Functions of Managers

Planning and Decisions

Planning is the most fundamental of the five management functions; without it, none of the other functions can be carried out effectively.

Learning Objectives

Identify planning as the most fundamental role of management

Key Takeaways

Key Points

  • Planning is a way to project expectations, anticipate problems, and guide decision making.
  • The planning process includes the selection of objectives, programs, or projects, and the policies and procedures needed to accomplish them.
  • Plans exist at the strategic level, the program level, and the project level.
  • It is important to review plans as conditions and circumstances change over time.

Key Terms

  • vision: An ideal or a goal toward which one aspires.
  • mission: A set of tasks that fulfills a purpose or duty; an assignment set by an employer.
  • tactic: A maneuver or action calculated to achieve some end.

What Does Planning Have to Do with Management ?

Management operates through various functions, often classified as:

  • Planning
  • Organizing
  • Staffing
  • Leading /Directing
  • Controlling /Monitoring

Of the five functions, planning is the most fundamental; it is the management form from which the other four stem. To wit:

  • A manager is ready to organize and staff only after goals and plans to reach the goals are in place.
  • Likewise, the leading function (that is, influencing the behavior of people in the organization) depends on the goals to be achieved.
  • Finally, in the controlling function, the determination of whether or not goals are being accomplished and standards are being met is based on the planning function. The planning function provides the goals and standards that drive the controlling function.

Therefore, plans are the seeds from which the organization functions. Even so, the need for planning is often apparent only after the fact. In the short run, planning is easy to postpone. The postponement of planning especially plagues labor-oriented, hands-on managers.


The Master Plan: Planning takes time, but its importance should not be overlooked.

What is Planning?

Planning is concerned with the future impact of today's decisions. It is a technique of projecting expectations, anticipating problems, and guiding decision making.

The major purpose of planning is to focus the attention of all involved on a common purpose and to inform the decisions that needs to be made along the way. A plan helps to, and serves as a way to, measure the efficiency and effectiveness of an organization in accomplishing its strategic plans.

Companies often use SWOT analysis when planning. SWOT is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. Of these four items, it is hardest for companies to control threats.

Some important planning terms, from most general to most specific, are:

  • Vision: Nonspecific directional and motivational guidance for the entire organization. Top managers normally provide a vision for the business. It is the most emotional of the four.
  • Mission: An organization's reason for being. It is concerned with scope of the business and what distinguishes this business from similar businesses. Mission reflects the culture and values of top management.
  • Objectives: Ideas that refine the mission and address key issues within the organization such as market standing, innovation, productivity, physical and financial resources, profitability, management, and worker performance and efficiency. They are expected to be general, observable, challenging, and untimed.
  • Goals: Specific statements of anticipated results that further define the organization's objectives. They are expected to be SMART: Specific, Measurable, Attainable, Rewarding, and Timed.
  • Tactics: Who, what, when, where and how activities will take place to accomplish a goal.

The Anatomy of Plans

Plans can be created for projects, programs, or strategies. During the planning process, decision makers deliberately select objectives, programs, or projects, as well as the policies and procedures for accomplishing them within organizations. The creation of plans inevitably involves decision-making, because the planner must select from among considered alternatives.

Plans can one of the following forms:

  • Prospectus
  • Blueprint
  • Proclamation
  • Budget
  • Campaign

Strategy Level, Program Level, and Project Plans

At the strategy level, plans articulate longer-term objectives and executive management's vision of how the organization intends to achieve those objectives. In the process of determining a company's strategic plan, three basic questions are answered:

  1. Where are we now?
  2. Where do we want to be?
  3. How do we get there?

Program level plans translate strategic plans within functional areas to coordinate activity across functions and up and down the layers of an organization. A budget is an example of a financial plan that formalizes strategic plans in monetary terms.

On the other hand, project plans are more granular and lay out the specific tactics that need to be followed by members of the organization in order to execute the strategy.

The courses of action in a project plan include:

  • A calendar of events
  • The division of tasks
  • The required resources and scheduling
  • Expectations for quality and completion of the work

Can Plans Change?

Regardless of the level of planning, plans must be re-examined regularly in the light of changing conditions and circumstances.

Organizing Tasks

Managers must organize to see their plans to fruition, thus assigning tasks to individuals and arranging them in an framework that allows decision making.

