Senior management, executive management, or a management team is generally a team of individuals at the highest level of management of an organization who have the day-to-day tasks of managing that organization - sometimes a company or a corporation. They hold specific executive powers delegated to them with and by authority of a board of directors and/or the shareholders. Generally, higher levels of responsibility exist, such as a board of directors and those who own the company (shareholders) - but they focus on managing the senior or executive management instead of on the day-to-day activities of the business. The executive management typically consists of the heads of a firm's product and/or geographic units and of functional executives such as the chief financial officer, the chief operating officer, and the chief strategy officer. In project management, senior management authorises the funding of projects.
Senior management are sometimes referred to, within corporations, as executive management, top management, upper management, higher management, or simply seniors.
A management team is directly responsible for managing the day-to-day operations (and profitability) of a company. Positions that are commonly considered to be part of that team include the following:
- Chief Executive Officer (CEO)
- As the top manager, the CEO is typically responsible for the entire operations of the corporation and reports directly to the chairman and board of directors. It is the CEO's responsibility to implement board decisions and initiatives and to maintain the smooth operation of the firm, with the assistance of senior management. Often, the CEO will also be designated as the company's president and will be one of the inside directors on the board (if not the chairman).
- Chief Financial Officer (CFO)
- Also reporting directly to the CEO, the CFO is responsible for analyzing and reviewing financial data, reporting financial performance, preparing budgets and monitoring expenditures and costs. The CFO is required to present this information to the board of directors at regular intervals and provide this information to shareholders and regulatory bodies such as the Securities and Exchange Commission (SEC). Also usually referred to as a senior vice president, the CFO routinely checks the corporation's financial health and integrity.
- Chief Marketing Officer (CMO)
- This corporate executive is responsible for all marketing activities of an organization. The CMO must quickly react to changing circumstances in the firm, and must shape the company's understanding of a particular product, sales strategy, or marketing idea. The CMO must be a nexus of information. Most often the position reports to the Chief executive officer. The CMO is also the Chief Influence Officer of the firm. He or she must bring the company together as one voice.
- Chief Security Officer (CSO)
- Sometimes referred to as the Chief Information Security Officer (CISO), this person can report to many different individuals, including the CEO, CFO, General Counsel, COO, and CIO. The role can be focused on many different things, with the primary purpose of keeping companies safe from physical and technological attacks. This leader role requires a strong business acumen, good technical knowledge, and capable risk manager. When the role is being established, it should be positioned in a manner that maintains a strong segregation of duties, and it's becoming increasingly frowned upon to have this role report directly to the CIO.
- Chief Information Officer (CIO)
- The CIO reports directly to the CEO and is a more internally oriented position focused on technology needed for running the company (and in IT fields, for maintaining foundational software platforms for any new applications).
- General Counsel
- The organization's chief lawyer may also be called chief legal officer (CLO). In a company, the person holding this position typically reports directly to the CEO, and their duties involve overseeing and identifying the legal issues in all departments and their interrelation, including engineering, design, marketing, sales, distribution, credit, finance, human resources, production, as well as corporate governance and business policy. This would naturally require in most cases reporting directly to the owner or CEO overseeing the very business on which the CLA is expected to be familiar with and advise on the most confidential level. This requires the CLA/CLO/General Counsel to work closely with each of the other officers, and their departments, to appropriately be aware and advise. General counsel often have broad roles encompassing crisis management, compliance reporting management and public policy advocacy. Many companies also hire in-house counsel to handle specialized tasks such as tax work, mergers and acquisitions, labor law and intellectual property, sometimes building in-house practice groups that rival the practices of major law firms.
- Chief Operations Officer (COO)
- The COO looks after issues related to marketing, sales, production and personnel. More hands-on than the CEO, the COO looks after day-to-day activities while providing feedback to the CEO. The COO is often referred to as a senior vice president.
- Chief Procurement Officer (CPO)
- The CPO an executive role focused on sourcing, procurement, and supply management for an enterprise.
- Chief Revenue Officer (CRO)
- The CRO is responsible for all revenue generation processes in an organization, and is ultimately accountable for driving better integration and alignment between all revenue-related areas.
- Chief Technology Officer (CTO)
- The CTO reports directly to the CEO and is responsible for scientific and technological issues within the organization. In some larger organizations, the CTO may report to the CIO or the CIO may report to the CTO.
- Chief Visionary Officer (CVO)
- The CVO is a high-level advisor to the CEO and other C-level executives. A CVO decides on the general direction of a company, and has a broad and comprehensive knowledge of all matters related to the business of the organization and the vision required to steer its course into the future. The CVO is generally in charge of defining corporate strategies, working plans, and often product ideas. Also has the core competencies of every other business-executive, which are used to play a role in performing aspects of the work of other C-level executives.
