Why lowest level managers are used operational plan?

The term ‘Levels of Management’ stands for the arranged managerial positions in an organisation. The number of levels of management increases when the size of the organisation and work force increases. But, it is desirable to restrict the number of levels of management.

According to some scholars, management is a three-tier activity. The top-tier centres round the determination of mission, objectives and policies, the middle-tier is concerned with the implementation of the policies and the lower-tier actively assists in the achievement of goals.

The levels of management are: 1. Top Management 2. Middle Management 3. Lower Level Management.


What are the Difference Levels of Management: Top, Middle and Lower Level (with Functions)

Levels of Management – Top, Middle and Lower Level

There are certain levels of management with varying degree of authority arid responsibilities. Some managers decide about the objectives of the business as a whole. Some managers perform functions to achieve these objectives in different departments, like production, sales, etc., and some of managers are concerned with the supervision of day-to-day activities of workers.

Managers performing different types of duties may, thus, be divided into three categories:

i. Top-Level Management

ii. Middle-Level Management, and

iii. Lower-Level Management

i. Top-Level Management:

The top level management includes Board of Directors and the Chief Executive. The chief executive may have the designation of Chairman, Managing Director, President, Executive Director or General Manager. This level determines the objectives of the business as a whole and lays down policies to achieve these objectives (making of policy means providing guidelines for actions and decision). The top management also exercises an overall control over the organisation.

ii. Middle-Level Management:

The middle level management includes heads of various departments, e.g., production, sales etc., and other departmental managers. Sometimes, senior departmental heads are included in the top management team. The objectives of the business as a whole are translated into departmental objectives for the middle level management.

The heads of the departments then work out their own strategies so as to achieve these objectives. Middle level managers are particularly concerned with the activities of their respective departments.

iii. Lower-Level Management:

The lower-level management consists of foremen and supervisors who look after the operative workers, and ensure that the work is carried out properly and on time. Thus, they have the primary responsibility for the actual production of goods and services in the organisation.

These three levels of management taken together form the ‘hierarchy of management’. It indicates the ranks and positions of managers in the hierarchy. It shows that the middle level management is subordinate to the top-level and that the lower-level is subordinate to the middle-level management.

Workers including crafts persons, manual labourers, engineers, scientists, etc., form the bulk of the organisation membership. Within the managerial ranks, the number of managers at each level decreases as one moves from lower-level to top level management. At the top of the organisation, there is usually one person.


Levels of Management – Top Management, Middle Management and Supervisory Management (With their Functions)

Every organisation has a managerial hierarchy or chain of command that consists of various levels of authority. The number of management levels generally differs from organisation to organisation. Since management is a process of exercising authority and understanding responsibility, its functions are to be allocated according to various functional departments or sections.

By and large, quite many organisations identify within them three levels of management such as:

1. Top Management

2. Middle Management

3. First Line Operating or Supervisory Management

1. Top Management:

Top Management deals with policy issues and with planning and analysis that totally concerns the entire organisation and its future direction. They are vested only with preliminary control and then obtaining feedback to assess degree of long-range plan’s success. The nature of their work can be classified as intangible and hence cannot exercise routine or concurrent control. The top management may consist of an individual called Chief Executive / Managing Director or a group of persons consisting of a chairman and functional directors. The special features of top management are creative imagination, judgment, initiative and vision.

After functions of top management include:

i. Planning

ii. Analysis and interpretation of internal and external environment

iii. Effective organisation

iv. Senior appointments

v. Profit distribution

vi. Providing apex direction and leadership

vii. Company relationship/companions with world outside

2. Middle Management:

These are a crucial link between top management and first line operating management. These are concerned with preliminary control in the forms of operating policies and procedures.

Some of their functions include:

i. Executing policies laid by top management.

ii. Formulating rules, regulations and procedures for lower level management members.

iii. Motivate, develop and train supervisory or first line managerial staff.

iv. Developing new products, processes, capital investment plan, and productivity improvement plans.

v. Controlling and reporting of progress.

3. First Line Operating or Supervisory Management:

They deal with current plans, programmes and events. Actually they deal with short-term problems. They are not much interested in what happened in the past or what will happen in future. They live in current period.

Some of their major functions involve:

i. Planning day to day programmes.

ii. Assigning of jobs/tasks to workmen.

iii. Issuing instructions and orders to workmen.

iv. Preparing and dispatching daily reports,

v. Maintaining discipline.

vi. To collect information to ensure maintaining quality, reducing inventory and operating costs and engaging labour fully on daily basis.


Levels of Management – With Functions of Top Level Management

The term ‘Levels of Management’ stands for the arranged managerial positions in an organisation. The number of levels of management increases when the size of the organisation and work force increases. But, it is desirable to restrict the number of levels of management.

According to some scholars, management is a three-tier activity. The top-tier centres round the determination of mission, objectives and policies, the middle-tier is concerned with the implementation of the policies and the lower-tier actively assists in the achievement of goals.

However, in big organisations, there are generally three levels of management viz.:

1. Top level management,

2. Middle level management and

3. Lower level or first line management.

1. Top Level Management:

The top level management is the policy-making group responsible for the overall direction and success of all company activities. It consists of the Board of Directors and the Chief Executive or the Managing Director.

It is the ultimate source of authority. It establishes goals and policies for the company. It is accountable to the shareholders for the overall management.