Learning Objectives

Explain the nature of organization

Key Takeaways

Key Points

  • Organization deals with issues like human resources, finance, and the establishment of priorities.
  • Some of the characteristics associated with organization include: specialization and division of work; goal achievement; the grouping of individuals into departments; differentiated functions; and continuity.
  • Organization helps companies achieve goals, make the best use of resources; grow; and focus on the betterment of their employees.
  • Organizational design is a process that helps managers organize and align the structure, process, rewards, metrics, and talent with the business' strategy.

Key Terms

  • resource: Something that one uses to achieve an objective. An examples of a resource could be a raw material or an employee.
  • diversification: A corporate strategy in which a company acquires or establishes a business other than that of its current product
  • matrix: Matrix management is a type of organizational management in which people with similar skills are pooled for work assignments.
  • organizing: the management function of forming patterns of relationships among workers, and making optimum use of the resources required to enable the successful carrying out of plans

Organizing: An Overview

Once a plan has been created, a manager can begin to organize.

Organizing, in a company's point of view, is the management function that usually follows planning. It involves the assignment of tasks, the grouping of tasks into departments, and the assignment of authority and allocation of resources across the organization. During the organizing process, managers co-coordinate employees, resources, policies and procedures to facilitate the goals set out in the plan.

Organizing is highly complex and can involve:

  • Human resources
  • Finance
  • The establishment of priorities

The synchronization of all of these elements is important if results are to be obtained.

The Nature of Organization

The following are the important characteristics of organization.

Specialization and Division of Work

  • The entire philosophy of organization is centered on the concepts of specialization and division of work.
  • The division of work is assigning responsibility for each organizational component to a specific individual or group thereof. It becomes specialization when the responsibility for a specific task lies with a designated expert in that field.
  • The efforts of the operatives are coordinated to allow the process at hand to function correctly. Certain operatives occupy positions of management at various points in the process to ensure coordination.

Orientation Towards Goals

Every organization has its own purposes and objectives. Organizing is the function employed to achieve the overall goals of the organization. Organization harmonizes the individual goals of the employees with overall objectives of the firm.

Composition of individuals and groups

  • Individuals form a group and the groups form an organization. Thus, organization is the composition of individual and groups.
  • Individuals are grouped into departments and their work is coordinated and directed towards organizational goals.

Differentiated functions

  • The organization divides the entire work and assigns the tasks to individuals in order to achieve the organizational objectives; each one has to perform a different task and tasks of one individual must be coordinated with the tasks of others. Collecting these tasks at the final stage is called integration.


  • An organization is a group of people with a defined relationship in which they work together to achieve the goals of that organization. This relationship does not come to end after completing each task. Organization is a never ending process.

Benefits of Organization

Together, these characteristics:

Help to achieve organizational goals

  • Organization is employed to achieve the overall objectives of business firms. Organization focuses attention of individuals objectives towards overall objectives.

Optimise the use of resources

  • To make optimum use of resources such as men, material, money, machine and method, it is necessary to design an organization properly.
  • Work should be divided and right people should be given right jobs to reduce the wastage of resources in an organization.

Aid managers in performing other managerial functions

  • Additional planning, organizing, staffing, directing and controlling cannot be implemented without proper organization.

Facilitate growth and


  • A good organization structure is essential for expanding business activity. Organization structure determines the input resources needed for expansion of a business activity similarly organization is essential for product diversification such as establishing a new product line.

Facilitate human treatment of employees

  • Organization has to operate for the betterment of employees and must not encourage monotony of work due to higher degree of specialization.
  • These days, organization has adapted the modern concept of systems approach based on human relations and it discards the traditional productivity and specialization approach.

Organizational Design: Helping Managers Organize

Organization design can be defined narrowly, as the process of reshaping organization structure and roles, or it can more effectively be defined as the alignment of structure, process, rewards, metrics and talent with the strategy of the business.

Organizational Design: This is one type of matrix organizational structure.

Organization design may involve strategic decisions, but is properly viewed as a path to effective strategy execution. The design process nearly always entails making trade-offs of one set of structural benefits against another.

Many companies fall into the trap of making repeated changes in organization structure, with little benefit to the business. This often occurs because changes in structure are relatively easy to execute while creating the impression that something substantial is happening. This often leads to cynicism and confusion within the organization.

More powerful change happens when there are clear design objectives driven by a new business strategy or forces in the market that require a different approach to organizing resources.

Staffing Roles

The managerial responsibility of staffing is an involved process of hiring, training, compensating, positioning, and assessing team members to enable operational success.

