Chief executive officer, executive vice president for marketing, department store manager, financial institution president, brokerage office manager, college president, school superintendent, and police chief these are examples of general managers and top executives who, at the upper end of the management hierarchy, formulate the policies and direct the operations of the Nation's private firms and government agencies. (Top executives who formulate policy in public administration are discussed in detail in the Handbook statement on government chief executives and legislators.)
The fundamental objectives of private organizations are to maintain efficiency and profitability in the face of shifting consumer tastes and needs, accelerating technological complexity, economic interdependence, and domestic and foreign competition. Similarly, nonprofit organizations and government agencies must effectively implement programs subject to budgetary constraints and shifting public preferences. General managers and top executives try to ensure that their organizations meet these objectives.
An organization's general goals and policies are established by the chief executive officer in collaboration with other top executives, usually executive vice presidents, and often with a board of directors. In a large corporation, a chief executive officer may frequently meet with top executives of other corporations, domestic or foreign governments, or outside consultants to discuss matters affecting the organization's policies. Although the chief executive officer retains ultimate authority and responsibility, the chief operating officer may be delegated the authority to oversee executive vice presidents who direct the activities of various departments and are responsible for implementing the organization's policies in these departments.
The scope of executive vice presidents' responsibility depends greatly upon the size of the organization. In large corporations, their duties may be highly specialized. For example, they may oversee general managers of marketing, sales promotion, purchasing, finance, personnel, training, industrial relations, administrative services, electronic data processing, property management, transportation, or legal services departments. (Some of these and other managerial occupations are discussed elsewhere in this section of the Handbook.) In smaller firms, an executive vice president might be responsible for a number of these departments.
General managers, in turn, direct their individual department's activities within the framework of the organization's overall plan. With the help of supervisory managers and their staffs, general managers oversee and strive to motivate workers to achieve their department's goals as rapidly and economically as possible. In smaller organizations, such as independent retail stores or small manufacturers, a general manager may be responsible for purchasing, hiring, training, quality control, and all other day-to-day supervisory duties. (See the Handbook statement on retail managers.)
Corporate restructuring and downsizing will limit employment growth among general managers and top executives.
General managers in large firms or government agencies are provided with offices close to the departments they direct and to the top executives to whom they report. Top executives may be provided with spacious offices and often meet and negotiate with top executives from other corporations, government, or other countries. Long hours, including evenings and weekends, are the rule for most top executives and general managers, though their schedules may be flexible. Though still uncommon, more executives are accepting temporary positions, sometimes only working for the duration of one project or several months.
Substantial travel is often required. General managers may travel between national, regional, and local offices to monitor operations and meet with other executives. Top executives may travel to meet with their counterparts in other corporations in the country or overseas. Many attend meetings and conferences that are sponsored by industries and associations and provide invaluable opportunities to meet with peers and keep abreast of technological and other developments. Perquisites such as reimbursement of an accompanying spouse's travel expenses may help executives cope with frequent or extended periods away from home.
In large corporations, job transfers between the parent company and its local offices or subsidiaries, here or abroad, are common.
With increasing domestic and international competition, general managers and top executives are under intense pressure to attain, for example, ever higher production and marketing goals. Executives in charge of poorly performing companies or departments often find that their jobs are in jeopardy.
General managers and top executives held nearly 2.9 million jobs in 1992. They are found in every industry wholesale and retail trade and services industries employ over 6 out of 10 general managers and top executives.
The educational background of managers and top executives varies as widely as the nature of their diverse responsibilities. Many general managers and top executives have a bachelor's degree in liberal arts or business administration. Their major often is related to the departments they direct for example, accounting for a general manager of finance or computer science for a general manager of information systems. Graduate and professional degrees are common. Many managers in administrative, marketing, financial, and manufacturing activities have a master's degree in business administration. Managers in highly technical manufacturing and research activities often have a master's or doctoral degree in an engineering or scientific discipline. A law degree is mandatory for general managers of corporate legal departments, and hospital administrators generally have a master's degree in health services administration or business administration. (For additional information, see the Handbook statement on health services managers.) College presidents and school superintendents generally have a doctorate, often in education administration; some have a law degree. (See the Handbook statement on education administrators.) On the other hand, in some industries, such as retail trade, competent individuals without a college degree may become general managers.
Many general managers in the public sector have a liberal arts degree in public administration or in one of the social sciences such as economics, psychology, sociology, or urban studies. For others, experience is still the primary qualification. For park superintendents, a liberal arts degree also provides a suitable background. Police chiefs are graduates of police academies, and a degree in police science or a related field is increasingly important. Similarly, fire chiefs are graduates of fire academies, and a degree in fire science is gaining in importance as well. For harbormasters, a high school education and experience as a harbor pilot are sufficient.