Functions:

The top management has to perform the following functions:

i. To lay down the objectives of the enterprise.

ii. To prepare plans and policies for the enterprise.

iii. To issue necessary instructions for the preparation of departmental budgets, schedules, procedures, etc.

iv. To coordinate the activities of different departments.

v. To build and maintain relations with the public.

2. Middle Level Management:

Middle level management consists of heads of functional departments. They are responsible to the top management for the efficient functioning of their departments. They include branch managers, superintendents and heads of various sections.

Functions:

Mary C. Niles has laid down the following functions for middle management:

i. To run the details of the organisation, leave the top managers as free as possible of their responsibilities.

ii. To co-operate in making a smooth functioning of the organisation.

iii. To understand the interlocking of departments in major policies.

iv. To achieve the co-ordination between the different parts of the organisation.

v. To develop leaders for the future by broad training and experience.

vi. To build up a team spirit where all are working to provide a product or service wanted by others.

3. Lower Level Management:

It is also known as ‘Supervisory Management’. It refers to those executives whose work is to oversee and direct operative employees. This level includes supervisors, foremen, accounts officers, sales officers, etc.

Managers at this level are also known as first line supervisors. They provide a link between the management and the workers.

Functions:

i. To plan and organise the activities of the group.

ii. To arrange necessary materials, machines, tools etc. for the workers.

iii. To provide the workers with the necessary working environment.

iv. To give training to the workers.

v. To supervise and guide the subordinates.

vi. To communicate workers’ problems to the top level management.


Levels of Management – 3 Levels of Management and their Functions

The levels of management consisting of various managerial positions in the structure of an organisation differ from one organisation to another, depending on the size of business activity, philosophy of management, span of control and other related factors. The hierarchy of management positions from top to bottom is called levels of management.

These positions are created through the process of delegation of authority from top to bottom. Each position is marked by authority, functions, roles, relationships and responsibility. The contents and nature vary, depending in the level at which the position lies.

Classification of Management Levels:

(i) Pfillner and Sherwood – Four levels of management, viz.; corporate management, top management, middle management, and supervisory management.

(ii) Koontz and O’ Donnell – Two levels of management, viz.; top level management, and supervisory level management.

(iii) Joseph Litterer – Three levels of management, viz.; institutional level, general management, and departmental management.

(iv) J.B. Batty – Four levels of management, viz.; top management, upper middle management, middle management and supervisory management.

For the sake of convenience, the levels of management may be classified into three levels:

1. Top Management

2. Middle Management

3. Lower Management.

1. Top Management:

Top management of any organisation consist of Board of Directors, Chairman, Vice chairman and Chief executive and General Managers etc. The top management is generally occupied by the ownership and the ultimate source of management authority in the organisation.

The top level managers lay down policies and objectives of the organisation and accountable to the owners and responsible for overall management of the organisation.

The functions performed by the top management are given below:

(i) Preparing a corporate plan for the whole organisation.

(ii) Determining the objectives of the organisation.

(iii) Making efforts for the accomplishment of the objectives of the organisation.

(iv) Creating various positions in the organisation.

(v) Establishing a link between internal and external environment.

(vi) Laying down guidelines for the departmental and divisional heads.

(vii) Proving adequate leadership to the organisation.

(viii) Receiving the work of managers at different levels in the organisation.

(ix) Exercising overall effective control on the whole organisation.

(x) Taking decisions regarding distribution of profit in the organisation.

2. Middle Management:

In order to fill up the gap between top and lower level management the middle level management position is created in the organisation. Middle level management consists of departmental head, deputy managers, and foreman and area managers.

Middle level managers are basically concerned with the task of implementing the policies and plans laid down by the top management. They serve as the channel of communication between the top and lower management.

The important functions of middle managers are as follows:

(i) Interpreting and planning for the execution of policies and programmes framed by the top management of the organisation.

(ii) Establishing departmental goals and also setting goals for lower level managers.

(iii) Assigning duties for timely execution of the plans.

(iv) Discussing the solutions of current problems and suggesting suitable method for achieving goals.

(v) Coordinating with other departments so as to ensure a smooth running of the organisation.

(vi) Appraising the performance of low level managers.

(vii) Issuing orders and instructions to lower level managers.

(viii) Making recommendation to top management for the better implementation of plans and policies.

(ix) Reporting to feedback to the top management.

(x) Motivate personnel to achieve higher productivity.

3. Lower Management:

Lower management or operating management or supervisory management is the lowest level of management. It includes, frontline supervisors, superintendent, officers etc. The managers at this level are in direct contact with the operative employees.

They are more concerned with day-to-day direction and control function as compared to planning and organising functions of the management. They directly guide and control the performance of the workers. They also represent the grievances of the workers to the higher level of management.

The functions of front line managers are given below:

(i) Planning and organising of day-to-day work.

(ii) Issuing orders and instruction to the workers.

(iii) Arranging necessary materials, machine and tools etc., for the workers in the organisation.

(iv) Providing adequate working environment to the workers.

(v) Supervising and guiding workers.

(vi) Maintaining close personal contacts with workers to ensure discipline and team work.

(vii) Evaluating operating performance of the workers and inform to middle level managers accordingly.

(viii) Solving problems of the workers and also communicate worker’s problems to the higher level management.

