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?