What Are Management Teams? Definition and How To Build Them

By Indeed Editorial Team

April 22, 2021

As a business grows, entrepreneurs and business owners may find themselves challenged by filling multiple high-level roles. This could include the accounting, marketing, sales and general business strategy of the entire company. Creating a management team to help delegate roles and responsibilities is an important step for expanding a business. In this article, we discuss the definition and purpose of management teams, list common varieties of management teams and help you understand how business owners build management teams with a step-by-step guide.

Related: Your Guide To Successful Delegation and Team Management

What is a management team?

A management team is a group of high-level associates hired by a business owner to take on essential responsibilities within the business. These individuals make up the highest levels of management within a company or business, and each specializes in a different area of managing a business, such as:

  • Accounting

  • Marketing

  • Sales

  • Business strategy

  • Operations

What is the purpose of a management team?

Management teams help business owners delegate tasks they may not be able to complete on their own as their company expands. Not only does a management team increase productivity by dividing up the responsibilities of running a business, but the members of the team may also bring valuable skills and knowledge that the business owner may not possess.

What are the different types of management teams?

Management teams take on different functions and include different positions, depending on the type of business they're created to run. Below are a few examples of management teams that different businesses can build:

Related: Working Well on a Team: Types of Teams and Tips For Finding Team Success

Executive management teams

This type of management team is most commonly found in the corporate world and reports directly to the CEO of a company or business. The members of an executive management team usually include:

  • Chief executive officer (CEO): These individuals are the top manager of a company. They oversee each member of their management team and general staff and make final decisions on budget, hiring, firing, marketing strategies and sales techniques. Often, they are the owners of a business, but a business owner may choose to hire a CEO as a part of a management team. Although CEOs oversee general operations, they often rely on a highly skilled management team for support, advice and opinions.

  • Chief financial officer (CFO): CFOs manage all aspects related to money and accounting within a business or company. They create budgets and financial strategies and implement systems to track and manage a company's funds. Often, CFOs bring valuable high-level accounting and finance skills to a company's management team.

  • Chief marketing officer (CMO): These individuals oversee a company's marketing strategy. CMOs help position a company or product toward their target audience, differentiate a brand from the competition and oversee the execution of a company's marketing strategy.

  • Chief operations officer (COO): COOs administer complex operations within a company or business. The COO decides which data to analyze in order to ensure a smoothly run business and which changes to implement when problems occur.

Governance body management teams

Governance body management teams provide oversight, control and direction for organizations and programs. This type of management team is most commonly found among nonprofits and charitable organizations, but they exist in corporate and business settings as well. Their primary function is to control the allocation and disbursement of funds according to a set of defined protocols.

For example, a governance body management team of a nonprofit may require that in order to request project funding, team members and volunteers must provide a clear timeline and budget of the project for which they're requesting funds.

Functional management teams

This type of management team is similar to executive management teams, but are typically smaller and more departmental in nature. The managers of departments such as sales, accounting, human resources, operations or technology may form management teams that report to the heads of their departments.

For example, marketing managers may report on a weekly basis to the head of the marketing department to discuss strategy.

Related: 8 Steps To Building a Successful Team

How to build a management team

Below are common steps business owners follow when deciding how to build a management team:

1. Decide which type of management team is the best fit

Choosing which type of management team is best for a specific company, business or organization is an important step toward building a successful management team. Typically, business owners will consider their current business strategy, goals and hiring budget before deciding on the structure of their management team.

2. Decide which roles need to be filled

Choosing which roles to fill and how to fill them ensures business owners that their company could benefit under the direction of a management team. During this stage, business owners will typically look to fill roles that they cannot manage themselves.

For example, a business owner with extensive marketing experience but few accounting skills may choose to act as a CMO but hire an individual to act as a CFO.

Related: How To Become CEO of a Company

3. Find team members

When business owners begin the search for candidates to add to their management teams, they have a variety of methods to choose from:

  • Internet job sites

  • Classified ads

  • Networking through personal and professional connections

Another option available to business owners filling positions on their management team is to employ the help of an executive search firm. These firms present business owners with pre-screened candidates and are a great way to ensure low-risk hiring.

4. Find the right rapport

Most business owners seek to fill their management teams with trustworthy, compatible candidates. It's equally as important that business owners get along with their management team as it is that the members of the management team get along with each other. When the business and its management team have positive professional interactions, they can work more cohesively as a group and increase productivity and profits. Some business owners may use personality assessments during the hiring process to ensure their team members are compatible.

5. Match positions with skills and abilities

When hiring individuals to fill the various roles on a management team, most business owners try to match the skills and abilities of candidates with positions that benefit the most from their expertise.

Some business owners include behavioral description questions in their interviews instead of asking questions about knowledge, principles or hypothetical scenarios. This type of question requires the candidate to describe a specific event or situation from a previous position and gives business owners more accurate information about their specific skills, traits and abilities. Having an accurate understanding of a candidate's unique capabilities allows business owners to more effectively match them with a position.

6. Delegate clear responsibilities

Often, members of a management team are more likely to thrive if they fully understand their specific duties and responsibilities. Many business owners find writing job descriptions for each team member to be a helpful technique when deciding the specific responsibilities of each role. Not only does this help a business owner to more effectively organize their ideas about how each member of the management team will function within the company, it also acts as a reference point for team members in the early stages of their employment.

7. Foster company culture

Business owners often set the tone for company culture, ethics and atmosphere. Before letting their management team function at full capacity, many business owners take time to consider the company culture they wish to see among their staff. Fostering a healthy and supportive company culture can prevent future tension, arguments or disagreements and help business owners know how to handle them should they arise. Many business owners will begin this process by setting a good example and interacting with their management team the way they would like them to interact with each other.

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