(ix) Acting as a liaison officer between middle management and employees.

(x) Building up a high morale among the subordinates.


Levels of Management – With Functions of Lower Level Management

The management hierarchy or chain of command in an organisation is usually divided into certain levels of authority. These levels are called the levels of management. Generally, there are three levels of management.

Top Management:

This level consists of the Board of Directors, the Chairman, the Chief Executive, etc.

The main functions of the top management are:

(i) To establish long-term corporate plans of the company.

(ii) To analyse and interpret changes in the external environment of the company.

(iii) To formulate and approve the master budget and other departmental budgets.

(iv) To appoint the department heads and other executives.

(v) To coordinate the activities of different departments of the organisation.

Middle Management:

It includes department and section heads, for example, production manager, sales manager, etc.

The main functions of the middle management are as follows:

(i) To interpret the various policies formulated by the top management.

(ii) To encourage and motivate the employees for increased productivity.

(iii) To report the results and performances of the departments to the top management.

(iv) To monitor and control the performances of the concerned departments.

(v) To prepare the organisational set-up in their departments.

Operating Management or Supervisory Management or Lower Level Management:

It includes supervisors, foremen, sales officers, accounts officers, etc.

The various functions of the supervisory management are:

(i) To plan the day-to-day production within the goals laid down by the higher authorities.

(ii) To assign jobs to workers and make arrangements for their training and development.

(iii) To issue orders and instructions to the workers.

(iv) To make arrangements for tools and arrange for the maintenance of machinery.

(v) To report feedback and workers’ grievances to the higher authorities.


Levels of Management – With Examples

Most large and medium organisations need several managers to coordinate the organisa­tion’s resources. In general, the management staff consists of three different levels or types of managers. Top or senior management usually includes the chairperson of the board, the chief executive officer (CEO), the chief operating officer (COO), and the senior vice- presidents. This level of management establishes the objectives of the business, formulates the actions necessary to achieve them and allocates the resources of the business for achieving organisational objectives.

Middle management normally consists of people with job titles such as production superintendent, auditing manager, and marketing-cum-sales manager. It is responsible for implementing and achieving organisational objectives. In addition middle management develops departmental objectives and actions for achieving organisational objectives.

The final level of management is supervisory management. Job titles of supervisory managers include foreman, crew leader, office manager, and superintendent. The supervisor manages the operative employees who actually produce the organisation’s goods and services through their own efforts (i.e., by using labour power).

The three levels of management form management hierarchy or a pyramid as shown in Table 2. Within the management hierarchy are a number of supervisors, a smaller number of middle managers, and only a few at the very top. In addition, job titles for managers within the hierarchy vary from organisation to organisation and from industry to industry.

Why lowest level managers are used operational plan?

Table 3 indicates that each level of management places different emphasis on the functions of management. Furthermore, the degree of responsibility a manager has in each function depends on his (or her) position in the management hierarchy. For example, top management is responsible for long-range planning for the overall organisation. By comparison, supervisory management is responsible for short-range, day-to-day planning of a specific work group.

Why lowest level managers are used operational plan?


Levels of Management – Classified in 3 Broad Categories

This refers to the different tiers of management positions in an organisation. The levels in management are proportionate to the size of the business and workforce in the organisation. It is the chain of command, the level of authority and status of a managerial position.

The levels of management can be classified in three broad categories:

A. Top level

B. Middle rung

C. Supervisory or Frontline managers

A. Top Level Management:

It comprises the board of directors, chief executive officer or the managing director. It is the ultimate source of authority and is saddled with managing the goals and policies for the business enterprise.

The role of the top management includes:

1. Framing the objectives and broad policies of the organisation.

2. Overseeing the preparation of department budgets, procedures, schedules, etc.

3. Strategic planning for the enterprise.

4. Appointing the middle rung management.

5. Controlling and coordinating the activities of the organisation.

6. Handling public relations.

B. Middle Level Management:

The Middle Level looks after the functioning of their various departments on a daily basis. They focus on organisational and directional functions. They are answerable to the top management. The size of the Middle Level Management is determined by the size of the organisation.

Generally, they are assigned the following roles:

1. Ensuring implementation of organisational plans.

2. Making plans for the various departments of the organisation.

3. Training lower level management.

4. Interpreting and communicating policies from top level management to the lower level.

5. Coordinating the divisional activities.

6. Reporting to senior management.

7. Performance evaluation of junior managers.

C. Lower Level Management:

Lower Level Management is also known as supervisory or the operative level of management. According to R. C. Davis, “Supervisory management refers to those executives, whose work has to be largely with personal oversight and direction of operative employees.”

Their activities include the following:

1. Assigning of jobs and tasks and responsibilities to workers.

2. Issuing guidance and instructions to workers on a daily basis.

3. Ensuring quality control.

4. They communicate workers’ issues to the higher management.

5. Provide on the job training to the workers.

6. Ensure necessary materials, machines, tools, etc. for getting the things done.

7. Evaluate performance of the workers.


Levels of Management – With the Roles of Managers at the 3 Levels

Various managerial positions on the basis of their authority, chain of command, responsibility, etc., are categorised in different levels. The term ‘Levels of Management’ refers to a line of demarcation between various managerial positions in an organisation. It increases with the size of the business and workforce. The level of management determines a chain of command, the amount of authority and status enjoyed by any managerial position.