Learning Objectives

List the various functions involved in staffing for managers

Key Takeaways

Key Points

  • Building a team can make or break an operational process, and the manager is tasked with the majority of the responsibility in accomplishing this.
  • The complexity of the modern job market, and the huge volume of qualified talent, makes the hiring process both an incredible opportunity and a complex filtering process.
  • Once an employee is selected, training them for success and determining optimal compensation is key to getting the employee satisfied and up to speed.
  • On the more strategic side of staffing, managers must appraise performance and identify gaps in the overall team's execution.
  • Staffing is only one of many responsibilities managers must attend to, giving some idea of the scope of responsibilities often shouldered by modern management.

Key Terms

  • performance appraisals: Employees have set objectives and milestones, and performance can be assessed via comparing actual outcomes to desired outcomes.

Managerial Staffing Responsibilities

One of the core functions of a manager is building and maintaining a team, which is accomplished through staffing responsibilities. Simply put, staffing is the managerial process of hiring, positioning, and overseeing employees. Often enough, human resources are both the most expensive and the most valuable assets a business has. Having internal talent can be a core competitive advantage, and bringing in the right people and positioning them for success is a core managerial responsibility.

Managers perform job analyses for each of the roles they intend to manage. This analysis includes hiring, training, compensation, performance appraisals, identification of gaps, and various compliance considerations.


Finding talent is an enormous challenge and opportunity in today's economy. With the diversity of skill sets, the high volume of applicants, and the growing complexity of organizational needs, managers are busier than ever when it comes to the hiring process. Many job postings will receive hundreds or even thousands of applicants, and filtering through this large applicant pool can be expedited by software solutions and the hiring of third parties to manage the hiring process.

Once a few key candidates are selected, there are a variety of important considerations prior to hiring. Managers often conduct one-on-one interviews, team interviews, personality tests, skill assessments, reference checks, and a variety of other alignment tests to ensure fit. Hiring is an expensive process, with expensive repercussions for mistakes. It is a core managerial function with substantial consequences, both positive and negative.


Once a new employee is selected, it can take anywhere from a week to 6 months to truly get them up to speed. Every job is different, and every job has different training requisites. Investing both time and capital in preparing employees for success can create significant increases in value and return on investment, as well as empowering employees to grow and improve. Hiring employees without proper on-boarding can result in costly mistakes, role uncertainty, and ultimately job dissatisfaction.


Compensation as a managerial responsibility isn't just about salary (though certainly that's an important component). Managers must understand what their employees need, and help to provide it via benefits, bonuses, training, and opportunities for professional growth. From health care to helping with a university degree, organizations have the opportunity to create employee loyalty as well as develop talent via strong staffing skills on behalf of management.

Performance Appraisals

Whether management does it on an ongoing basis, an annual basis, or a quarterly basis, most managers must consider the performance of their employees at one point or another. This can be done formally (and often is at larger firms) or informally, and must include both past performance and the expectations set at the beginning of the appraisal period. The employee must know before hand what it is they will be assessed on, and what the objectives and expectations are. It is also relatively common to attach incentives to performance appraisals, to provide value when value is provided.

Identifying Gaps

Other managerial functions are highlighted in this diagram, in addition to the tasks involved in staffing.

Management Process: Other managerial functions are highlighted in this diagram, in addition to the tasks involved in staffing.

From a more strategic frame, managers must consider the overall process and objectives their work group is aiming to accomplish alongside what resources and skills must be present to do so. That means identifying where there are functional or skill gaps in a given team, and solving that problem. There are more solutions than just hiring full-time employees too. Managers may notice a skill gap that only requires 10 hours per week to fill. In this case, hiring a contractor on an hourly basis is lower risk and lower cost than hiring a new employee.


Finally, managers must comply with a variety of legal aspects in collaboration with the HR department. Employee rights, unions, and other legal requirements from the governing bodies must be built into contracts and operations.


When combining all of these responsibilities, you have one facet of a manager's overall responsibilities. This provides some scope to not only how much is involved in staffing, but how much can be involved in the role of management in general. Managers must also plan, organize, direct, and control.

Leading Teams

Certain leadership competencies help people become effective leaders; successful team leaders follow planning and implementation processes.

Learning Objectives

Evaluate effective team leadership

Key Takeaways

Key Points

  • Team leaders provide guidance, instruction, direction, and leadership to their respective teams. They must build teams and ensure that they work well together.
  • A team leader reports to a project manager who oversees several teams.
  • Effective team leaders possess six leadership competencies that translate to the success of their teams.
  • Team leaders must be able to balance being a member of the team and a leader who manages the progress of the team.

