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Levels and Functions of Management

Last updated date: 01st Mar 2024
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Levels of Management

Management in organizations and businesses refers to the process of getting people, tools, and devices together to achieve desired goals. It requires an efficient allocation of resources, planning, directing, and controlling. Organizations can be viewed as systems and management is human action (including design) that facilitates the production of useful outcomes from this system.

Introduction of Levels and Functions of Management

An organization has many different kinds of resources like human resources, technological resources, financial resources, and natural resources. The deployment and manipulation of all these resources come under the umbrella of management goals.

In today’s time, businesses have become more complex, and with that, management processes have also become more complicated and need a higher level of degree and skill.

Given the technological advancements made, the management can no longer be done by a single person. That is why different parts of management are now assigned to varying levels of management throughout the enterprise. Hence, now there is a hierarchy with different levels of responsibility and authority in the management, department-wise executive-level.

The levels of management in a company depend on the size and nature of the business. However, all the levels of management work in tandem to achieve the common goal of the organization. In the sections below, we will learn about the functions of different levels of management.

Levels of Management

There are primarily three broad levels of management in any organization. Segmenting management into different levels of management is vital for the performance and productivity of the organization as a whole.  The levels are defined below:

  • Top-Level Management or the Administrative Level:

People who have the ultimate power and authority over the business fall in this level of management. Board of directors, managing director (MD), chief executive officer (CEO) are some of the top-level managerial positions.


Determining and overseeing the goals, procedures, and policies of the business are the functions of top-level management. The list of roles and responsibilities of this level includes:

  • Laying down the vision, goals, and broad policies of the organization.

  • Preparing strategies for the business.

  • Instructing how to prepare the department-wise budget, schedule, processes, etc.

  • Encouraging harmony and boosting collaboration.

  • Appointing executives for the middle layer of management or the department managers.

  • Communicating with the outside world to build the face of the brand.

  • Responsibility towards shareholders to maintain the performance of the company.

  • Middle-Level Management:

This is also called executive level management. They are subordinates to the top-level management, and their job is to direct and organize the low-level managerial personnel. In a small organization, there could be just one layer of middle-level management. Still, in larger companies, the middle section can further be divided into senior and junior level executives. The main tasks of middle-level management are:

  • Interpret the policies of the company.

  • The directive and plans laid out by the top-level managers are executed by the middle-level under these policies.

  • Inspire lower-level employees to better their performances.

  • Send reports and data to higher levels of management promptly.

  • Coordinate and participate in the hiring process of lower-level management.

  • Establishing plans for the subunits of the organization under their supervision.

  • The Lower Level of Management or Operative Level:

This level is also known as the supervisory level, which comprises section officers, superintendents, foremen, supervisors, etc. They execute and coordinate day-to-day workflows to make sure deliverables are met on time, and the project reaches its completion. They are the first line of managers featured at the base of the operations, and their fundamental job is to communicate the problems of the firm to the higher levels. Their main functions include:

  1. Assigning tasks and responsibilities to workers.

  2. Instructing workers in their daily activities.

  3. Arranging for necessary tools, machinery, equipment, etc which are necessary to carry out the daily tasks of workers.

  4. Ensure quality work is done and the quantity of production is in line with business goals.

  5. Report the work status periodically to the higher levels of management.

  6. Improving the company image in the eyes of the workers as they are in direct contact with them.

  7. Maintaining decorum, harmony, and discipline at the workplace.

Functions of Levels of Management

Henri Fayol, a French mining engineer, initially identified five elements of management. Now there are four commonly accepted functions of management that a manager needs to perform as part of his daily activity. The different levels of management and their functions are summarized below:

  1. Planning:

The future course of action is based on the basic planning done by managers. The predetermined goals are taken as the base to chalk out the future course of the most appropriate actions in the planning phase. Planning, in a nutshell, gives answers to:

  1. What job to do.

  2. When to do the job.

  3. How to do the job.

Planning, in other words, is deciding on the best possible way of achieving the goals.