The levels of management can be classified in three broad categories:

1. Top level (Administrative level)

2. Middle level (Executory)

3. Low level (Supervisory/Operative/First-line managers).

The role of managers at all the three levels is discussed below:

1. Top Level of Management:

It comprises of Board of Directors, Chief Executive Officer or Managing Director. The top management possesses the ultimate source of authority. It establishes goals and policies for an enterprise. It devotes more time on planning and coordinating functions. They are responsible towards the shareholders for the performance of the enterprise.

The role of the top management can be summarised as follows:

(a) Laying down the objectives and broad policies of the enterprise.

(b) Issuing necessary instructions for preparation of department budgets, procedures, schedules, etc.

(c) Preparing strategic plans and policies for the enterprise.

(d) Appointing the executives for middle level, i.e., departmental managers.

(e) Controlling and coordinating the activities of all the departments.

(f) Keeping watch on external environment.

(g) Issuing guidance and direction.

2. Middle Level of Management:

The branch managers and departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. They are engaged for organisational and directional functions. Generally, in small organisation, there is only one layer of middle level of management, but in big enterprises, there may be senior and junior middle level management.

Their role can be emphasised as:

(a) Executing the plans of the organisation in accordance with the policies and directives of the top management.

(b) Planning for the sub-units of the organisation.

(c) Facilitate in employment and training of lower level management.

(d) Interpreting and communicating policies from top level management to lower level.

(e) Coordinating the activities within the division or department.

(f) Preparing and sending important reports and other important data to top level management.

(g) Evaluating performance of junior managers.

(h) Inspiring lower level managers towards better performance.

3. Lower Level of Management:

Lower level is also known as supervisory/operative level of management. Employees in the category of supervisors, foreman, section officers, superintendent, etc., are included in this level. According to R.C. Davis, “Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees”. In other words, they are concerned with direction and controlling function of management.

Their activities include:

(a) Assigning of jobs and tasks to various workers.

(b) Issuing guidance and instruction to workers for day-to-day activities.

(c) Maintaining quality as well as quantity of production.

(d) Communicating workers’ problems, suggestions, recommendatory appeals, etc., to the higher level and higher level goals.

(e) Supervising and guide the subordinates.

(f) Training the workers.

(g) Making arrangement of materials, machines, tools etc., for getting the things done.

(h) Preparing periodical reports about the performance of the workers.


Levels of Management – With the Functions of Middle Level Management

The number of levels of management in an organisation depends on the size, the nature of work, the technology used and some other factors of the organisation.

1. Top Level Management:

It is the highest level in the hierarchy of authority. It consists of the Board of Directors, Chief Executive Officer (or the Managing Director), General Manager.

Following are the functions of the top level management:

(i) To determine the objectives and policies of the organisation.

(ii) To set up plans for the whole organisation.

(iii) To set up the organisation structure.

(iv) To make necessary arrangement for the resources, both human and non-human.

(v) To synchronise various subsystems of the organisation.

(vi) To decide matters which are necessary for the survival and growth of the organ­isation.

(vii) To arrange for funds for the smooth functioning of the business.

(viii) To exercise control on overall activities of the firm.

2. Middle Level Management:

This level exists between the top level management and lower level management. Their main function is to act as a link between the two levels and to co-ordinate matters relating to their departments. They mainly comprise of the departmental heads, deputy managers, R&D officers, chief engi­neers, secretaries, etc.

The functions of the middle level management consist of the following:

(i) To prepare and formulate plans and programmes relating to the departments.

(ii) To arrange for implementation of the orders and instructions of the top level.

(iii) To settle problems and forward suggestions to the upper level, as and where necessary.

(iv) To enable inter and intra departmental co-ordination.

(v) To explain and interpret policy decisions to the lower level.

(vi) To collect performance reports periodically and forward it with recommenda­tions to the higher authorities for proper evaluation.

3. Lower Level Management:

This level is also known as supervisory level or Operating Management level. This level exists between the middle level and the workers. It consists of the foremen, supervisors, inspectors, etc. They issue orders and instructions to the operating employees and guide them in their daily activities.

The functions of the lower level consists of:

(i) Making plans for day-to-day activities and assigning them to the subordinates.

(ii) Getting the work done through proper supervision and guidance.

(iii) Motivating the employees and bringing out the best in the most optimum way.

(iv) Reporting the problems and forwarding the grievances of the workers to the upper level.

(v) Coordinating functions of different classes of workers.

(vi) Arranging security and welfare of the employees.


Levels of Management – Top Level, Middle Level and Lower Level Management

The term levels of management refers to a line of demarcation between various managerial positions in a business organisation. With the increase in the size of the organisation, the levels in the management also increase and vice versa.

The levels of management can be classified into the following categories:

1. Top Level Management:

The top level management is also referred to as the administrative level of management. Top level of management is made up of the Board of Directors, Chief Executive Officer (CEO), Chief Operating Officer (COO), President or Vice-President, etc. The role of top management is setting the goals for the organisation and formulating policies and plans to achieve those goals.

The top level of management is accountable to the shareholders for the performance of the organisation. Top management mainly focusses on planning and coordinating functions.

The salient features of the role of top management in a business organisation are:

(i) Top management sets the goals and objectives of the organisation.

(ii) It lays down broad policies to be followed to achieve the desired results.

