Author: Constantin Măgdălina, Emerging Trends & Technologies Expert
Within a company, there are leaders who are strategic decision-makers and leaders who are decision-makers at operational level. The first are top management while later are middle management. Their views are often convergent, but sometimes they may differ regarding the company's evolution. These differences arise when one and the other are asked about the estimate of turnover, profit, investment, employee numbers, or wages for the next year, as the consulting company Valoria did in Business Outlook in 2018. The results are following: Only 11% of top executives forecast a 10% -20% turnover increase in 2018
Top management of respondents seems to be more reserved than middle management. Only 7% of top managers say the company's turnover will grow by over 30% while 9% of middle managers say this. The difference is even greater on the + 10% - + 20% growth range where only 11% of top managers see this increase in turnover while 21% of middle managers see the same. The opinions of the two management categories are relatively similar for the + 5% - + 10% increase in turnover, top management (31%) vs. middle management (30%). Expectations to increase profits are similar to top and middle management
In terms of profit, top management and middle management have roughly the same view. The only two notable differences relate to profit growth over the range of + 10% - + 20%, top management 11% vs. middle management 17% and the expectation that profit will stagnate for 10% of top top managers and 6% of middle managers. The pessimism of profit decline is equally shared by top and middle management around 13%. Major differences between top and middle management arise when forecasting investments
Regarding the investment, there is the greatest discrepancy between top management and middle management opinions. While middle management is more confident (16% vs 5% top management) on the top range of + 10% - + 20% (7% vs 4% top management) or + 20% - + 30% (10% vs. 1% top management) and on the over + 30% benchmark, compared to middle management, top management predicts higher + 1% - + 5% investment growth (40% vs. 21% middle management). Middle managers want a larger increase in the number of employees in 2018
18% of the top executives of respondents estimate growth between + 5% - + 20% of the number of employees compared to 26% of middle managers and 40% of top management say they expect an increase of + 1% to +5 % of the number of employees vs. 31% of middle management who say the same thing. At the same time, 19% of top management vs 23% middle management says there will be a 0% increase in the number of employees. Top managers are more reserved in terms of wage growth this year
More optimistic growth is seen all the way through ranges by middle management than top management. The biggest difference is on the growth range of + 5% - + 10% where only 5% of top managers compared with 33% of middle managers say wages will increase. Important differences between top management (13%) and middle management (36%) are also on the growth scale of + 1% - + 5%, but even more interestingly, on the salary drop range of -1% -5% 19% of top management vs. 2% of middle management says salaries will drop.
So there are sometimes very important differences of opinion between top management and middle management of companies. Top management looks for the decision horizon line with a wider reference framework. Middle management considers the internal operating environment and stage wins by achieving performance indicators. The highly volatile and unpredictable environment, coupled with greater responsibility, created the conservative decision-making reflex at top management level. Middle management bets more because it has less to lose. Differences in perception between top management and middle management are actually a difference in decision-making impact.
About Constantin Măgdălina
Constantin Măgdălina has a 8 years working experience, while he performed in multinationals both in Romania and abroad. Constantin owns a Master in Marketing and Business Communication at the Academy of Economic Studies Bucharest. He is certified Lean Six Sigma and ITIL which provide him a good understanding of processes and transformations within organizations. The Chartered Institute of Marketing certification furthered on complemented his expertise and knowledge in business. In those over 4 years working activity in a Big4 company, he initiated and conducted studies which analyzed different aspects related to the business environment in Romania such as the economic growth predictions of companies in 2013-2016, knowledge management, the buying experience in the age of digital consumers, social media 2013-2015, the utilization of mobile devices in Romania. He is the author of numerous articles on topics related to innovation, the efficiency of business processes, social media, the consumers’ buying experience in the age of digital, trends and emergent technologies. He is invited as speaker at numerous events and business conferences.