- Keen competition is expected because the prestige and high compensation of these jobs attract a substantial number of applicants.
- Top executives are among the highest paid workers; however, long hours, considerable travel, and intense pressure to succeed are common.
- The formal education and experience of top executives vary as extensively as the nature of their responsibilities, but many of these workers have at least a bachelor's degree and considerable experience.
All organizations have specific goals and objectives that they strive to meet. Top executives devise strategies and formulate policies to ensure that these goals and objectives are met. Although they have a wide range of titles—such as chief executive officer, chief operating officer, general manager, president, vice president, school superintendent, county administrator, and mayor—all formulate policies and direct the overall operations of businesses and corporations, public-sector organizations, nonprofit institutions, and other organizations.
A corporation's goals and policies are established by the chief executive officer in collaboration with other top executives. All of these principals are closely monitored by a board of directors. In a large corporation, the chief executive officer meets frequently with the other top executives to ensure that the overall operation of the corporation is conducted in accordance with these goals and policies. In a governmental or nonprofit organization, top executives oversee budgets and ensure that resources are used properly and that programs are carried out as planned. Chief executive officers in government often nominate citizens to boards and commissions, encourage business investment, and promote economic development in their communities. To do all of these varied tasks effectively, top executives rely on a staff of highly skilled personnel.
Although the chief executive officer of a corporation retains overall accountability, a chief operating officer may be delegated several responsibilities, including the authority to oversee other executives who direct the activities of various departments and implement the organization's guidelines on a day-to-day basis. In publicly held and nonprofit corporations, the board of directors or a similar governing body ultimately is accountable for the success or failure of the enterprise and the chief executive officer reports to the board. In addition to being responsible for the operational success of a company, top executives, particularly chief financial officers, are accountable for the accuracy of their financial reporting, especially among publicly traded companies.
The nature of the responsibilities of other high-level executives depends on an organization’s size. In small organizations, such as independent retail stores or small manufacturers, a partner, an owner, or a general manager often is responsible for purchasing, hiring, training, quality control, and day-to-day supervisory duties. In large organizations, top executives not only direct the overall organization, but also may be responsible for implementing strategies and setting the overall direction of a certain area of the company or organization. For example, chief financial officers direct the organization's financial goals, objectives, and budgets. They oversee the investment of funds and manage associated risks, supervise cash management activities, execute capital-raising strategies to support a firm's expansion, and deal with mergers and acquisitions.
Chief information officers are responsible for the overall technological direction of their organizations. Today, these officers are playing a more important role in organizations and are increasingly becoming part of the executive team. To perform effectively, they need knowledge of the workings of the total organization. These managers propose budgets for projects and programs and make decisions about staff training and purchases of equipment. They hire and assign computer specialists, information technology workers, and support personnel to carry out information-technology-related projects. They manage the work of these employees, review their output, and establish administrative procedures and policies. Chief information officers also provide organizations with the vision to master information technology as a competitive tool.
General and operations managers plan, direct, or coordinate the operations of companies and other public- or private-sector organizations. Their duties and responsibilities include formulating policies, managing daily operations, and planning the use of materials and human resources that are too diverse and general in nature to be classified into any one area of management or administration, such as personnel, purchasing, or administrative services. In some organizations, the tasks of general and operations managers may overlap those of chief executive officers.
Work environment. Top executives of large organizations typically have spacious offices and numerous support staff. Long hours, including evenings and weekends are standard for most top executives and general managers, although their schedules may be flexible.
To monitor operations and meet with customers, staff, and other executives, general managers and executives travel considerably among international, national, regional, and local offices. Many top executives also attend meetings and conferences sponsored by various associations. In large organizations, job transfers between local offices or subsidiaries are common for those on an executive career track.
Top executives are under intense pressure to succeed; depending on the organization, success may mean earning higher profits, providing better service, or attaining fundraising and charitable goals. Executives in charge of poorly performing organizations or departments usually find their jobs in jeopardy.
Training, Qualifications, and Advancement
The formal education and experience required by top executives vary as extensively as their responsibilities do, but many of these workers have at least a bachelor's degree and considerable experience.
Education and training. Many top executives have a bachelor's or master’s degree in business administration, liberal arts, or a more specialized discipline. The specific type and level of education required often depends on the type of organization for which top executives work. College presidents and school superintendents, for example, typically have a doctoral degree in the field in which they originally taught or in education administration.
Some top executives in the public sector have a degree in public administration or liberal arts. Others might have a more specific educational background related to their jobs.
Many top executive positions are filled from within the organization by promoting experienced lower level managers when an opening arises. In industries such as retail trade or transportation, for example, individuals without a college degree may work their way up within the company and become executives or general managers. When hiring top executives from outside the organization, those doing the hiring often prefer managers with extensive managerial experience.
Other qualifications. Top executives must have highly developed personal qualities and be able to communicate clearly and persuasively. An analytical mind, the ability to analyze large amounts of information and data quickly, and the ability to evaluate the relationships among numerous factors, also are important qualities. For managers to succeed, they need other important qualities as well, including leadership, self-confidence, motivation, decisiveness, flexibility, sound business judgment, and determination.