(iii) It prepares strategies.

(iv) It appoints middle level management executives.

(v) It provides guidance to subordinates.

(vi) It controls and coordinates all the functions of the organisation.

2. Middle Level Management:

The middle level management is also referred to as the executory level. They are subordinates of the top- level management and are responsible for the organisation and direction of the low-level management. Middle level management is made up of the departmental managers and branch managers. They are the communicators between the top level and the lower level as they transfer information, reports, and other data of the organisation to the top level.

The salient features of the role of middle management in a business organisation are:

(i) They execute the plans of the organisation in accordance with the policies of the top management.

(ii) They make plans for the lower level management.

(iii) They help in controlling and coordinating the activities within the departments.

(iv) They evaluate the performance of the junior staff.

(v) They interpret policies of the top management and explain the future course of action to the lower management level.

(vi) They send performance reports and other data to the top management.

3. Lower Level Management:

The lower level management is also referred to as the supervisory or the operative level of managers. The lower level managers are the first line of managers. They spend most of their time addressing the functions of the business organisation, as instructed by the managers above them. This management level is made up of the foreman, the line boss, the shift boss, the section chief, the head nurse, superintendents, etc.

The salient features of the role of lower management in a business organisation are:

(i) To allocate tasks and responsibilities to the operative employees

(ii) To ensure quality and be responsible for the production quantity

(iii) To give instruction to workers on their day-to-day jobs

(iv) To give periodic reports of the workers to the middle level managers

(v) They communicate with the workers to address their problems.

(vi) They provide training to the workers.

(vii) They ensure that discipline is maintained in the business organisation.

(viii) They motivate the workers to achieve their targets.


Levels of Management: Top Management, Middle Management and Supervisory or Lower Management

“The total task of the manager is not only complex but vast in scope,” says Dalton E. McFarland. Hence, managers are drawn from different areas for different purposes. They do not belong to one discipline. They do not belong to a single and unified professional cadre. The requirements for their technical, human, conceptual and design skills also differ. Their roles, responsibilities and authority also vary widely.

Some are concerned primarily with overall direction, policies, strategies, commitments, etc., while others are concerned more with executing the policies, strategies, etc. On the contrary, some other managers are concerned primarily with getting the actual work done. Due to the diversified and complex nature of managerial work different levels of management prevail in an enterprise.

The level of management means categorisation of managerial personnel in an organisation. The level is based on the requirement of different skills, roles and responsibilities. However, there is no hard and fast rule for the levels of management. It depends on several factors, such as, the nature and size of enterprise, operational diversities, technological factors, human and social factors, managerial philosophy, etc.

There are differences of opinion regarding the levels of management among the authors and experts of management. Some classify the level of management into five, while some put it into four. But some present the level into three. In a typical organisation, there may be three levels of management.

These are:

1. Top Management,

2. Middle Management, and

3. Supervisory or Lower Management.

1. Top Management:

According to Dalton E. McFarland, “The executives at the higher levels of a business organisation are frequently referred to as ‘top management’, a rather loose and inelegant term.” In every organisation top management remains at the top of organizational hierarchy. It is a supreme policy making body. Normally, top management includes Board of Directors, Chairman of the Board, Managing Director and chief Executive Manager as also secretary.

These executives are responsible for the overall performance, growth, stability, profitability, external threats and opportunities, etc. of the enterprise. Hence, organisation’s stability, growth and prosperity depend largely on the skills and abilities of the top management.

Harold Koontz and H. Weihrich state, “At the top management level, conceptual and design abilities and human skills are specially valuable, but there is relatively little need for technical abilities.” However, executives under top management are both specialists and generalists. The Board of Directors is the supreme executive of the enterprise. The Board is responsible for the formulation of overall policies, strategies and plans for the enterprise. The Board is answerable to the owners or the shareholders.

According to Koontz and O’Donnell, the following are some of the important functions of the Board of Directors:

(i) Trusteeship

(ii) Determination of enterprise objectives

(iii) Selection of executives

(iv) Assuring adequate plans and checking on results

(v) Approval of budgets

(vi) Securing long-range stability

(vii) Distribution of earnings

(viii) Checking on plans and operations through discerning questions.

The members of the Board should be men of deep understanding and tolerance. They should act as mentors, counsellors, critics, catalysts, guardians, technicians and friends. They must also possess the power of imagination, initiative, judgement and decision making.

In every organisation the Board decides the objectives and policies followed by strategies. But the actual execution of these rests on the Managing Director or General Manager. Managing Director is known as chief Executive. In some companies, President or Secretary is also known as Chief Executive.

The Chief Executive acts as a link between the Board and other managerial personnel in the enterprise. He is responsible for interpreting the goals, policies and strategies formulated by the Board and communicating them to the lower level managerial personnel. He is also responsible for ensuring a cohesive and sound organisation structure in the enterprise. He is answerable to the Board.

The Chief Executive normally performs the following functions:

(i) Acting as a link between the Board and the rest of the organisation.

(ii) Formulating basic operating policies and basic organisation structure.

(iii) Administering finances and financial control, production and sales activities, procurement activities, pricing, scheduling, etc.

(iv) Maintaining cohesive and effective coordination in the enterprise.

(v) Promoting and maintaining a high level efficiency in the enterprise with minimum costs.

(vi) Formulating plans for growth, expansion and diversification.

