Responsibilities of Senior Manager

Question: Discuss about the Responsibilities of Senior Manager. Answer: Introduction The year of 2007 is still remembered as the darkest phase of the financial history. The year broke the entire US economy and led to severe global economic crisis. There were lots of speculations about how the crisis could have been averted with the due diligence of senior level managers and crisis management experts (Reavis, 2012). The role of senior manager has been considered as very crucial in analyzing the future risks and warns the management about it, but the dark truth of a capitalist economy is that every individual who is a part of the organization and have some moral obligation and responsibility towards their shareholders and society have become profit oriented. The managers are accountable for making decisions which ensure sustainability of an organization in the long run and protect the interest of the shareholders but they are more interested in the short term financial success (Handy, 2002). The greediness to earn short term profits often results into taking unethical decisions which may create a situation of crisis for the company and for the whole economy. Summary of Managerial experience The role of a manager has been considered as an autonomous and unbiased from the other senior level executives. Though undoubtedly managers are being paid by the authorities but that doesnt change the fact that they are not only accountable to management but also to the shareholders and stakeholders of the company. I was working as a project manager in ACTS, which is a geotechnical firm in Qatar. My role was more of a middle level manager rather than a senior one but being one of the responsible individual in my department, my contribution was considered equally important in the strategic decision making which was mainly done by senior level managers. But still other senior managers dont reveal important decisions which help them to satisfy their personal profit motives. The people who are sitting at the top consider themselves as the owners and takes decision which fulfills their personal interest and not the shareholders. The role of a project manager is to check the feasibility of the project and reduce the risk involved. Since the project completion happens to be in the future there are many financial risk involved like whether the proposed price of the project will be enough to complete the project or not. There are many price escalations in material and labor in future which should be considered while proposing the project price to the customer. I have been involve involved into analyzing and choosing the right project in the company portfolio, it mainly involved corporates and government who have a very sound and stable financial position. The work doesnt stop here a manager have to identify possible risk factors that may result into default in credit payments. They have to identify these factors and perform an effective risk mitigation action plan in order to prevent any situation financial instability. There were ethical issues such as compromising in the quality of the material used to earn profits. A manager has to ensure that management does not take advantage of uninformed customers, but that is how business works. People are more concerned about earning profits. Apart from all this a manager has to manage the people working in the organization and strike coordination between all the levels of management. A manger has to manage everyone but it is a thankless job, nobody appreciates the hard work and effort. Sometimes they have to take strict decisions in critical situations but only few understand the reason for such decisions and others just criticize the decision making power of the manager. There are always people who think that they are more competent enough to be in that position and can take better decisions. In the pure capitalist economy where there are less government interventions and after the financial crisis of 2007/08 the roles and responsibilities of the senior manager have come under the light of scrutiny. They are responsible for creating a right work culture and promote ethical business practices. The positive side of being a senior level manager is that they have an authority and decision making power to implement decisions (CMI, 2014). As a manger the major task that was in front of me is to analyze the external factors and identify the possible future risks. Risk management has been a crucial concept in the US economy. Lehman brothers crisis have alarmed the authorities of financial institutions, banks and corporates who have debtors of large amount are forced to strict their credit norms regarding mortgages as the risk of bad debts are very high in such cases. The terms of payment and other legal formalities have been made quite strict. As a manager it was my responsibility to address their issues but it was not possible that each and every query gets resolved. My compan y being in the Project handling and completion business has a responsibility to maintain a high liquidity in order to pay the dues of the project because clients pay a lump sum amount at a specified time. They have to strictly follow the requirement and they clearly rejected the project if it fails to meet the financial requirement. As a manager it was my duty to inform other frontline managers and employees about the requirements. I have learnt that a manager is first an agent of the society and then of the management, the decision taken should not only satisfy the hunger of earning profit of the executives but also kept in mind the best interest of the stakeholders and shareholders (Hout Carter, 1995). Role of the senior manager in the organization Business environment is dynamic and changes continuously due to the influence of various political, economic, social factors. In order to minimize the effect of these risks on the business it is very important that these factors should be identified and analyzed carefully to make strategies to avert these risks. Here the role of senior manager comes into picture. The role of manager is not limited to manage the human and capital resources efficiently but also to foresee fluctuations in external environment and prepare business to cope with these challenges (Magretta Stone, 2003). In large organizations where the turnover is more and the operation base is large, it requires a qualified professional who can analyze every possible factors of which can affect the operations of the business and suggest the organization a proactive strategy to move ahead. A strategic decision making is required on