Work is defined as moving objects at or near the surface of the earth, or telling others to do so. The first is uncomfortable and ill paid, the second is more enjoyable and better paid. – Old Joke (which isn’t as funny in the new economy).

Management is actually the job of coordinating effort so that an organization can perform better as a group than the individuals can working on their own.

If you think about that sentence, you’ll discover that the point of management is performance, in other words the goal is results. And you’ll see that the tools at management’s disposal are the tools of coordination: prioritization, allocating resources, communication, support. You’ll also see that a lot hinges on your definition of the word “better.”

Briefly, the three levels of management are these:

Foreman
This is the name usually used in factories or construction work – but it applies everywhere. It’s a person in charge of a small crew who is also a worker on that crew. It addition to doing the work, the foreman is responsible for leadership and intra-crew decisions such as scheduling, making sure the crew has enough supplies, etc. But the foreman cannot change the direction or makeup of the crew nor can he/she make major decisions about the crew’s assignments. The foreman is usually given a task for the crew to perform – he helps organize the crew to accomplish the task, but can’t modify the task.

Executive or Middle Management
These managers are responsible for organizing others to accomplish tasks. They are usually given (or help define) goals and they decide / prioritize the tasks needed to accomplish those goals. Then they work to assign ways that the tasks can be accomplished within constraints of budget, staffing levels, equipment etc. Middle management is often responsible for coordination between groups. In practice many managers (especially in technical fields) divide their time between actually doing management work and being workers or foremen (doing other work that needs to be done).

Upper Management
This level is responsible for setting strategic direction, and also is concerned with how to best utilize funds, new product decisions, how to read and address trends in the market place. Profitability goals and long term vs short term trade offs are the purview of this level of management, as are exit strategy decisions.

Foreman or 1st level managers tend to ask When? What? and Where? because they are responsible for getting stuff done. Middle managers ask How? and Who? because they are given a goal and have to muster resources and assign them often within budgetary constraints. Top level mgmt asks WHY? because they are responsible for the strategic purpose of what is being done.

Takeaways:

• In small companies people wear many different hats. The same person may wear hats at each level of management. This can be confusing.
• Too often, the owner is mostly doing foreman level work. Middle or Executive management is only done in response to a problem or crisis and Upper level strategic work done almost never. This is a mistake
• The tools of the executive (middle and upper management) are meetings and reports. Many small business owners don’t know how to use these tools or believe they are not needed because of the small number, or close proximity of employees. They are wrong.