Most general manager and top executive positions are filled by promoting experienced, lower level managers. Some companies prefer that their top execuitves have specialized backgrounds in finance or marketing, for example. However, certain qualities, including leadership, self-confidence, motivation, decisiveness, flexibility, the ability to communicate effectively, and sound business judgment are far more important. In small firms, where the number of positions is limited, advancement to a higher management position may come slowly. In large firms, promotions may occur more quickly.
Advancement may be accelerated by participation in company training programs to broaden knowledge of company policy and operations. Attendance at national or local training programs sponsored by numerous industry and trade associations and continuing education, normally at company expense, in colleges and universities can familiarize managers with the latest developments in management techniques. Every year, thousands of senior managers, who often have some experience in a particular field such as accounting, engineering, or science, attend executive development programs to facilitate their promotion from functional specialists to general managers. In addition, participation in interdisciplinary conferences and seminars can expand knowledge of national and international issues influencing the manager's firm.
Persons interested in becoming general managers and top executives must have highly developed personal skills. A highly analytical mind able to quickly assess large amounts of information and data is very important. The ability to consider and evaluate the interrelationships of numerous factors and to select the best course of action is imperative. In the absence of sufficient information, sound intuitive judgment is crucial to reaching favorable decisions. General managers and top executives also must be able to communicate clearly and persuasively with customers, subordinates, and other managers in their firm.
General managers may advance to top executive positions, such as executive or administrative vice president, in their own firm or to a corresponding general manager position in a larger firm. Similarly, top-level managers may advance to peak corporate positions chief operating officer and, finally, chief executive officer. Chief executive officers and other top executives may also become members of the board of directors of one or more firms. Some general managers and top executives with sufficient capital and experience establish their own firms or become independent consultants.
Employment of general managers and top executives is expected to grow more slowly than the average for all occupations through the year 2005 as companies restructure managerial hierarchies in an effort to cut costs. General managers and top executives may be more affected by these cost-cutting strategies than in the past, thus moderating employment growth.
Although this is a large occupation, and many openings will occur each year as executives transfer to other positions, start their own businesses, or retire, competition for top managerial jobs will be keen. Many executives who leave their jobs transfer to other executive or managerial positions, limiting openings for new entrants, and large numbers of layoffs resulting from downsizing and restructuring will lead to an ample supply of competent managers. Moreover, the aging of the workforce will result in more senior middle managers vying for a limited number of top executive positions.
Projected employment growth of general managers and top executives varies widely among industries. For example, employment growth is expected to be faster than average in all services industries combined, but slower than average in all finance, insurance, and real estate industries combined. Employment of general managers and top executives is projected to decline in manufacturing industries overall.
Managers whose accomplishments reflect strong leadership qualities and the ability to improve the efficiency or competitive position of their organizations will have the best opportunities in all industries. In an increasingly global economy, certain types of experience, such as international economics, marketing, or information systems, or knowledge of several disciplines, will also be advantageous.
General managers and top executives are among the highest paid workers in the Nation. However, salary levels vary substantially depending upon the level of managerial responsibility, length of service, and type, size, and location of the firm.
At the highest level, chief executive officers (CEO) are extremely well paid. According to a survey by Fortune magazine, CEO's at 200 major companies averaged $3.2 million in 1993, including bonuses and stock awards, which are often tied to performance. According to a similar survey of 365 companies by Business Week magazine, CEO salaries and bonuses averaged $1.1 million in 1992; total compensation, including stock options and dividends, averaged $3.8 million. Salaries are related to the size of the corporation a top manager in a very large corporation can earn significantly more than a counterpart in a small firm.
Salaries also vary substantially by type and level of responsibilities and by industry. According to a salary survey by Robert Half International, a staffing services firm specializing in accounting and finance, senior vice presidents/heads of lending in banks with $1 billion and higher in assets earned about $200,000 in 1993. Based on a survey sponsored by the Society for Human Resource Management, the average base salary for top human resources managers was about $136,000 in 1993. A survey by Network World newsweekly found that upper level computer network managers including chief information officers, vice presidents, and directors averaged $83,900 in 1993; mid-level managers including network, data communications, telecommunications, and technical support managers averaged $59,400 in that year. Among top network managers, those in the health care industry were the highest paid, averaging $142,500 in 1993, while those in wholesale/retail trade were the lowest paid, averaging $56,000. Among other industries, top network managers in manufacturing/finance and utilities were among the highest paid, while those in education and government were among the lowest paid.
Company-paid insurance premiums, physical examinations, executive dining rooms, use of company cars, paid country club memberships, and expense allowances are among the benefits enjoyed by some general managers and top executives in private industry.
General managers and top executives plan, organize, direct, control, and coordinate the operations of an organization and its major departments or programs. The members of the board of directors and supervisory managers are also involved in these activities. Occupations in government with similar functions are governor, mayor, postmaster, commissioner, director, and office chief.
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Reprinted with Permission of U. S. Department of Labor