Apparel Industry Management

Apparel Industry Management 3(3+0)

Lesson 5 : Top, Middle and Lower Management

Constituents of Top Management

Top-management is often described as the policy-making group responsible for the overall direction and success of all company activities. Three important constituents of top-management are:

1. Share holders: In corporate form of organization shareholders are the real owners because they invest their financial resources in the organization. They have, therefore, the authority for overall management. But as the shareholders are from a prince to a pauper without any organization of their own and are scattered over long distances, it is not practicable for them take part in day-to-day management of the organization. As such, they elect from among themselves some members as directors who are collectively known as what we call ‘Board of Directors.’ The shareholders exercise control through the Board of Directors: they analyse the working of the organization in their meetings and give suggestions for the progress and prosperity of the concern.
2. Board of Directors: Board is the trustee of the organization the objectives and policies which are implemented by middle management. It is not generally executive in nature. Sometimes directors are full-time executives of the organization and in that case they perform dual role of directors and executives.
3. Chief Executive: It is for him to issue instructions for executive action, initiate the whole process of management and take all necessary steps for carrying into effect the policy laid down by the Board. The Chief Executive has a complex and difficult rule, involving overall management of the enterprise, overall operations and public relationships. This work can be organized by creating one position, the chief executive, to be accountable for all activities. Assistants are created as required.

However, the better method, except in the very small company, is to split the function into two or more positions, those of the chief executive and chief operating officer. The chief executive is responsible for overall planning, organizing, motivating, co-ordinating and controlling. The chief operating officer is delegated responsibility for the line operations. Each executive has reporting to him the appropriate special staff agencies. A further elaboration is an additional split to form a chief staff officer position. Here all staff positions report to one executive. Thus, the chief executive has only two people reporting to him. Various modifications of these basic groups are used successfully in many well-organised companies. A fourth arrangement of the top executive function is use of a group of executives. In this system, chief executive consists of a group of various executives in the form of a committee or committees, such as finance committee, management committee, budget committee, etc. The committee is appointed by the Board and discharges all the functions of the chief executive.