- Chief Human Resources Officer (CHRO)
- The CHRO, who may also be called the Chief People Officer(CPO), is the highest ranking corporate officer who oversees all aspects of human resource management and industrial relations policies, practices and operations for an organization. The CHRO receives reports from their department and determines if there should be an increase or decrease in departments, payrolls, training, etc. whilst reporting to the CEO to receive clearance or receive suggestions. They usually have degrees in Psychology or Business Management to forward the recruiting department of the company whilst overseeing the companies personnel. Also has the core competencies of every other business-executive, which are used to play a role in performing aspects of the work of other C-level executives.
- Chief Learning Officer (CLO)
- The CLO is the highest-ranking corporate officer in charge of learning management. CLOs can be experts in corporate or personal training, with degrees in education, instructional design, business or similar fields.
Top Management Teams
A top management team (TMT) is a specific form of team which typically consists of some of the top managers in a firm. However, there is no clear definition to what the top management team of an organization is. It is put together by the Chief Executive Officer (CEO) to work on a specific task. In working on this task, the team generally has a much higher responsibility and considerable autonomy than other types of teams.
Possible tasks include
- ensuring the organization is effective and successful by taking on responsibility for the implementation of an appropriate strategy that the organization can adapt to,
- effectively managing the demands of stakeholders,
- giving clear definitions of what constitutes effectiveness and success,
- ensuring the implementation of the strategy and the targeting of resources towards success
- reviewing if their actions are relevant to the organization’s overall goals.
The way TMTs are put together and work together as a team can greatly differ from other teams. This is mainly based on the fact that top managers have succeeded as individuals which often leads to a focus on functional team objectives rather than to working interdependently on a shared goal. TMTs consist of top managers from different functional areas of the firm, so they usually have different areas of expertise. Diversity and heterogeneity in teams can have a positive effect on teamwork. Nevertheless, there are also negative effects which have to be overcome as a team like not valuing different opinions and perspectives. A CEO that models valuing behavior and ensures the team has both a clear purpose and clear objectives can do just that. This also reduces social categorization effects because it leads to team members focusing more on their shared goals than on their differences.
The exchange of information during the working process is as important for TMTs as it is for all other kinds of teams. In order to work effectively, the team needs to understand how to communicate, share information, set goals, give feedback, manage conflict, engage in joint planning and task coordination and solve problems collaboratively. The CEO plays a key role in enabling the team to do so. He or she must take on the responsibility to coach the team and to reflect on their work. In their research in 2005, Simsek and colleagues found that especially a CEO’s collectivistic orientation has a positive influence on team work behavior. Collectivistic orientation means that the CEO subordinates his or her personal to the group interests and goals, emphasizes sharing and cooperation within the team and enhances task-relevant processes of team work like gathering, processing and interpreting strategic information. This in turn enhances a process called behavioral integration which was developed by Hambrick (1994). It describes the degree to which a group, here the top management team, engages in mutual and collective interaction.
Hambrick divided this concept into three parts:
(1) the level of collaborative behavior within the team,
(2) the quantity and quality of exchanged information and
(3) the emphasis on joint decision making. TMTs can face multiple difficulties which mainly derive from their individualistic views and strong opinions. It is therefore of great importance that the team works through these conflicts, creating a climate of safety, keeping their vision and mission in mind and build an appropriate work environment for themselves and the organization.
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- Menz, M. 2012. Functional Top Management Team Members: A Review, Synthesis, and Research Agenda. Journal of Management, 38(1), 45-80.
- Compare: Hankewicz, Alexander (2008-02-21). "Project Management Pitfalls". The.Project.Management.Hut. PM Hut. Retrieved 2016-09-05.
Senior Management although providing the authorization for the funding, must be seen playing an active role in providing top–down leadership for the project and participate in key decisions related to the project.
- McKinsey Quarterly: The evolving role of the CMO
- Harvard Business Review: The Rebirth of the CMO
- West, Michael A. (2012). Effective teamwork: Practical lessons from organizational research. John Wiley & Sons. pp. 241–268.
- Simsek, Zeki; Veiga, John F.; Lubatkin, Michael H.; Dino, Richard N. (2005-02-01). "Modeling the Multilevel Determinants of Top Management Team Behavioral Integration". Academy of Management Journal. 48 (1): 69–84. ISSN 0001-4273. doi:10.5465/AMJ.2005.15993139.
- Hambrick, I. (1994). "Top management groups: A conceptual integration and reconsideration ol ‘the team label". Research in organizational behavior. 15: 171–214.