(vii) Maintaining contact with external environment keeping in view the organisation’s plans and policies, such as, government, trade unions and other relevant bodies. In this way, the Chief Executive is responsible for running the entire business effectively, efficiently and economically.

2. Middle Management:

The middle management is the second layer of management in a three-level managerial hierarchy. It comes after top management and before supervisory management. Thus, it acts as a link between the top and supervisory management. According to McFarland, “This concept, popularized by Niles in the early 1940’s, identifies a group that tends to overlap the executive and manager groups. The concept of middle management does not have clear boundaries….”

Middle management includes mainly departmental managers, deputy managers and assistant managers. It also includes branch plant managers. These executives are responsible primarily to run the respective departments effectively and economically. They work on the basis of the plans and policies formulated by the top management. According to McFarland, they are “concerned with the execution of policies, decisions, and plans and with the implementation and communication of basic administrative decisions respecting goals, strategies and policies.”

As a matter of fact, the middle management assists the top management in arriving at appropriate decisions and guides the lower management or the subordinates in carrying out the policies. The management at this level transmits various orders, decisions, instructions and guidelines downwards. On the other hand, it also transmits problems, grievances, suggestions, etc. upward. Thus, middle management stands at the mid-point of communication system within the organisation.

This management does not only maintain contact with day-to-day operations of the department, but it also participates in operating decisions, implementing policy decisions and making plans for achieving goals. The executives at this level are concerned with specific results affecting the success of the organisation. They require human and conceptual skills more than the technical skills.

3. Supervisory Management:

Supervisory management is the last layer in the organizational hierarchy. It comes below the middle management. Hence, it is also termed as lower-level management. Office managers, superintendents, chief supervisors, supervisors, chief foremen and foremen are commonly put into this category. They are in direct contact with the workers. They have less discretion in the matters of carrying out their duties. They are concerned primarily with operating plans and policies.

They are less involved in policy decisions. Their work is more technical, operational and personnel in nature. According to McFarland, “Their function is to carry out operating plans and policies within the framework of plans and policies developed by the administrative and executive levels.” As their task is operational in nature, they need more technical knowledge than conceptual understanding.

Harold Koontz and H. Weihrich state, “…technical skills are of greatest importance at the supervisory level. Human skills are also helpful in the frequent interactions with subordinates. Conceptual skills, on the other hand, are usually not critical for lower-level supervisors.”

Their main functions are as under:

(i) Formulating day-to-day production plans on the basis of the goals decided by the top management,

(ii) Assigning jobs to the workers in accordance with their skills,

(iii) Keeping effective and close watch over workers when they are on work,

(iv) Watching and recording performance of workers at regular intervals,

(v) Detecting defects responsible for poor performance and taking corrective measures at the originating levels.

(vi) Evaluating the performance and quality of workers,

(vii) Establishing coordination among work and workers,

(viii) Maintaining personal contact with the workers, and

(ix) Sending performance reports to upper management.


Levels of Management – Top level (Administrative), Middle level (Executive) and Lower level (Supervisory or Operative)

The chain of command or scalar chain is a principle of a formal organisation structure. It refers to a formal line of authority in the organisation from the top level (such as – CEO or President) down to lower level (such as – workers or supervisors). The rationale is to permit co-ordination of activities to accomplish the organisational goals.

Hierarchy of the positions in management is called levels of management. Traditionally organisations with bureaucratic structures have more levels in an organisation than the decentralised organisations. The number of levels in the organisation hierarchy depends upon the size of the business and the number of employees.

The levels of management can be classified into three broad categories:

1. Top level (Administrative)

2. Middle level (Executive) .

3. Lower level (Supervisory or Operative).

1. Top Level Management:

The top level management constitutes board of directors, CEOs or President. It includes the group of people essential for directing the efforts of other people. The top management has maximum authority and are accountable to the shareholders for the overall management of the organisation.

The main functions of the top level management are:

(i) To formulate the overall objectives of the enterprise.

(ii) To frame the plans and policies to achieve the objectives.

(iii) To organise the activities of the people working at middle level.

(iv) To control and co-ordinate the activities of the departments.

(v) To maintain a contact with the outside world, e.g., government, trade unions, etc.

(vi) Design a system of monitoring and evaluating the performance.

(vii) To assemble the physical, financial and human resources to implement the plans.

2. Middle Level Management:

The middle level of management includes departmental heads, divisional managers and branch heads. They are responsible to the top management for functioning of their departments. They execute the plans and policies made at the top level.

The middle level management performs the following functions:

(i) To interpret and explain the policies made by the top management to lower level.

(ii) To motivate the people to work for organisational goals.

(iii) To co-operate with other departments for the smooth functioning of the organisation.

(iv) To implement the plans framed at the top level.

(v) To co-ordinate the activities within the department and with other departments.

(vi) To evaluate the performance of managers.

(vii) To ensure co-operation among different divisions to achieve the organisations objectives.

(viii) To arrange for necessary material, machinery and tools for getting things done.

3. Lower Level Management:

Lower level management also known as supervisory or operative management includes foremen, supervisors, superintendent, etc. They are responsible for the daily management of the workers, and form a link between the management and operative staff. The authority of the managers is limited. They pass on the instructions to the workers; maintain discipline among the workers and report to the middle level management.

