how to use these approaches in managing your business – WAU
Adjusting to changes in the market and behavior is a necessity for companies that wish to survive today. In this sense, the top-down and bottom-up approaches appear as two aspects of management capable of modeling the operation of a business according to the perspectives and interests of each enterprise.
Top-down and bottom-up are two approaches based on the decomposition of a system, with the purpose of understanding its components and ordering them according to a hierarchy or operation model.
The top-down suggests a downward orientation of the information flow and the bottom-up suggests an upward orientation.
This methodology has application in the most varied fields: industry, software engineering, psychology, humanistic, marketing and, mainly, in the management of organizations, as we will see in detail in this article.
After all, how should a company conduct its decision-making? Top-down or bottom-up?
Continue here and understand how these approaches can be worked, their advantages and disadvantages and how to choose the ideal model for your business. Good reading!
Top-down and bottom-up approaches and their applications
The top-down and bottom-up concepts are used to order the different parts of a whole and direct the execution of tasks or decision-making – possibilities that can be used in the most diverse ways and in the most different areas. Look at that!
Within industrial systems, the top-down concept can be understood as an orientation of production in the sense of “macro” for “micro” and the bottom-up of “micro” for “macro”.
The traditional production of products usually has a top-down character, that is, raw materials are separated, cut and shaped to shape the product.
On the other hand, one of the highlights of Industry 4.0 that promises to revolutionize industrial processes is 3D printing.
With this technology, also known as additive manufacturing, the production of parts is carried out from the bottom up from the precise addition of material, layer by layer.
The main advantages of this bottom-up production method are practically zero waste of materials and the infinite possibilities for modeling.
In software engineering, every system is composed of several subsystems that, in turn, contain a series of integrated components.
The top-down model applied in this context considers an entire software system as an entity to then decompose it into its different subsystems and define the most specific functions.
In the bottom-up approach, it starts with the most basic components and follows a constructive development until the whole set is architected.
In psychology, these concepts are used to designate the systems that stimulate the brain and, consequently, influence an individual’s behavior.
The bottom-up is the unconscious system responsible for emotions (pains, desires and pleasures) and is characterized by the constant search for immediate rewards.
Top-down is the conscious or rational system, in which the mind deliberately conducts behavior.
The top-down and bottom-up models can also be adopted in Content Marketing, mainly in the production of informational materials.
A great example is the reuse of content, a practice that consists of making available pieces published in other consumer formats.
In this case, the top-down mode consists of decomposing rich materials (such as e-books and courses) into smaller materials (blog posts or videos for YouTube). The exact opposite is the bottom-up mode, which consists of gathering simpler content and incorporating it in a larger material.
NPS (Net Promoter Score)
Already approaching top-down and bottom-up management applications, we have the Net Promoter Score, a metric used to assess the perception of satisfaction and customer loyalty of a brand.
When we carry out the research using the top-down model, the data are collected periodically through seasonal surveys carried out with samples from the public – the same methodology used in conducting the Demographic Census, for example.
In the bottom-up orientation, consumer data is collected during the purchase or, also, in his interaction with the brand, either on the company’s own channels or on its pages on social networks – the so-called Social Listening.
In addition to all these applications, systematic models can also play a key role in guiding management.
As we will see below, top-down and bottom-up management have different characteristics and are recommended for different scenarios and projects.
Among the top-down and bottom-up management models, the first is probably the most well-known and widespread.
In him, decisions are made by a central core (top) that defines all the guidelines and strategies of the others (bottom) often based on consultancies and trends.
It is the traditional view of management in which entrepreneurs or managers control all sectors and operations developed by their employees, as well as playing a creative role in the development of new products and services.
In general, there is a very well-defined hierarchy that organizes all the authorities and their subordinates.
Although, in this case, employees do not directly influence the decisions made by the company, it does not mean that the administrative nuclei are inaccessible. Managers also need to take into account the needs of their staff to ensure productivity at work.
Advantages of top-down management
The main advantage of top-down management is certainly the uniformity it provides to processes in general.
Besides that, a great common reference among all the different sectors and professionals favors the congruence in the activities carried out, which helps to add solidity to the business. Some other important advantages are:
- consistency in the processes performed;
- agile decision making;
- less interference (less frequent changes);
- control of working with previously defined budgets.
Disadvantages of top-down management
The biggest disadvantage of the top-down model is the greater chances of disharmony between the top and the bottom, a problem that can originate in different ways such as:
- setting confused or unreachable goals;
- poor working conditions and little commitment by managers to promote improvements;
- implementation of processes without proper guidance and training of employees;
- sudden changes in direction without notice;
- communication problems and low engagement.
In addition, the top-down approach, due to its commonly closed nature, sometimes proves to be quite inflexible, which is capable of generating widespread dismay in the work teams.
In bottom-up (or bottom-up) management, although the company’s administrative core still takes the final say in decisions, all sectors actively participate in the definitions established in the company.
It can also be understood as a horizontal approach to management, in which hierarchical relationships are mitigated and the opinion of employees is valued. The idea is to create a common core, allowing the different levels of the company to come together and the creative potential of everyone to be stimulated and exploited.
Comparing the top-down and bottom-up approaches, we realize that decision-making in the first case is more lonely, while the second is based on the opinions of a group of people who may even be part of different hierarchical levels.
Advantages of bottom-up management
The involvement of different people and sectors allows the relations between all individuals who participate in the enterprise to be benefited, that is, there is a very positive impact on organizational climate.
In addition, the broad view in which different perspectives are shared is capable of making the actions taken by a company much richer and more constructive.
Some other advantages of this model are:
- greater employee satisfaction and engagement due to its democratic character;
- fewer conflicts, failures and noise (criticism and negative comments);
- more complete and realistic analyzes;
- rapid problem detection;
- greater flexibility in management.
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Disadvantages of bottom-up management
Although the bottom-up model presents a more integrative and humanized view, its parameters can bring some challenges to management, such as:
- making decisions and making adjustments is slower;
- greater investment in internal communication and internal marketing is necessary;
- its flexibility can upset more conservative customers and employees.
In addition, the valuation of employees is capable of promoting different results, including problematic outcomes such as competition and rivalry, wear and tear due to excessive work or demands beyond the reach of the company.
The applications of the two management models
The top-down and bottom-up methodologies allow us to adopt a management strategy that is much more efficient according to the purposes, business characteristics and circumstances of each company.
Generally, top-down management usually facilitates the execution of contracts, closing partnerships or solving specific problems.
However, it is a model that is more subject to errors and conflicts, which requires constant vigilance on the part of managers.
On the other hand, when you want to find collaborative solutions with long-term effects, the bottom-up approach is the best way, but more efficient and in-depth evaluations and debates will be needed.
As such, the top-down approach is more interesting for companies that need to deal with quick decisions, damage containment or more complex business issues.
The bottom-up model is recommended for long-term management strategies or more flexible business models.
However, this is not a rule. A company can perfectly change its management methods according to the needs of the company or the maturity of the business.
The top-down and bottom-up concepts, although systematic models, are not entirely rigid and can (and should) be adapted according to the reality of each project.
This post is over, but we still have a lot of knowledge to share! Continue on the blog and find out how to use process management to boost the efficiency of your business!