the part of the manager to ensure sustainable growth of the organization, but often they end up taking unethical decisions either due to the pressure of senior level executives or for their personal gains. It is very important to know that a manager is not only accountable to the organization but also to the shareholders and stakeholders. The main function of the manager is to maintain a balance between the management and stakeholders of the company and take ethical decisions in the best interest of both the parties (Prahalad, 2010). The role of manager is multi-dimensional but it some of their major roles and responsibilities are: Shareholders: shareholders are known as the owners of the company. The most important role of the manager is to invest the shareholders capital in order to maximize the return on equity. The shareholders want to maximize their invested amount value but ethically. Many a times an organization in order to maintain a reputation in the society follow some unethical business practices like overstating profits or manipulate the financial information, this may satisfy the shareholders and investors for a time being but in the long run there are high chances that the company will see a downfall that will affect the shareholders adversely. This is the duty of the manager to present a true picture of the organizations performance. The shareholders wants returns but they want fair returns (Friedman, 1970). The profit should be earned but in an ethical way. The manager should ensure ethical profits and ethical returns to the shareholders in order to maximize the shareholders value (Kramer Porte r, 2011). Stakeholders: In any organization stakeholders are the groups which have a direct interest in the operations of the business. There are two types of stakeholders: Internal and external stakeholders. An external shareholder refers to the external parties such as suppliers, customers, creditors, society etc. In order to remain sustainable in the competition the decisions and policies of any organization should align with the thoughts and expectations of the shareholders. The manager should ensure customer satisfaction by offering the best price and quality. In order to earn extra profits they should not involve in unfair market practices. By creating customer value they are ensuring a loyal customer base which is very important to survive in the league of competition. The resources which an organization uses in their operations are directly derived from the society, so in return stakeholders and shareholders expect that they do something for the benefit of the society (OECD, 2014). By utilizing profits in providing job opportunity, social welfare, environment friendly business practices are some of the examples where a manager can contribute in the society. People want to be associated with the organization when they are valued in the society. Also many a times company trick prospective customers and investors because they are uninformed about the companys policies. So the manager should be transparent in the policies and procedures followed by their organization. Employees and management: Employees and management are considered as the internal shareholders of the company. In todays competitive world the only factor that distinguishes one firm from other is their human capital. The role of manager is very important when it comes to optimizing the performance of every individual working. This can only be possible when employees are satisfies. The satisfaction is a broad term it does not include the salary and wages aspect; it is much more than that. Not only shareholders have invested their money but people working there have also invested their hard work and time into the company. They expect satisfaction not only in monetary terms but also performance appraisals, promotion, recognition and appreciation from the managers. The senior level manager should make sure that each and every individual working should be satisfied so that they can contribute strategically in the long term growth of the organization (Abrams, 1951). Crisis Management- As it has been discussed above, the role of the manager is multidimensional and is not limited within a scope. The managers are known to be the forecasters of the future risks. With the use of their expertise and knowledge they analyze the future uncertainties which could affect the growth and operations of business. They form certain policies and procedures in order to minimize the effect of risk within the scope of their professional knowledge (Rawlinson, 2009) they should make sure that their decisions are complying with laws and regulations and will not give rise to an ethical issue. The main thing that should be kept in mind is that every business has certain social responsibility which they have to fulfill in order to survive in the society and this can be done by maintaining a balance between the expectations of society and management (Szczepanska, 2013). In any economy whether it is capitalistic, socialistic or mixed the senior manager role should be to ser ve the purpose of the management, stakeholders and society in the sustainable way. Many a times managers are not able to take effective decisions due to the pressure from the top level management and rigidness on the part of the workforce to adapt decisions. But to improve the management systems managers have to make strategic decisions for the sustainability of the business. The duty of every organization is to practice business in an ethical way. It is the responsibility of the senior level manager to protect shareholders interest. It has been discussed above that shareholders are true owners of the company and management should be transparent about their money being invested and profits should not be overstated to give a blind view about the companys performance. In my organization there were many such where in order to avoid dividend distribution the profits were shown understated. It is the right of the shareholders to receive a fair return on their invested money. It has been assumed by corporate executives that shareholders main aim is to maximize the profit s and increase the market value of the shares but this is not the case every time. Shareholders want sustainable profits for the growth of the organization but that too should be earned ethically. Misrepresentations of facts will contribute in the downfall of the organization someday. Their main focus is on cash flow and not extra earnings (Rappaport, 2016). The second most important responsibility of the senior manager is to ensure the rights of the stakeholders. Profits are very important