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Conceptual skill involves the formulation of ideas. Managers understand abstract relationships, develop ideas, and solve problems creatively. Thus, technical skill deals with things, human skill concerns people, and conceptual skill has to do with ideas.
The ability to think creatively about, analyze and understand complicated and abstract ideas. Using a well developed conceptual skill set, top level business managers need to be able to look at their company as a holistic entity, to see the interrelationships between its divisions, and to understand how the firm fits into and affects its overall environment
Attention to detail
Problem solving
Good communication
Time Management
Well organize
As used here, conceptual skill involves the ability to see the enterprise as a whole; it includes recognizing how the various functions of the organization depend on one another, and how changes in any one part affect all the others; and it extends to visualizing the relationship of the individual business to the industry, the community, and the political, social, and economic forces of the nation as a whole. Recognizing these relationships and perceiving the significant elements in any situation, the administrator should then be able to act in a way which advances the over-all welfare of the total organization.
Hence, the success of any decision depends on the conceptual skill of the people who make the decision and those who put it into action. When, for example, an important change in marketing policy is made, it is critical that the effects on production, control, finance, research, and the people involved be considered. And it remains critical right down to the last executive who must implement the new policy. If each executive recognizes the over-all relationships and significance of the change, he is almost certain to be more effective in administering it. Consequently the chances for succeeding are greatly increased.
Not only does the effective coordination of the various parts of the business depend on the conceptual skill of the administrators involved, but so also does the whole future direction and tone of the organization. The attitudes of a top executive color the whole character of the organization’s response and determine the “corporate personality” which distinguishes one company’s ways of doing business from another’s. These attitudes are a reflection of the administrator’s conceptual skill (referred to by some as his “creative ability”—the way he perceives and responds to the direction in which the business should grow, company objectives and policies, and stockholders’ and employees’ interests.
Conceptual skill, as defined above, is what Chester I. Barnard, former president of the New Jersey Bell Telephone Company, is implying when he says: “…the essential aspect of the [executive] process is the sensing of the organization as a whole and of the total situation relevant to it.”3 Examples of inadequate conceptual skill are all around us. Here is one instance:
In a large manufacturing company which had a long tradition of job-shop type operations, primary responsibility for production control had been left to the foremen and other lower-level supervisors. “Village” type operations with small working groups and informal organizations were the rule. A heavy influx of orders following World War II tripled the normal production requirements and severely taxed the whole manufacturing organization. At this point, a new production manager was brought in from outside the company, and he established a wide range of controls and formalized the entire operating structure.
As long as the boom demand lasted, the employees made every effort to conform with the new procedures and environment. But when demand subsided to prewar levels, serious labor relations problems developed, friction was high among department heads, and the company found itself saddled with a heavy indirect labor cost. Management sought to reinstate its old procedures; it fired the production manager and attempted to give greater authority to the foremen once again. However, during the four years of formalized control, the foremen had grown away from their old practices, many had left the company, and adequate replacements had not been developed. Without strong foreman leadership, the traditional job-shop operations proved costly and inefficient.
In this instance, when the new production controls and formalized organizations were introduced, management did not foresee the consequences of this action in the event of a future contraction of business. Later, when conditions changed and it was necessary to pare down operations, management was again unable to recognize the implications of its action and reverted to the old procedures, which, under the circumstances, were no longer appropriate. This compounded conceptual inadequacy left the company at a serious competitive disadvantage.
Because a company’s over-all success is dependent on its executives’ conceptual skill in establishing and carrying out policy decisions, this skill is the unifying, coordinating ingredient of the administrative process, and of undeniable over-all importance.
Skills required are patience and discipline.
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