Levels of management in Organization - Chapter 1 - Part 5

Levels of management

What is Management?

Management is the process of ensuring that an organization or company is able to operate in both the immediate and near future. Management in business and organizations is the function that coordinates the efforts of people to accomplish goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization or initiative to accomplish a goal. Managers are charged with making decisions that will impact an organization on every level.

Who is Manager?

A Manager is the person responsible for planning and directing the work of a group of individuals, monitoring their work, and taking corrective action when necessary. It is more important for the manager to know how to manage the workers than to know how to do their work well.

Functions of a manager are as:

·         Sets objectives: The manager sets goals for the group, and decides what work needs to be done to meet those goals.

·         Organizes:  The manager divides the work into manageable activities, and selects people to accomplish the tasks that need to be done.

·         Motivates and communicates: The manager creates a team out of his people, through decisions on pay, placement, promotion, and through his communications with the team.

·         Measures: The manager establishes appropriate targets and yardsticks, and analyzes, appraises and interprets performance.

·         Develops people: With the rise of the knowledge worker, this task has taken on added importance. In a knowledge economy, people are the company’s most important asset, and it is up to the manager to develop that asset

TYPES OF MANAGERS:

 Managers can be classified in two ways:

·         By their level in the organization; for example, as first-line, middle and top managers.

·         By the range of organizational activities for which they are responsible; for example, as functional or specialist managers and general managers.

Management Levels:

The various levels of management in a large organization form the management pyramid as illustrated in Figure below:

·         Top Level Management:  Board of Directors Chief Executive Officer Managing Director President

·         Middle Level Management: Department Head

·         Lower Level Management: Supervisor

Top Level Management:

The Top Level Management consists of the Board of Directors (BOD) and the Chief Executive Officer (CEO). The Chief Executive Officer is also called General Manager (GM) or Managing Director (MD) or President. The Board of Directors is the representatives of the Shareholders, i.e. they are selected by the Shareholders of the company. Similarly, the Chief Executive Officer is selected by the Board of Directors of an organization.

The main role of the top level management is summarized as follows:-

·         The top level management determines the objectives, policies and plans of the organization.

·         They mobilizes (assemble and bring together) available resources.

·         The top level management does mostly the work of thinking, planning and deciding. Therefore, they are also called as the Administrators and the Brain of the organization.

·         They spend more time in planning and organizing.

·         They prepare long-term plans of the organization which are generally made for 5 to 20 years.

·         The top level management has maximum authority and responsibility. They are the top or final authority in the organization.

·         They are directly responsible to the Shareholders, Government and the General Public. The success or failure of the organization largely depends on their efficiency and decision making.

·         They require more conceptual skills than technical Skills.

 Middle Level Management:

The Middle Level Management consists of the Departmental Heads (HOD), Branch Managers, and the Junior Executives. The Departmental heads are Finance Managers, Purchase Managers, etc. The Branch Managers are the head of a branch or local unit. The Junior Executives are Assistant Finance Managers, Assistant Purchase Managers, etc. The Middle level Management is selected by the Top Level Management. The middle level management emphasizes more on following tasks:-

·         Middle level management gives recommendations (advice) to the top level management.

·         It executes (implements) the policies and plans which are made by the top level management.

·         It co-ordinates the activities of all the departments.

·         They also have to communicate with the top level Management and the lower level management.

·         They spend more time in co-ordination and communication.

·         They prepare short-term plans of their departments which are generally made for 1 to 5 years.

·         The middle Level Management has limited authority and responsibility.

·         Require more managerial and technical skills than conceptual skills.

Lower Level Management:

The lower level management consists of the Foremen and the Supervisors. They are selected by the middle level management. It is also called Operative / Supervisory level or First Line of Management. The lower level management performs following activities:-

·         Lower level management directs the workers / employees.

·         They develop morale in the workers.

·         It maintains a link between workers and the middle level management.

·         The lower level management informs the workers about the decisions which are taken by the management. They also inform the management about the performance, difficulties, feelings, demands, etc., of the workers.

·         They spend more time in directing and controlling.

·         The lower level managers make daily, weekly and monthly plans.

·         They have limited authority but important responsibility of getting the work done from the workers. They regularly report and are directly responsible to the middle level management.

·         Along with the experience and basic management skills, they also require more technical and communication skills.