How do executives in a HQ(headquarter) of a company supervise the company without even staying in the places of factories where work is going on (warehouses, factories, etc)?
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Numbers… it’s all numbers. Most are based in fantasy or “ideal market conditions” and rarely relate to the field level. It all comes down to profit these days. If a part of the company doesn’t produce the right numbers to produce the right income, that’s when “downsizing” or “restructuring” happens. All in an attempt to get the numbers where they should be. Numbers. Numbers. Numbers.
Executives aren’t focused on the specific processes that take place in an individual factory/warehouse. The staff working in that factory, their managers, and the directors over them care about the details of that location and likely the directors only care if things are terribly off. As you get higher you care, “is X factory producing Y value?” Then as you get even higher in large companies it would be “Is the repair business producing Z value?”. If it’s not, the executive tasks the directors to sort it out. They work with managers and (in an ideal world) the line workers to create and implement a plan. The executive doesn’t have the time or interest to understand those details at that point.
Delegation and reports. A high level executive isn’t going to hang out in the steel mill watching to make sure everyone does their jobs. Instead the workers will have a manager on site who does that. That manager will report to the mill boss, who in turn reports to a district manager in charge of a bunch of mills, and then the district managers will report to the high level executive.
On the high level they care about how all the mills are doing in the sense of hitting their expected productivity. They don’t know or care if Bob is slacking on the production line, they care if the mill is underperforming.
Each level of that chain of command only reports to those above them and directs those below them. If a mill is underperforming then the district manager will chew out the mill boss and get them to fix the problem. The district manager doesn’t know or care that it is Bob’s fault, figuring that out is delegated down the chain.
As everyone else has been saying it’s all in the numbers. Generally a too level boss (CEO, CFO, EVP) is going to be focused on top level issues, like how the company should move forward or what they should do to stay ahead of their competition, and on maintaining the current things the company is doing, with VPs focused on each aspect.
As an example, I used to drive for a delivery company, so I would be told each day what to deliver and where. My supervisor made sure I did my job and talked to me if there were issues; his boss (the manager) would take to him if our depot was not making enough deliveries on time; the manager was in charge of several supervisors, if one of the depot’s continued to do poorly, her boss, the territory manager would talk to her. The territory manager reported to the VP of transportation about how all of his managers territories we’re doing. The VP of transportation would then explain to the CFO and CEO why his territory managers needed more money to run things better and what they could expect to get for a certain amount of money. The CEO and EVPs decide if transportation, or storage, or sales or marketing or a new business would get more money or if the drivers need to start dropping off flyers with each delivery. Those decisions then make the opposite trip down the chain until everyone who needs to know knows.
Separating executives from the daily running of a factory has historically been considered the most efficient way to run a business. However recently this practice has come under more scrutiny, particularly for high tech rapidly evolving businesses.
Many people think one major reason why Boeing had well known poor design problems with their 737Max and other planes is because their executives are in Chicago while the planes are made in other states. Both Tesla and SpaceX are examples of rapidly moving high tech businesses where executives work on the factory floor not in isolated offices. So maybe things are changing.
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