The main functions of the supervisory management are as follows:

(i) To guide and instruct the workers for day-to-day activities.

(ii) To represent the grievance of the workers before the middle level management.

(iii) To provide for the safe and secure working environment.

(iv) To make sure that the quality standards are maintained by the workers.

(v) They motivate the employees to work in the desired direction.

(vi) To provide necessary training to the workers.

(vii) To prepare periodic reports of the performance of the workers.

(viii) To maintain discipline and good relations with the workers.


What are the difference Levels of Management: Top Level ,Middle Level and Lower Level Management

If an organization needs to function effectively, a proper organization structure is required. This structure comprises of people/staff with varied experience and exposure. The nature of management continues to remain the same, whether the organization is to be managed as a family, a club or an enterprise. For effective and efficient function of an organization, the task is divided into three levels i.e., Top, Middle and Lower levels of management.

Each level has its own roles and responsibilities and ultimately helps in making the organization’s vision come true. Top level authorities such as vice president, heads of department, etc., help in formulating policies and decision-making. Those at the Middle level act as a link between the top and the lower. While the lower level management focuses more on operational activities.

There are three different levels of management:

1. Top level management, consists of Board of Directors, Managing Directors or President.

2. Middle level management, consists of Vice President – Marketing/Finance/Production.

3. Lower or operating level management, consists of Floor Managers/Supervisors.

1. Top Level Management:

Top level management focuses on overall policy formulation of the organization by doing a SWOT analysis of the organization. After consultation and discussion with the management at the mid-level, the Top Management frames policies on different functional areas. Framing up a policy such as, for instance, production policy indicates schedule of productions to be completed.

Product policy lays down size, color, material, design etc. Marketing policy focuses on various channels through which sales could be carried forth. An HR policy deals with recruitment and placement. It includes organizing which deals with allocation of duties to the personnel.

2. Middle Level Management:

Middle level management on the other hand works on implementing the policies and plans formulated by the top level. It comprises of Vice President of the concerned functional area or departmental heads who will lead the group of workers to the planned targets and provide them with necessary resources in order to get the jobs done. This group is responsible for the execution and interpretation of policies throughout the organization and to assist in the successful operations assigned to the concerned division or departments.

At this level the managers have to plan the operations, pass on the instructions laid by the top management to the appropriate divisions or staff, collect the resources required and control/regulate the work. Managers at this level are responsible for leading all functions within each department; they are the ones who provide guidance and structure and support for a purposeful enterprise.

3. Lower Level Management:

This level comprises of supervisors, foreman, and executives assisted by a number of workers who carry out the activities as per schedule or demand. Though authority and responsibility in the organization as compared to the middle and top level of management is less, the management at this level too does play a vital role in implementing the policies designed by the top. They have to comply with the rules and guidelines made by the higher authorities of the organization.

The plans developed and scheduled for application by the top level management will fail if the workers at the lower level do not fully appreciate the work allotted to them nor enjoy the nature of their work. The quality and quantity of the work done will depend upon the performances of the workers at this level. The result or goal, they as a team, help in achieving would only reflect the hard and effective effort they have put in the form of work to attain their goals.

The supervisors at this level have to maintain high quality standards of the manufactured product, assign duties to the workers as per planned schedules given by the top and middle level management. They also are responsible for maintaining the discipline among themselves and increase the spirit of work among the workers.


Levels of Management: Top, Middle, Supervisor or Low Level Management (with Functions)

‘Levels of Management’ means to a line of demarcation between various managerial positions in a business organisation. In most organisations, there are generally three levels of management in the organisation hierarchy, namely- (i) top management, (ii) middle level management, and (iii) first line or supervisory management.

The number of levels of management increases when the size of the business increases and work-force increases. According to Dale, “As a company becomes larger and more complex there is a natural tendency for the chain of command to lengthen. Even though the company marks no effort to limit span of control to any given number if there is extensive growth, there comes a time then commands at various levels have to be split up and another layer of supervision inserted.”

Actually, there is a limit to the number of subordinates a person can supervise. Therefore, in order to make supervision work effective, levels of management are increased accordingly.

The intensity of different management function at various levels of management is quite different. Before, reviewing the functions business of management at various level, we should know about the various levels of management in a business organisation.

The levels of management may broadly be divided into three, namely:

1. Top Management:

Top management in a business concern consists of the Board of Directors and the Chief Executive or the managing Director. They are ultimate source of authority in the modern organisation. They set the business goals and establish the policies to carry them out. Top management of a concern performs all the function of management, namely, planning, organising, directing and controlling.

But it spends more time on planning and organising than the middle or lower level management. It is responsible to the shareholders or owners of the concern for its overall management. All the policy decisions of the business are taken by the board of directors and the chief executive and they periodically review the implementation of various business decisions.

The Board of director concerns itself with review and decision upon matter of major importance to the concern’s success. The Board reserves authority and responsibility for deciding long-term objectives, policies, programmers, and budgets that apply to the concern as a whole; it approves the overall concern organisation and exercise control through review of overall financial and operating result of that concern.

The Board of Directors reserves authority for commitment of significant amounts of capital funds. It raises and borrows capital and authorises capital expenditures for specific period. The operative work of the Board is relatively limited in nature. It is performed by the chief executive of the concern who is appointed by the Board. The Board of director provides, “Invaluable support to the chief executive as mentors, councilors and critics.”