Certification and advancement. Advancement may be accelerated by participation in company training programs that impart a broader knowledge of company policy and operations. Participation in conferences and seminars can expand one’s knowledge of national and international issues that influence the organization and can help the participants develop a network of useful contacts. To facilitate their promotion to an even higher level, managers who have experience in a particular field, such as accounting or engineering, may attend executive development programs geared toward their backgrounds.
Managers also can help their careers by becoming familiar with the latest trends in management and by attending national or local training programs sponsored by various executive training organizations. For example, the Institute of Certified Professional Managers offers the Certified Manager (CM) credential, which is earned by completing training and passing an exam. This certification is held by individuals at all experience levels, from those seeking to enter management careers to those who are already senior executives. Certification is not necessary for advancement, but may be helpful in developing and demonstrating valuable management skills.
General managers may advance to a top executive position, such as executive vice president, in their own firm, or they may take a corresponding position in another firm. They may even advance to peak corporate positions, such as chief operating officer or chief executive officer. Chief executive officers often become members of the board of directors of one or more firms, typically as a director of their own firm and often as chair of its board of directors. Some top executives establish their own firms or become independent consultants.
Top executives held about 2.1 million jobs in 2008. Employment by detailed occupation was distributed as follows:
|General and operations managers||1,733,100|
Little to no change in employment of top executives is expected. Keen competition for jobs is expected because the prestige and high pay of these positions attract many applicants.
Employment change. Employment of top executives—including chief executives and general and operations managers—is expected to experience little to no change from 2008 to 2018. However, because these workers are essential to running companies and organizations, projected employment of top executives will vary by industry and will generally reflect the growth or decline of that industry. For example, job growth is expected in the fast-growing health services industry, while employment declines for top executives are projected for many manufacturing industries.
Employment of top executives also will be affected by the amount of consolidation occurring in a particular industry, because some management jobs typically are lost after a merger with another company. As a business grows, the number of top executives changes less than the number of employees. Therefore, top executives are not expected to experience as much employment growth as workers in the occupations they oversee.
Job prospects. Keen competition is expected for top executive positions because the prestige and high pay attract a substantial number of qualified applicants. Because this is a large occupation, numerous openings will occur each year as executives transfer to other positions, start their own businesses, or retire. However, many executives who leave their jobs transfer to other executive positions, a pattern that limits the number of job openings for new entrants to the occupation.
Experienced managers whose accomplishments reflect strong leadership qualities and the ability to improve the efficiency or competitive position of an organization will have the best opportunities. In an increasingly global economy, experience in international economics, marketing, and information systems, as well as knowledge of several languages also may be beneficial.
Top executives are among the highest paid workers in the United States. However, salary levels vary substantially, depending on level of executive responsibility; length of service; and type, size, and location of the firm, organization, or government agency. For example, a top manager in a very large corporation can earn significantly more than the mayor of a small town.
Median annual wages of general and operations managers in May 2008 were $91,570. The middle 50 percent earned between $62,900 and $137,020. Because the specific responsibilities of general and operations managers vary significantly within industries, earnings also tend to vary considerably. Median annual wages in the industries employing the largest numbers of general and operations managers were as follows:
|Computer systems design and related services||$133,140|
|Management, scientific, and technical consulting services||130,390|
|Management of companies and enterprises||113,690|
|Building equipment contractors||91,370|
Median annual wages of wage and salary chief executives in May 2008 were $158,560. Some top executives of large companies earn hundreds of thousands of dollars to more than $1 million annually, although salaries vary substantially by type and level of responsibilities and by industry. Government executives often earn considerably less.
In addition to salaries, total compensation for corporate executives often includes stock options and other performance bonuses. Among other benefits commonly enjoyed by top executives in private industry are the use of executive dining rooms and company-owned aircraft and cars, access to expense allowances, and company-paid insurance premiums and physical examinations. A number of chief executive officers also are provided with company-paid club memberships and other amenities. Nonprofit and government executives usually get fewer benefits.
For More Information
For more information on top executives, including educational programs, contact:
- American Management Association, 1601 Broadway, 6th Floor, New York, NY 10019. Internet: http://www.amanet.org
- National Management Association, 2210 Arbor Blvd., Dayton, OH 45439. Internet: http://www.nma1.org
For more information on executive financial management careers, contact:
- Financial Executives International, 200 Campus Dr., Florham Park, NJ 07932. Internet: http://www.financialexecutives.org
- Financial Management Association International, College of Business Administration, University of South Florida, 4202 East Fowler Ave., BSN 3331, Tampa, FL 33620. Internet: http://www.fma.org
For information about management skills development, including the Certified Manager (CM) credential, contact:
- Institute for Certified Professional Managers, James Madison University, MSC 5504, Harrisonburg, VA 22807. Internet: http://www.icpm.biz