for the survival in the competition but along with earning profits there are certain social responsibilities that are to be fulfilled by the management in order to create stakeholders value. Companys success and sustainability is determined by the type of relationship they have with their stakeholders. The financial products offered by my organizations require a wide knowledge about the investment decisions and financial market scenarios. There are Customers who aims to invest their wealth with a view to earn some extra returns but they dont have the knowledge about investment risks. It is the duty of executives who are dealing with the customer to inform them about every aspect of their investment decisions but sometimes they dont. A business should be fair in their dealings with customers. Also they should return back to the society in which they op erate by providing ample job opportunities and following CSR practices. The fact that US economy is facing a downturn and organizations are downsizing employees, in this case my organization too is not able to provide enough opportunities (Mallnen, 2016). The third responsibility of senior managers is towards their internal stakeholders. Employees are pillars of the organization. If they are not motivated and committed to perform better and serve the customers the customer value will decrease and the firm will not be able to survive in the society. The mangers should ensure proper working conditions for every individual working and ensure equal and just salary to every individual according to their designation. In my organization as a manager I ensure that my managerial style should become people oriented. In order to get the work done effectively being authoritative is not required, a manager should be a good listener of the problems of people and motivate them continuously to perform better. This works as a source of motivation for them and they can work productively in order to achieve the goals and objective of the organization (Forbes, 2012). The last role of manager which has been discussed is of a crisis manager. After the financial crisis of 2007/08 every financial institution not in the US but all over the world have created a risk management crisis plan in order to cope up with such crisis. Even in my organization precautionary methods have been followed such as maintaining adequate liquidity and check the credit payable capacity of every customer who wishes to take loan and pledging sufficient mortgage in case an individual failed to repay back the amount, the institution will recover back by selling the pledged property, This will ensure less non-performing assets and prevent bankruptcy in the future. But still there is a long distance to be covered when it comes to effectively creating an effective crisis management plan in the organization. Conclusions and recommendation After the financial crisis of US the role and responsibilities of investors, managers and other senior level executives were questioned. Failure to identify market risks and not formulating proper risk management plan have led to the down fall of entire US economy and its impact were seen on other countries as well. Financial institutions are the backbone of any economy in any country. In order to cope up with any market fluctuations and risks they are required to form effective crisis management plan (James Wooten). The roles of senior level managers have been considered very crucial in designing effective risk management plans (Schwabel, 2012). The steps include: Signal Detection- The senior managers are often known to be risk managers. They should identify the vulnerable areas of the organization according to the industry they work in. In banks risk of non-payment is very high, apart from this risk of currency fluctuations and government regulations also affect the banking operations. Apart from external factors they should also identify their internal weaknesses which may be their lenient credit norms which may contribute in the situation of crisis (Singh LaBrosse, 2011). Prevention of crisis- After analyzing possible risk contributing factors the senior manager should take the responsibility of being an effective leader and make a proactive plan to defend the organization from any damage. Crisis prevention plan requires resources. The manager should ensure optimum allocation of resources. The crisis plan can only be implemented if every individual in the organization is prepared for facing the situation of crisis. It is the responsibility of the manager to train the management about how to deal with the crisis effectively (Sahlman, 2009). Damage control- There is certain risks and fluctuations which cannot be foreseen nor avoided. The management can only minimize the effect of such risk on the organization by implementing effective crisis strategy. The senior level manager should be prepared for any such unforeseen external environment fluctuation and prepare a proactive strategy to limit the effect of such damage. Business recovery- After the crisis, the manager should analyze the amount of damage that has been done. After analyzing the manager along with experts and professionals should make long term and short terms recover plans in according to the extent of damage that have occurred. The steps taken to pull out company from the crisis should also be designed for every individual depending on their position in the organization. Learning and Reflecting- Though crises are bad but they are the results of organizations mistakes and behaviors. The manager should address all the mistakes, loopholes and flaws which contributed into the damage and make solid plans to prevent future crisis. The managers role in organization is non-exhaustive. They are influenced by many external factors and are answerable to management and stakeholders. They have a pressure from the management to earn profits. It is the duty of the manager to earn profits ethically and legally. The major feature of any firm facing a situation of crisis is their short term profit earning mentality but in order to survive and sustain they should focus on earning ethical profits. References Abrams, W.F (1951) Management's Responsibilities in a Complex World. Harvard Business Review. 29, 29-34. CMI (2014) Management 2020- Leadership to unlock long term growth. Chartered Management Institute, UK. Retrieved from https://www.managers.org.uk/~/media/Files/PDF/M2020/Management%202020%20-%20Leadership%20to%20unlock%20long-term%20growth on 5 February 2017. Forbes (2012) 8 Ways Leaders Can Motivate Employees Beyond Money. 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