Key Terms

  • leadership: The capacity of someone to lead.
  • goal: a result that one is attempting to achieve
  • leading: the management function of determining what must be done in a situation and getting others to do it
  • project manager: one who manages projects.

Leading Teams

The Team Leader: an Overview

A team leader or team lead is someone (or in certain cases there may be multiple team leaders) who provides guidance, instruction, direction, and leadership to a group of other individuals (the team) for the purpose of achieving a key result or group of aligned results.

There are many elements that create, and are essential to be an effective leader who has the power to motivate a team and drive success. There is often a balancing act that the leader must manage between being a leader and a member while ensuring the goal is clear and obtainable.

A good team leader listens constructively to the membership and to the customer(s) of the results that the team is charged with delivering.

The Team Leader: Reporting Structure

The team lead reports to a project manager (overseeing several teams). The team leader monitors the quantitative and qualitative result that is to be achieved. The leader works with the team membership.

The team membership may not directly report or answer to the team leader (who is very often a senior member of the organization but may or may not be a manager), but would be expected to provide support to the team leader and other team members in achieving the team's goals.

The Team Leader: Responsibilities

The responsibilities of a team lead vary greatly between organizations, but usually include some responsibility for team building and ensuring teamwork.

The term is used to emphasize the cooperative nature of a team, in contrast to a typical command structure, where the head of a team would be its commander.

The Team Leader: Leadership Competencies

There are six leadership competencies that are the building blocks to becoming an effective leader:

  • Focus on the goal,
  • Ensure a collaborative climate,
  • Build confidence,
  • Demonstrate sufficient technical know-how,
  • Set priorities,
  • Manage performance as described When Teams Work Best by LaFasto and Larson.

Does an effective team leader both merge into the group as a member of the team and also maintain a leadership role? And if so, how?

A leader is the key player in the game that is comprised of challenge and risk. Therefore, an effective team leader must be both a component to the team and also a leader to manage the team's progress.

The leader cannot possibly be competent in every area without being engaged in the team. The leader must know each member and the team as a whole in order to bring them all together and create a process that is open, productive, and promotes confidence.

An effective leader uses each member's contributions and energy to focus on a common goal.

Essentially, a leader's job is to add importance to the team's effort, which cannot be done without being a member.

It is very common for a team leader to be in the dark about their team and the everyday operations. This is a consequence of a leader's disengagement and lack of membership with the team.

Moreover, the team's contention usually gives birth at this point and lends itself to decreased productivity and satisfaction. An effective leader needs to be able to pinpoint problems and praise excellence within the group, which cannot be done from the sidelines.

The leader is a part of the overall process; therefore, a relationship naturally exists. However, it is up to the leader whether to nurture that relationship or minimize its importance.

The team leader must understand the team's vision and clearly define the goal to guarantee success and member loyalty. One cannot lead a team without knowing the purpose and goal of the team. The team leader creates a collaborative climate to ensure that the best thinking and ideas of the team are represented. Again, a wholesome climate cannot be established without knowing the members and becoming engaged in the team.

The foundation of a highly motivated and successful team is the members' understanding and relevance of their goal. An effective leader's trust in the team goal is vital to the member's commitment.

The members become isolated and discouraged when the leader's investment is minimal. Team members want the opportunity to prove their value and worth to the goal and the leader. The leader must be involved and a member of the team to effectively influence the members' productivity and function in the grand scheme of things.


Leading Teams: Team Leadership

Knowledge Management

Organizations use knowledge management to identify, create, represent, distribute, and enable strategy and process.

Learning Objectives

Explain the importance and recent developments in Knowledge Management (KM)

Key Takeaways

Key Points

  • Knowledge management typically focuses on specific organizational objectives.
  • Criteria have been developed that help organizations measure the benefits they receive from knowledge management.
  • Technology plays a large role in the development of knowledge management tools.
  • Knowledge management efforts tend to overlap those of organizational learning and are, in fact, seen as an enabler of organizational learning.

Key Terms

  • groupware: software designed to be used collaboratively by multiple users on a network
  • artificial intelligence: The branch of computer science dealing with the reproduction or mimicking of human-level intelligence, self-awareness, knowledge, conscience, thought in computer programs.
  • management development: the process by which company employees responsible for overseeing departments or the whole company learn and improve their skills not only to benefit themselves but also their employing organizations
  • organizational learning: In Organizational development (OD), learning is a characteristic of an adaptive organization, i.e., an organization that is able to sense changes in signals from its environment (both internal and external) and adapt accordingly.