The Chief Executive is the managing director or president of the business concern. He is a member of the Board and represent a link between the Board and other managerial personnel. Thus he is accountable only to the Board and is organisationally located above all other organisational elements.

As a result, only he can handle problem involving two or more subordinate units with perspective and objectivity. Unless special provision is made for coordination at lower levels, all management and operating problems of consequences come to focus in this level of managements.

The responsibilities of chief executive position include the interpreting of organisational policies and communicating the goals of the business organisation. The chief executive thinks and takes business decisions for the long-run welfare of the business enterprise. He puts into effect the policy decisions taken by the Board and maintain effective coordination in the business organisation.

From the nature of functions of top managers, it is clear that they are expected to possess and use more conceptual skill than human and technical skill. The members of the top management of concern should have the ability to develop new concepts and to visualise the business enterprise as a whole.

To quote B. Yuill. “It is the function of top management of watch, interpret, exploit, or where necessary, counter external influences with appropriate adjustments in the functional authority and status structures of the organisation. It is top management duty to protect the integrity of the business organisation so that it can survive for its own employee’s the shareholder’s the suppliers, and the customers’ interests and for the general good of the social and economic system within which it operates.”

2. Middle Level Business Management:

Middle management acts with and under top management to accomplish the objectives of the modern business organisation.

Mary C. Niles in her book ‘Middle Management’, has laid down the seven important functions of middle management, which are as under:

(i) To run the details of the business organisation, leaving the top officers as free as possible of their management responsibilities.

(ii) To cooperate in making a smoothly functioning business organisation.

(iii) To understand the inter locking of departments in important business policies.

(iv) To achieve the coordination between the different parts of the business organisation.

(v) To build up a contended and efficient staff where reward is given according to capacity and merit and not according to chance or length of service.

(vi) To develop leaders for the future by board training and experience of employees

(vii) To build a company spirit where all are working to provide a product or service wanted by consumers.

Middle management may be upper middle management and simple middle management. In small business organisations, there is only one layer of middle management but where both these exist, the upper middle management gets authority direct from the top business management.

This level consists of various functional heads such as production manager, finance manager and marketing manager who are responsible for their management functions. In big concerns, these managers are also members of the Board of Directors. In such a case they become a part of the top management of the concern.

Whatever may be the case, the job of various functional managers is to organise their departments to implement the top management’s business policies. They are concerned with the results in their areas. For performing their responsibilities, they should have more conceptual and human skill as compared to technical skills of low level executives.

In business organisations where upper middle management exists, simple middle management will include heads of various sections, superintendents and branch managers, they are concerned with the carrying out of jobs assigned to them by the departmental managers.

They also perform the managerial functions of planning organising, directing and control. They issue instructions to first line or junior managers and supervise their work. Every middle level manager is concerned with the overall management of a concern created in any functional area.

3. Supervisor or Low Level Management:

Supervisory management refers to grades or business executive leadership whose work has to do largely personal oversight and direction of operative employees of the concern. This level includes supervisors, foremen, finance and accounts officers, sales officers etc. The essential feature of this level of management is that managers at this level are in direct contact with the operative employees of the concern.

They are more concerned to planning and organising business. They implement the policies of top management communicated to them by the middle level managers of the concern.

Managers at the low level are also known as first line supervisors of the concern. They represent a link between the management and the workers of the concern. They plan day to day production schedules within the goals set from above. They assign tasks to the operative employees, guide them and take corrective action on the spot.

So they should possess more of technical skill than the upper levels management. They are concerned with planning and organising at their unit level management. They can fix the business goals only for the short-run. They perform the control function by evaluating the performance of operative force and then communicate the information to higher in the business organisation.

They must also possess the requisite human skill as they have to deal with the workers of concern to get things done from them. They are responsible for developing harmonious relations among the workers and help them in solving their work problems. They must represent the concern of the workers and the workers to the concern

From the above discussion, it can be concluded that all managers-top, middle and first line-perform the same managerial functions in their business concern. The main difference between their jobs in terms of management function is emphasis. The top management of concern spends more time on planning and organising than does the middle or first line management of the concern.

The middle management spend more time in directing and controlling than the top management of the organisation. The first line managers spend a great deal of time in directing the workers of the concern. But most managers, at various time perform all the managerial function through varying degrees.

A management principle is a statement of a general truth about business organisation or management. In the words of Herbert. G. Hicks, ‘Principles of management are the guiding rules of laws for managerial action.’ They are designed primarily to provide for better understanding of business circumstances and improving the organisational performance of a concern.


Why do managers use operational plans?

An operational plan helps managers and department heads define their daily tasks, responsibilities, and activities in detail. It also illustrates how individual team members contribute to the overall company or department goals.

What level of management does operational planning?

Definition of Operational Planning In this, short run objectives of the company are determined, and the means to meet those objectives is also discovered in the process. Mid-level management performs the operational planning functions.

Are lower level managers involved in planning?

Managers at the lower level of the management are more concerned to planning and organizing the operations at the departmental level. They implement the policies of the organization. They also play the supervisory role since they are in direct contact with the employees at the workplace.

Which type of planning is done by lower level management?

Operational plans are the plans that are made by frontline, or low-level, managers. All operational plans are focused on the specific procedures and processes that occur within the lowest levels of the organization.