMS  Levels of management are eliminated  Number of supervisors is reduced  Gather information, analyze it, and take collective action  Responsible for making decisions, completing tasks, & coordinating their activities with other groups in the company  Empowerment reinforces team spirit, contributes to company loyalty, and increases productivity & profit

ORGANIZATION BY PROCESS  Self-Managing Teams are organized around particular processes  Developing new products or providing customer support  Teams made up of people with different specializations replace functional divisions  Like finance dept or engineering dept  On a product development team, employees may research market trends, while others may be experts in technology or budgeting & finance, but they all work TOGETHER to make new products.

CUSTOMER ORIENTATION  In vertical organizations, workers look to mgmt. for direction  In horizontal companies, workers focus on the customer  You can buy Starbuck’s Coffee beans in Starbuck’s Coffee shops; or you can go get it at a grocery store  Different marketing teams within Starbuck’s focus on different types of customers  Managers have direct access to customer feedback  Ideal result is to have satisfied customers, high productivity, large profits, and contented investors

MATRIX MANAGEMENT  A cross between vertical and horizontal types of management with features borrowed from both types  Individual employees are responsible to a supervisor in their department (vertical) and to their team (horizontal)  Places employees where they are most needed

 Why is switching from vertical to horizontal organization called flattening the organization?  The management structure has fewer levels, but each level is broader  From a company’s point of view, what is an advantage to horizontal organization?  The company saves money because there are fewer managers, and productivity typically increases as employees feel more empowered  Do you think that horizontal organization could work in a high school? Why or why not?