10 Reasons Mangers Are Important in Business Organization

By Indeed Editorial Team

Published September 29, 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.

Business organizational structure is essential to creating an efficient environment in a company. Many organizational structures have a role for managers to provide leadership and direction to their subordinates. Learning how you can use managers to improve your business organization can help you increase your company's productivity. In this article, we explain what business organization is and list 10 reasons why managers are important in a business organization.

Read more: What Is a Manager?

What is business organization?

Business organization is the structure of a business, which determines how information and instruction flow from one department or level to another. Business structure can affect how quickly companies make decisions and how much support each employee has. Different business structures work better for different companies, depending on their type of work and employees' work processes. Choosing a structure that fits your company may improve communication and help manage expectations. Regardless of the organization of a business, many use managers to facilitate communication between the upper tiers of management and their employees.

Here are some examples of business organizations:

  • Hierarchical organization: One owner or manager is at the head of the business, making decisions for different levels of management in a pyramid-like structure.

  • Functional organization: One owner or manager makes decisions and communicates them to department heads, who oversee employees organized by their function at the company.

  • Horizontal, or flat, organization: One manager or owner communicates directly with each employee, without department heads or team leaders.

  • Divisional organization: Each division is in control of making its own decisions, with independent directors for each department, and may be responsible for a specific industry or geographical location.

  • Team-based organization: This organizational structure groups employees into teams based on their skills, which encourages organization between departments and gives control to individual teams.

Read more: Organizational Structure: Definition and Types

10 reasons why managers are important in a businesses organization

Managers are essential for the organization and operation of a business structure. Here are 10 reasons managers are important for successfully conducting business:

1. Planning team actions

Managers can provide leadership to their teams, providing a purpose and direction that employees can trust. They help employees reach their goals and handle the daily production and processes of a business. They also plan the next steps for managing projects and potential hires. Creating a plan helps a team stay organized and complete tasks efficiently, and having someone set the direction for the team can create an environment of continual growth.

Related: Manager vs. Senior Manager: What's the Difference?

2. Setting goals

Managers can set goals for teams and individual employees. By giving their employees something to accomplish, a manager may help them grow in their positions and improve their productivity. Managers are usually familiar with the industry and the tasks they assign to employees. This means they often have a deeper understanding of what a team can accomplish and can set attainable goals to build morale. By facilitating the growth of each employee and the entire team, a manager can create a positive environment of constant improvement that aligns with their plan for the team.

3. Organizing teams

Managers can organize coworkers who have similar work styles and can work together professionally into successful teams. One duty of a manager is to oversee their teams and ensure that the team can succeed in the environment the manager creates. Here are some initiatives managers can take to organize their teams:

  • Encourage teamwork by monitoring the attitudes of their coworkers and assigning teams

  • Incorporate team-bonding exercises to give workers a chance to get to know each other

  • Lead team-building experiences or mediation to ensure that teams are working together optimally

  • Guide recruitment by identifying skills to look for in a new team member

  • Lead team development and resource training to improve the skill sets of team members

Related: 5 Major Conflict Management Styles for Successful Managers

4. Using resources

Managers can be partially responsible for their employees' performances, which includes making sure they have the resources they need. This can mean they streamline the allocation of resources and do market research to learn about new software or business processes that can improve their employees' workloads. Managers may also share the needs of their team with higher levels of management and make cost-effective decisions that continuously improve the performance and production of their team.

Related: 13 Management Roles With Tips for Improving Management Skills

5. Providing accountability

Employees often rely on their managers to monitor their performances and the expectations set for them. This accountability can be an essential aspect of facilitating growth for an employee. Managers can also help by communicating with other departments about the work that affects the team to support their employees.

6. Improving staffing

Managers usually contribute to the staffing processes on their teams. If a company has a human resources department, managers can assist by determining what the team can improve on and provide a list of needs and skills that the hiring manager can look for in a new employee. By having a deeper understanding of how a team functions and what its purpose is, a manager can be more specific about what the hiring manager should look for in candidates. They also usually oversee the training of new team members.

7. Prioritizing work

Many managers assign work to their employees based on deadlines and priority. Employees can focus on the details of the tasks their managers assign, and managers can focus on the entire plan for the team or company's growth. Managers typically oversee employees and create a plan for the growth of their team, department or company. This means that the manager can decide what tasks to prioritize over others, which helps ensure the team focuses on growth and improvement.

Related: New to Management: 20 Tips for New Managers

8. Facilitating communication

A manager can be the point of communication for other departments or the owners and CEOs of a company. Managers help spread information between different levels of the company efficiently, which is important because successful teams often need communication that flows between employers and employees. Managers can also help facilitate communication between coworkers to resolve issues.

Related: What Is Management?

9. Maintaining momentum

Managers can motivate their employees by providing positive feedback on their performance, creating community within the organization and inspiring their employees. Managers often strive to ensure employees feel supported and satisfied so that the team can continue to improve. Motivation to improve can create momentum on a team, which might lead to increased production or profits. Managers can create momentum in their employees by instituting some of the following initiatives:

  • Increasing pay

  • Improving working conditions

  • Instituting rewards systems

  • Recognizing impressive work

  • Improving company culture

Related: Change Management Methodology: 13 Methodologies To Manage Change

10. Providing stability

A manager provides stability to their employees, which may increase job satisfaction and reduce turnover. As a company's success or workload fluctuates, or as it institutes new initiatives, managers can help employees feel stable in their jobs or give them confidence in the tasks they're being assigned. Managers can also advise employees and provide explanations and direction to keep employees satisfied and focused on their performance. This stability may help a company adapt to changing circumstances with ease.


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