Knowledge Management

Knowledge management (KM) comprises a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable the adoption of insights and experiences. Such insights and experiences comprise of knowledge, either embodied in individuals or embedded in organizations, such as processes or practices. Once an organization has the framework in place that knowledge management provides, it can design its strategy, structure and processes in such a way that it uses what it knows to. This, in turn, creates value for its customers and the community as a whole.

Organizational Functions of Knowledge Management and Their Benefit

Knowledge management efforts typically focus on organizational objectives such as:

  • Improved performance
  • Competitive advantage
  • Innovation
  • The sharing of lessons learned
  • Integration
  • Continuous improvement of the organization

As a result, companies benefit as they are able to:

  • Develop new products and services that add value to their customers (innovation, competitive advantage)
  • Improve the value of their existing products (the sharing of lessons learned, improved performance, competitive advantage)
  • Control costs and promote reuse (integration, continuous improvement of the organization, the sharing of lessons learned);
  • Respond to environmental changes faster and experience less uncertainty (the sharing of lessons learned which can provide general knowledge about the environment)

How does an Organization Know it is Receiving these Benefits?

Here are a few of the criteria for measuring the efficacy of a knowledge management strategy:

  1. How long it takes to respond: This metric includes the speed in which the organization responds to customer needs, requests, or problems; brings a new product or service to market; and enters new markets.
  2. How much knowledge is reused: This metric measures how often employees access and use knowledge assets and avoid "re-inventing the wheel".
  3. How much is made from new products: This metric loos at the revenue from products that have been developed recently or are a certain number of years old.
  4. How satisfied and empowered employees are and feel: This metric measure the ability of the organization to hire talented staff, the ability of the organization to keep talented staff, and the amount of influence these knowledgeable staff members have.

Facets of Knowledge Management

Early KM technologies included online corporate yellow pages as expertise locators and document management systems. Combined with the early development of collaborative technologies (in particular Lotus Notes), KM technologies expanded in the mid-1990s. Subsequent KM efforts leveraged semantic technologies for search and retrieval and the development of e-learning tools for communities of practices (Capozzi 2007). Knowledge management systems can thus be categorized as falling into one or more of the following groups:

  • Groupware
  • Document management systems
  • Expert systems
  • Semantic networks
  • Relational and object oriented databases
  • Simulation tools
  • Artificial intelligence (Gupta & Sharma 2004)

More recently, the development of social computing tools (such as bookmarks, blogs, and wikis) have allowed more unstructured, self-governing or ecosystem approaches to the transfer, capture and creation of knowledge, including the development of new forms of communities, networks.

Software tools in knowledge management are a collection of technologies and are not necessarily acquired as a single software solution. Furthermore, these knowledge management software tools have the advantage of using the organization's existing information technology infrastructure.

Organizations and business decision makers spend a great deal of resources and make significant investments in the latest technology, systems and infrastructure to support knowledge management. It is imperative that these investments are validated properly, made wisely, and that the most appropriate technologies and software tools are selected or combined to facilitate knowledge management.

Knowledge Management in Education and in Corporations

An established discipline since 1991 (see Nonaka 1991), KM includes courses taught in the fields of business administration, information systems, management, and library and information sciences (Alavi & Leidner 1999). More recently, other fields have started contributing to KM research, such as information and media, computer science, public health, and public policy. Many large companies and non-profit organizations have resources dedicated to internal KM efforts, often as a part of their business strategy, information technology, or human resource management departments (Addicott, McGivern & Ferlie 2006). Several consulting companies also exist that provide strategy and advice regarding KM to these organizations.


Knowledge Management: The Knowledge Spiral

Controlling Activities

Controlling is a core managerial function defined by observing and optimizing operational processes.

Learning Objectives

Understand the managerial process of control

Key Takeaways

Key Points

  • Organizations are essentially a combination of processes, each of which benefits from managerial control.
  • Control is simply the activity of observing a given organizational process, measuring the performance compared to a previously established metric, and improving it where possible.
  • At the upper-managerial level, control revolves around setting strategic objectives in the short and long term, as well as measuring success.

Key Terms

  • iterate: Repeating processes in order to identify and incorporate improvements.


One facet of management is called controlling, and it is an important piece of the management puzzle. Control is observing current (and projecting future) processes and operational systems in order to avoid mistakes, identify improvements, ensure objectives are accomplished, and consider the big picture. Organizations are made up of operational systems, each of which can be iterated upon and optimized for improved performance.

