A Definitive Guide to Top Management: Definition and Duties
By Indeed Editorial Team
Published November 30, 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Management within organizations has many levels and tasks that it undertakes. One part of management called top management is an integral part of any organization with a management structure, particularly in industries that provide goods and services to consumers. Knowing what top management is can help you achieve your goals as a professional, understand the basic hierarchy of organizations and develop an overall sense of the people that help organizations run efficiently. In this article, we discuss what top management is, specific positions in top management, responsibilities of those positions and important characteristics of top management professionals.
Related: What Is Management?
What is top management?
Top management, sometimes called senior management is a person or group of people who direct and control an organization from its highest level. Top management is the people who hold the resources, authority and decision-making power of an organization and are the ones who control what changes occur within the organization. There is no set standard of which positions of an organization are top management, but the definition of top management states that anyone in these positions is aware of their responsibilities, is knowledgeable about their organization and is engaged in the management system at all levels of the organization.
Despite the lack of standard positions for top management, many organizations include the following four categories:
Organization owners include founders and shareholders that have a significant portion of the organization under their control. Founders are the people the originally create an organization and because of this, they are often making crucial decisions about it, especially early in an organization's lifetime. Shareholders often decide aspects of an organization such as what power directors have, changing an organization's constitution and observing and approving financial proposals for the organization. Shareholders may also appoint and remove people to critical positions within the organization such as director positions, c-level executives and upper-level management and create the overall mission of the organization.
Board of directors
A board of directors is a group of representatives that make decisions for an organization based on the shareholders they represent. They often have direct experience in the industry the organization is part of and provide oversight of activities the organization pursues. The decisions that a board of directors undertakes are typically ones related to long-term planning and goals, instead of day-to-day decisions handled by other top management professionals. A board of directors sometimes has the power to recruit and evaluate upper management and executives within an organization. This can include the president and vice-president and c-level executives.
C-level executives are the highest level of day-to-day management within an organization. They make critical decisions for the organization in order to create and increase profits for the owners. There are several c-level executive positions which include:
Chief executive officer: The highest c-level officer, this position has the responsibility of overseeing an organization, creating top-level policies and plans, establishing goals and making final decisions on plans, strategies and projects.
Chief operating officer: The second-highest c-level officer, this position has the responsibility of ensuring day-to-day operations run efficiently and the organization executes its plans and strategies correctly.
Chief financial officer: The finance and accounting departments of an organization report to this executive, which handles budgeting, forecasting, and long-term financial planning for the organization.
Chief information officer: This position oversees the overall technology department and all computer and information systems within an organization. They may select hardware and software to meet organizational needs and update existing systems the organization uses.
Chief technology officer: This position oversees the information systems and technology departments. Some organizations only have a chief information or chief technology officer, as their duties are very similar.
Chief marketing officer: This position oversees the marketing department. Its responsibilities include managing the organization's brand, culture, products and overall appearance to consumers and other organizations.
Chief human resources officer: This position oversees the human resources department. Its responsibilities include creating an excellent hiring process, training new members of the organization, increasing retention and encouraging employee development.
Related: What Is a CEO?
The president and vice-president
The president and vice-president of an organization are often responsible for being the liaisons between different departments within an organization. Instead of focusing on one area of the organization, these positions may communicate and share information with a wide variety of an organization's upper-level management. They may also communicate directly with stakeholders and shareholders within and outside of the organization because they have the most holistic view of the organization and its daily processes. These positions often have similar tasks as the c-level executives, but can focus on different departments as needed to help the organization succeed.
What are the responsibilities of top management?
There are many responsibilities that top management professionals have. As mentioned above, different top management positions have different tasks that they attend to, but overall there are some responsibilities the entire group collectively share including:
Being accountable for the quantity and quality of product and service output for the organization.
Establishing overall quality and quantity goals, designing procedures to follow to ensure those goals and creating methods to exceed those goals for the entire organization.
Encouraging the implementation and adherence to risk-based decision-making to maximize profit and minimize risk for an organization.
Maintaining an appropriate level of resources for the organization to use for creating, testing and marketing its goods and services.
Communicating to all levels of the organization to promote the importance of excellent quality products and services and ensure the effective use of quality assurance metrics.
Encouraging improvement processes for individuals and the organization to support the organization's overall mission.
Ensuring the filling of open positions within the organization and communicating when changes to the status of positions occur.
Setting the culture of the organization and improving the morale of employees at all levels.
Creating procedures for managers to interact with and encourage employees.
Designing procedures for challenges in the workplace and large industry.
Providing a model to follow for other members of the organization at all levels.
Characteristics of top management
In order to be successful as a top management professional, there are several important characteristics to have, detailed below:
1. Leadership skills and experience
One of the most important traits for top management professionals to have is leadership. These include a positive attitude, flexibility, communication and the willingness to take on a task and show how it works for the benefit of others. You can gain these skills by attending a training series about them, reading about other leaders in your industry and others and finding a mentor within your organization. Gaining leadership experience can take time and involves finding lower leadership positions and testing your ideas in them. Having a lot of leadership experience can help you pursue top management positions. Skills include:
2. Organizational focus
A second characteristic for top management professionals to have is an organizational focus. This is the ability to recognize an opportunity for an organization and pursue it as your priority. This may mean putting your own development second, but over a long-term period, your success as a leader for the organization can grow and help you achieve your professional and personal goals. Having the ability to see opportunities and share your ideas can help an organization grow because you contribute new ideas. You can also have other leaders in the organization have this focus, which can lead to extensive growth.
3. Resilience and perseverance
People aren't perfect and sometimes you may encounter challenges as a top management professional including failure in or more of your projects and initiatives. While this may seem daunting, being able to learn from your mistakes and failures is an integral part of remaining within top management. Others can see how hard you work and how you adapted your ideas to find solutions and can copy what you're doing to help the organization grow. This skill can also help you in your personal life because you know how to cultivate failure and gain a lot of knowledge for new ideas.
4. Energy to continue despite challenges
Sometimes, you may encounter challenges from external sources. Being able to see them, plan for them and ultimately overcome them is crucial for anyone in top management. One skill you can develop is creating procedures within the organization to respond to unprecedented challenges. This can help you and the organization save time and resources as new challenges develop and allow you to recover more quickly than others, leading to increased efficiency and a boost in profits. You may also develop processes for improvement that help the organization continue to grow and change as needed to remain a top industry leader.
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