Management Levels – strategy, organization, examples, manager, school, type, company, hierarchy, workplace, business


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Managers are organizational members who are responsible for the work
performance of other organizational members. Managers have formal
authority to
use organizational resources and to make decisions. In organizations,
there are typically three levels of management: top-level, middle-level,
and first-level. These three main levels of managers form a hierarchy, in
which they are ranked in order of importance. In most organizations, the
number of managers at each level is such that the hierarchy resembles a
pyramid, with many more first-level managers, fewer middle managers, and
the fewest managers at the top level. Each of these management levels is
described below in terms of their possible job titles and their primary
responsibilities and the paths taken to hold these positions.
Additionally, there are differences across the management levels as to
what types of management tasks each does and the roles that they take in
their jobs. Finally, there are a number of changes that are occurring in
many organizations that are changing the management hierarchies in them,
such as the increasing use of teams, the prevalence of outsourcing, and
the flattening of organizational structures.


Top-level managers, or top managers, are also called senior management or
executives. These individuals are at the top one or two levels in an
organization, and hold titles such as: Chief Executive Officer (CEO),
Chief Financial Officer (CFO), Chief Operational Officer (COO), Chief
Information Officer (CIO), Chairperson of the Board, President, Vice
president, Corporate head.

Often, a set of these managers will constitute the top management team,
which is composed of the CEO, the COO, and other department heads.
Top-level managers make decisions affecting the entirety of the firm. Top
managers do not direct the day-to-day activities of the firm; rather, they
set goals for the organization and direct the company to achieve them. Top
managers are ultimately responsible for the performance of the
organization, and often, these managers have very visible jobs.

Top managers in most organizations have a great deal of managerial
experience and have moved up through the ranks of management within the
company or in another firm. An exception to this is a top manager who is
also an entrepreneur; such an individual may start a small company and
manage it until it grows enough to support several levels of management.
Many top managers possess an advanced degree, such as a Masters in
Business Administration, but such a degree is not required.

Some CEOs are hired in from other top management positions in other
companies. Conversely, they may be promoted from within and groomed for
top management with management development activities, coaching, and
mentoring. They may be tagged for promotion through succession planning,
which identifies high potential managers.


Middle-level managers, or middle managers, are those in the levels below
top managers. Middle managers’ job titles include: General manager,
Plant manager, Regional manager, and Divisional manager.

Middle-level managers are responsible for carrying out the goals set by
top management. They do so by setting goals for their departments and
other business units. Middle managers can motivate and assist first-line
managers to achieve business objectives. Middle managers may also
communicate upward, by offering suggestions and feedback to top managers.
Because middle managers are more involved in the day-to-day workings of a
company, they may provide valuable information to top managers to help
improve the organization’s bottom line.

Jobs in middle management vary widely in terms of responsibility and
salary. Depending on the size of the company and the number of
middle-level managers in the firm, middle managers may supervise only a
small group of employees, or they may manage very large groups, such as an
entire business location. Middle managers may be employees who were
promoted from first-level manager positions within the organization, or
they may have been hired from outside the firm. Some middle managers may
have aspirations to hold positions in top management in the future.


First-level managers are also called first-line managers or supervisors.
These managers have job titles such as: Office manager, Shift supervisor,
Department manager, Foreperson, Crew leader, Store manager.

First-line managers are responsible for the daily management of line
workers—the employees who actually produce the product or offer the
service. There are first-line managers in every work unit in the
organization. Although first-level managers typically do not set goals for
the organization, they have a very strong influence on the company. These
are the managers that most employees interact with on a daily basis, and
if the managers perform poorly, employees may also perform poorly, may
lack motivation, or may leave the company.

In the past, most first-line managers were employees who were promoted
from line positions (such as production or clerical jobs). Rarely did
these employees have formal education beyond the high school level.
However, many first-line managers are now graduates of a trade school, or
have a two-year associates or a four-year bachelor’s degree from



Managers at different levels of the organization engage in different
amounts of time on the four managerial functions of planning, organizing,
leading, and controlling.

Planning is choosing appropriate organizational goals and the correct
directions to achieve those goals. Organizing involves determining the
tasks and the relationships that allow employees to work together to
achieve the planned goals. With leading, managers motivate and coordinate
employees to work together to achieve organizational goals. When
controlling, managers monitor and measure the degree to which the
organization has reached its goals.