The Four Elements of Control

The process of control can usually be divided into the following four components:

  1. The process to be controlled - This is simply the aspect (or entirety) of a process being measured. For example, let's say getting customers to a website via online ads.
  2. The sensor - The sensor is the component that measures the condition being controlled. In this case, Google analytics will provide the information of how many individuals see the ad and how many come to the website as a result.
  3. The comparator - The comparator is the expectation the actual results will be compared to. In our example, let's say we're looking for 5% of people who see the ad to come to the website.
  4. The activator - The activator is what will intervene to improve the process, if necessary. Let's say overall only 2% of people clicked the ad and came to the website. The activator will be the tactical changes management will take to get the current operational efficiency improved to the desired level.

This chart demonstrates the control process chronologically over time, and the way in which management can actively impact the execution of a given operation.

Production Control: This chart demonstrates the control process chronologically over time, and the way in which management can actively impact the execution of a given operation.

Strategic Control

The above example relates primarily to an operational process. Optimizing operational processes is often done at the mid-managerial level. At the upper managerial level, strategic control is a similar process in a broader context. Strategic control pertains to four elements as well:

  • Mission statements/vision statements/operational plans - the identification and communication of the strategic outcomes desired by the organization
  • Short and long-term objectives - the description of the strategic activities to be carried out (attached to specific managed resources) in pursuit of the above statements
  • Measurement and Tracking - the creation and implementation of a reporting system to track the progress and success of the objectives identified
  • Enabling Iteration - Once the operations are in place, the organization will begin pursuing the noted objectives. At this point, the organization needs systems to change and evolve the process for improvement.

This chart demonstrates the relationship between various work groups in the controlling process.

Management Control Systems: This chart demonstrates the relationship between various work groups in the controlling process.

Customer Experience Management

Customer experience management focuses the operations and processes of a business around the need of the individual customer.

Learning Objectives

Explain the difference between Customer Experience Management (CEM) and Customer Relationship Management (CRM)

Key Takeaways

Key Points

  • The goal of customer experience management (CEM) is to move customers from satisfied to loyal and then from loyal to advocates.
  • Customer experience solutions optimize the end-to-end customer experience.
  • Customer experience management differs from customer relationship management is that the former focuses on customer need and desire.

Key Terms

  • customer relationship management: Customer relationship management (CRM) is a widely implemented model for managing a company's interactions with customers, clients, and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support.
  • business model: The particular way in which a business organization ensures that it generates income, one that includes the choice of offerings, strategies, infrastructure, organizational structures, trading practices, and operational processes and policies.

What Is Customer Experience Management (CEM)?

Customer experience management (CEM) is a strategy that focuses the operations and processes of a business around the needs of the individual customer. Companies are focusing on the importance of the experience. Jeananne Rae says that companies are realizing that "building great consumer experiences is a complex enterprise, involving strategy, integration of technology, orchestrating business models, brand management and CEO commitment."

According to Bernd Schmitt, "the term 'customer experience management' represents the discipline, methodology and/or process used to comprehensively manage a customer's cross-channel exposure, interaction and transaction with a company, product, brand or service."

The goal of customer experience management is to move customers from satisfied to loyal and then from loyal to advocate.


In-N-Out Burger: University Tower in Irvine, next to the University of California. This office building is home to the corporate headquarters of In-N-Out Burger. The In-N-Out restaurant chain has developed a highly loyal customer base and has been rated as one of the top fast food restaurants in several customer satisfaction surveys.

Customer experience solutions provide strategies, process models, and information technology to design, manage, and optimize the end-to-end customer experience process.

Why Isn't Customer Relationship Management Enough?

Traditionally, managing the customer relationship has been the domain of customer relationship management (CRM). However, CRM strategies and solutions are designed to focus on product, price, and enterprise process, with minimal or no focus on customer need and desire.

The result is a sharp mismatch between the organization's approach to customer expectations and what customers actually want, resulting in the failure of many CRM implementations.

Where CRM is enterprise-focused and designed to manage customers for maximum efficiency, CEM is a strategy that focuses the operations and processes of a business around the needs of the individual customer.

Companies are focusing on the importance of the experience and, as Jeananne Rae notes, realizing that "building great consumer experiences is a complex enterprise, involving strategy, integration of technology, orchestrating business models, brand management and CEO commitment" (2006).

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