Levels of Management, Planning Types, & Core Entrepreneurial Competencies

Planning & Its Role in Management

• Planning is the prerequisite to “doing”; it provides the blueprint / road-map that guides every managerial action.
• Serves two key managerial functions simultaneously:
  • Direction–setting: identifies standards and expected performance outcomes.
  • Control: establishes criteria against which actual results are measured.
• Minimises uncertainty, risks, threats, doubts, & worries by forcing explicit forethought.
• Three integrated plan layers must be crafted by entrepreneurs/managers:
  • Strategic (long-term, created by Top Mgmt.)
  • Tactical (medium-term, created by Middle Mgmt.)
  • Operational (short-term, created by Lower Mgmt.)
• Ethical / practical implication: well-designed plans ensure resources aren’t wasted and stakeholders remain protected even when the external environment shifts.

The Three Levels of Management

• Organisations are vertically divided to clarify authority, responsibility & information flow.

Top-Level Management (TLM)

• Also called the administrative or executive apex.
• Primary authority over overall function, image, direction & performance of the organisation.
• Typical positions: Chief Executive Officer, President, Managing Director, Chair/ Vice-Chair, General Manager, Deputy GM.
• Key duties:
  • Formulate formal, long-term Strategic Plans.
  • Allocate organisational resources at the broadest scope.
  • Coordinate & guide lower managerial tiers.
  • Conduct high-level environment analyses (e.g., SWOT) to anticipate threats & opportunities.

Middle-Level Management (MLM)

• Also called the executory or backbone level.
• Comprised of functional / departmental heads (Production Mgr, Marketing Mgr, Finance Mgr, Procurement Mgr, etc.).
• Subordinate to TLM yet superior to Lower-Level Mgmt; acts as mediator & communicator in the scalar chain.
• Key duties:
  • Translate strategic goals into departmental Tactical Plans.
  • Execute policies, monitor progress & report back to TLM.
  • Train & control lower managers; inspire junior staff.
  • Prepare progress reports and recommend adjustments.

Lower-Level Management (LLM)

• Also called the operating, supervisory or front-line level.
• Positions include Supervisors, Foremen, Sales Officers, Accounts Officers, Section Officers, Superintendents.
• Directly manage operative employees & daily routines.
• Key duties:
  • Develop and implement very detailed Operational Plans.
  • Assign tasks, set short-term deadlines, ensure resource sufficiency.
  • Provide immediate feedback upward on execution problems.

Types of Plans & Their Characteristics

Illustration (house-building metaphor):

• Strategic Plan = full architectural blueprint.
• Tactical Plans = section-specific blueprints (foundation, roof, tiles).
• Operational Plans = step-by-step instructions (lay bricks, install windows).

Key Managerial & Functional Skill Domains

Financial Management

• Definition: planning, organising & controlling money to maximise profit & sustain long-term health.
• Core sub-functions:
  • Cash-flow management (track inflows from sales & investments vs outflows for expenses).
  • Budgeting: departments submit detailed $\text{SMART}$ (Specific, Measurable, Achievable, Relevant, Time-bound) budget requests.
  • Forecasting: predict future performance from historical data & trends.
  • Financial analysis: produce and interpret Balance Sheet, Income Statement & Cash-Flow; compute liquidity, solvency & profitability ratios.
  • Trend & comparative (benchmark) analysis for continuous improvement.

Resource Management (Broad)

• Encompasses financial, human, technological & natural/biological assets.
• Activities:
  • Inventory & quality assessment of all resources.
  • Forecast future needs in line with strategic priorities.
  • Allocate resources optimally to projects / departments.
  • Monitor utilisation, adapt to dynamic market changes.
• Biological assets example: living plants/animals that generate raw materials for finished goods.

Human Resource Management (HRM)

• Strategic handling of the entire employee life-cycle.
• Components:
  • Recruitment & Selection (job analysis, sourcing, screening, interviews, tests, background checks).
  • Onboarding & Orientation.
  • Training & Development (needs assessment, customised programs, effectiveness measurement).
  • Compensation & Benefits (competitive wage structures within legal minimums, health, retirement, SSS, performance incentives).
  • Performance Evaluation & Career Progression.
• Overseen in the Philippines by the Department of Labor & Employment (DOLE).

Customer Relationship Management (CRM)

• Goal: build strong ties with current customers (retention) & attract new customers (acquisition).
• Retention drives loyalty and word-of-mouth referrals; acquisition expands market share.
• Tools include databases, personalised communications, loyalty programs, feedback loops.

Production & Distribution

• Production: transform inputs into finished goods via processes (assembly, fabrication, packaging) with quality control and inventory management.
• Distribution: move goods from factory to consumer.
  • Warehousing, transportation, logistics coordination.
  • Channel design: Direct vs Indirect (intermediaries).
  • Customer-service handling for delivery issues.

Promotions & Advertising

• Promotion = short-term incentives to spur immediate action (discounts, BOGO, contests, samples, bundling, loyalty points) and clear excess inventory.
• Advertising = paid, sustained communication to build brand awareness, positioning & emotional connection.
  • Media: TV, radio, print, outdoor, online banners, social media, influencer tie-ups.
  • Even iconic brands (e.g., “Colgate”) continue advertising to cement mind-share.

Entrepreneurial Competencies & Mindsets

• These cross-disciplinary skills underpin sustained enterprise success.

Proactive Orientation

• Act before confrontation or crisis occurs; anticipate internal & external changes.
• Techniques: Forecasting (market, financial, technological) & Contingency Planning.
  • Contingency Plan = predefined course of action for “what-if” scenarios (e.g., full website data backup to counter hacking).

Agent of Change

• Champions new processes, structures, business models; facilitates smooth adoption & realises intended value.
• Drives societal advances in living standards, convenience, & comfort.

Risk-Taking

• Entrepreneurs bear highest risk but potentially reap highest reward.
• Necessitates formal Risk Management System: identify, evaluate & mitigate economic, operational, legal & market risks.

Sharp Eye for Opportunities

• Convert problems into profit potential (e.g., water-lily overgrowth → raw material for handicrafts).
• Maintains curiosity & continuous environmental scanning.

Decisiveness

• Ability to make quick, firm, effective choices despite uncertainty.
• Critical in planning (goals, resources, task assignment) & crisis moments.

Emotional Balance / Self-Control

• Stay calm & clear-headed under stress; manage impulses so business decisions remain rational.
• Essential because entrepreneurship is akin to “calculated gambling.”

Innovativeness

• Continuous improvement in products, processes, methods & strategies to adapt to changing customer preferences and technological shifts.

Organisational Hierarchy & Communication Flow

• Scalar chain runs $\text{Top} \rightarrow \text{Middle} \rightarrow \text{Lower} \rightarrow \text{Operatives}$.
• Maintaining this hierarchy:
  • Clarifies roles & responsibilities.
  • Preserves discipline & cooperation.
  • Reduces managerial burden & confusion.

Integrated Summary of Timeframes & Alignment

• Strategic (TLM): Vision, Mission, broad $5\text{ yr}+$ horizon → sets destination.
• Tactical (MLM): Dept. plans $1-3\text{ yr}$ → maps departmental route in line with strategy.
• Operational (LLM): Daily/weekly tasks <1\text{ yr} → executes the journey mile-by-mile.
• Continuous feedback loops ensure operational realities inform tactical adjustments, which in turn inform strategic revisions.