  1. Organizing:

Once the plan is in place for a project or task, the next step is to procure resources for achieving the goal. The resources are of various kinds; human, physical, financial, technological, raw materials, etc. It also involves developing a productive relationship between the resources to achieve organizational goals most efficiently in the most efficient manner. As a process, organizing involves:

  1. Identifying activities to be performed.

  2. Group the activities into different departments.

  3. Assigning duties based on activities.

  4. Identifying responsible people for the activities and delegating authority.

  5. Coordinating relationships.

  1. Directing or Leading:

Directing is an interpersonal aspect of management that deals with guiding, motivating, influencing, and supervising subordinates. It has 3 elements:

  1. Supervision -

It is the act of watching and directing the workers.

  1. Motivation -

Management needs to infuse subordinates with zeal and passion for their work. They could use positive, negative, monetary, or non-monetary incentives to achieve this.

  1. Communication -

To bridge the gaps in understanding, communication in the form of sharing information, opinions, etc. is an essential part of leading.

  1. Controlling:

In this step, one measures the actual achievements against the goals set. If there are deviations, one needs to take corrective measures. The main objective of controlling is to ensure things are conforming to the standard and guidelines set. It comprises following steps:

  1. Establish what is meant by standard performance.

  2. Measure the actual performance.

  3. Compare the actual with the standard.

  4. Take corrective actions to bridge the gap, if any, between the standard and actual performances.

FAQs on Levels and Functions of Management

1. What are the Different Types or Styles of Management?

The management process has changed over the years because of which there has been a change in the style of management. Let us go through some of the common styles of management used in companies:

  • Traditional Management - In such management styles, a hierarchy of managerial positions are maintained like senior-level, middle-level, and low-level management. Here, the expectations and goals are set up by the manager, and employees carry it out. The manager is the one who reaps the rewards of meeting the goals.

  • Team Management - In this style manager does not dictate but helps the team with his/her experience to meet the goals. Once the goals are achieved, the entire team gets the reward for the achievement.

  • Servant Management - In servant management, employees are deemed as experts in their field. Managers provide the resources that employees need to carry out their jobs. 

2.  How has Management Perspective Changed Over Time?

Management is a field that is always evolving with many formal and informal approaches. Many new perspectives are changing the face of management in fields like manufacturing, technology, and software. Let us see changes in some of the industries in brief:

  • Software - Scrum and Agile are the two big words that define the management style in the software industry. Scrum was used in the 1980s but is now a prevalent style in the 21st century. Scrum is based on multiple iterations of the whole development cycle which is a feedback-driven approach. Scrum does not follow the traditional hierarchical model of management. It is more team-oriented and promotes transparency, ownership, focus, and commitment amongst all the team players.

  • Social Entrepreneurship - A social entrepreneur is now more conscious about the impact than monetary profits. Traditional management perspectives are being replaced by grassroots ones. The managers are now focused on poverty alleviation, education, healthcare, and community development. The management style used here is non-hierarchical, innovative, and focussed.

3. What is the importance of Management?

The importance of management is described as under:

  • It helps in Achieving Group Goals 
  • Optimum Utilization of Resources 
  • This helps in cost reduction.
  • Establishes Sound Organization
  • Establishes Equilibrium 

4. What are Management Skills?

Management skills can be defined as some specific abilities that an executive/ manager should inculcate in order to fulfill specific tasks in an organization. These skills can be developed through learning and by getting practical experience as a manager.  

5. Is management a science or art?

Management is a science because of several reasons such as it has universally accepted principles, it has cause and effect relationships, etc. and at the same time, it is an art as it requires perfection through practice, practical knowledge, creativity, personal skills, etc. Thus; Management is both art and science.

6. What is the difference between management and administration?

Management is a systematic way of managing people and things within the organization. On the other hand, management is an activity of business and functional level whereas; administration is a high-level activity. Therefore; these are some of the differences between management and administration.

7. Who started management?

Henri Fayol, a Frenchman, is credited with developing the management concepts of planning, organizing, coordination, command, and control (Fayol, 1949), which were the precursors of today's four basic management principles of planning, organizing, leading, and controlling.