Micromanaging at a small business

I’m a newly hired department head at a small family business with over 200 workers. The matriarch is the chief executive officer (CEO). The problem is that she requires every petty cash disbursement to be approved by her. Department managers are not given discretionary authority for small things. Almost everything must have the CEO’s approval, even leave applications. Isn’t this another form of micromanagement that reduces the authority of managers? — Frustrated Heart.

That means you have not done your homework before accepting the job. Your situation is typical of many family-owned small businesses. But that’s OK. I’ve seen it happen almost everywhere, even in medium-sized corporations. In certain cases, every single transaction must bear the CEO’s signature, with nearly no exceptions.

It’s one reason why the CEO’s table is often a mess and that it takes people several days to obtain approval. That’s not happening in many dynamic organizations that empowers and trusts managers to exercise their problem-solving and decision-making skills.

They typically have levels of authority that are well-defined among senior executives, department managers, and first-level supervisors. Levels of authority are based on factors like the size of the company, the hierarchical structure, financial capacity, volume of daily transactions and other issues.

As a control measure, limitations vary by executive, who hold varying degrees of power and decision-making authority. Another reason for this is to distribute the tasks to trusted executives. In your case, I suppose that’s also happening with the CEO co-signing with its chief financial officer (CFO) who could be the matriarch’s son or daughter.

In a major organization, the CEO and CFO may co-sign for up to $500,000 per transaction, for example, while senior vice-presidents, first vice-presidents, vice-presidents, and assistant vice-presidents may co-sign any transaction worth not more than $300,000, and directors, managers, and assistant managers have the authority to approve $200,000 per transaction. In certain cases, the limits lower than that.

In general, however, supervisors, assistant supervisors, and line leaders don’t have any authority except to make recommendations and execute all instructions from their superiors, except when they are empowered to make simple decisions that don’t require expenditure.

For example, deciding on administrative matters like work schedules, leave applications, reassigning people to other departments, managing conflict among the workers, and handling employee discipline.

MICROMANAGEMENT?What can you do? Frankly speaking, there’s nothing you can do, unless you are brave enough to bring the matter to the CEO, who may consider your action to be out of bounds. Different organizations, big and small, have their own policies and standards, including having all financial transactions, regardless of their value, be run past the CEO.

Therefore, think hard before rocking the boat. Anyway, it’s not a death sentence. Instead, focus on how you can excel in doing your job. In due time, you may become part of the trusted family circle, even if you’re not related to them by blood. If you’ve shown your capacity, sooner or later, you may work towards changing their management style, and become one of the trusted signatories.

Now, here’s a question: Would you prefer a bird in your hand or two in the bush out there? You know what I mean. Play it safe. Control your emotions. Endure their current practices even if doesn’t match your management style. After all, having a job with few oddities is better than nothing.

To put this in concrete terms, would you rather have a lucrative job where you’re not trusted (like other department managers) or receiving less in an organization that treats you like a family member who is given a decent authority to sign many documents representing important transactions?

THINKING“Thinking is more exhausting than sensing,” says Rolf Dobelli in The Art of Thinking Clearly (2013). Rational consideration requires more willpower than simply giving in to intuition. In other words, intuitive people tend to scrutinize less. This mindset is supported by Israeli-American psychologist Daniel Kahneman (1934-2024).

In his book Thinking, Fast and Slow (2013), Professor Kahneman who was awarded the 2002 Nobel Memorial Prize in Economic Sciences (with Vernon Smith) makes a distinction between fast and slow thinking. Fast thinking is called System 1 which is intuitive and emotional.

On the other hand, System 2 is about slow thinking which is more deliberative and logical.

In your particular case, would you rather be emotional or logical? The choice is yours. If you’re less than pleased with the governance style of your CEO, then what would you do? Is it her way or the highway?

Bring Rey Elbo’s leadership program called “Superior Subordinate Supervision” to your management team and discover the three root causes (style, system, and situation) in every workplace issue. E-mail elbonomics@gmail.com or via https://reyelbo.com for free consultation. Anonymity is guaranteed.