The degree to which top, middle, and supervisory managers perform each of
these functions is presented in Exhibit 1. Note that top managers do
considerably more planning, organizing, and controlling than do managers
at any other level. However, they do much less leading. Most of the
leading is done by first-line managers. The amount of planning,
organizing, and controlling decreases down the hierarchy of management;
leading increases as you move down the hierarchy of management.

Exhibit 1 Time Spent on Management Functions at Different Management Levels

Exhibit 1

Time Spent on Management Functions at Different Management Levels


In addition to the broad categories of management functions, managers in
different levels of the hierarchy fill different managerial roles. These
roles were categorized by researcher Henry Mintzberg, and they can be
grouped into three major types: decisional, interpersonal, and


Decisional roles require managers to plan strategy and utilize resources.
There are four specific roles that are decisional. The


role requires the manager to assign resources to develop innovative goods
and services, or to expand a business. Most of these roles will be held by
top-level managers, although middle managers may be given some ability to
make such decisions. The

disturbance handler

corrects unanticipated problems facing the organization from the internal
or external environment. Managers at all levels may take this role. For
example, first-line managers may correct a problem halting the assembly
line or a middle level manager may attempt to address the aftermath of a
store robbery. Top managers are more likely to deal with major crises,
such as requiring a recall of defective products. The third decisional
role, that of

resource allocator,

involves determining which work units will get which resources. Top
managers are likely to make large, overall budget decisions, while middle
mangers may make more specific allocations. In some organizations,
supervisory managers are responsible for determine allocation of salary
raises to employees. Finally, the


works with others, such as suppliers, distributors, or labor unions, to
reach agreements regarding products and services. First-level managers may
negotiate with employees on issues of salary increases or overtime hours,
or they may work with other supervisory managers when needed resources
must be shared. Middle managers also negotiate with other managers and are
likely to work to secure preferred prices from suppliers and distributors.
Top managers negotiate on larger issues, such as labor contracts, or even
on mergers and acquisitions of other companies.


Interpersonal roles require managers to direct and supervise employees and
the organization. The


is typically a top of middle manager. This manager may communicate future
organizational goals or ethical guidelines to employees at company
meetings. A


acts as an example for other employees to follow, gives commands and
directions to subordinates, makes decisions, and mobilizes employee
support. Managers must be leaders at all levels of the organization; often
lower-level managers look to top management for this leadership example.
In the role of


a manger must coordinate the work of others in different work units,
establish alliances between others, and work to share resources. This role
is particularly critical for middle managers, who must often compete with
other managers for important resources, yet must maintain successful
working relationships with them for long time periods.


Informational roles are those in which managers obtain and transmit
information. These roles have changed dramatically as technology has
improved. The


evaluates the performance of others and takes corrective action to
improve that performance. Monitors also watch for changes in the
environment and within the company that may affect individual and
organizational performance. Monitoring occurs at all levels of management,
although managers at higher levels of the organization
are more likely to monitor external threats to the environment than are
middle or first-line managers. The role of


requires that managers inform employees of changes that affect them and
the organization. They also communicate the company’s vision and

Managers at each level disseminate information to those below them, and
much information of this nature trickles from the top down. Finally, a


communicates with the external environment, from advertising the
company’s goods and services, to informing the community about the
direction of the organization. The spokesperson for major announcements,
such as a change in strategic direction, is likely to be a top manager.
But, other, more routine information may be provided by a manager at any
level of a company. For example, a middle manager may give a press release
to a local newspaper, or a supervisor manager may give a presentation at a
community meeting.


Regardless of organizational level, all managers must have five critical
skills: technical skill, interpersonal skill, conceptual skill, diagnostic
skill, and political skill.


Technical skill involves understanding and demonstrating proficiency in a
particular workplace activity. Technical skills are things such as using a
computer word processing program, creating a budget, operating a piece of
machinery, or preparing a presentation. The technical skills used will
differ in each level of management. First-level managers may engage in the
actual operations of the organization; they need to have an understanding
of how production and service occur in the organization in order to direct
and evaluate line employees. Additionally, first-line managers need skill
in scheduling workers and preparing budgets. Middle managers use more
technical skills related to planning and organizing, and top managers need
to have skill to understand the complex financial workings of the


Interpersonal skill involves human relations, or the manager’s
ability to interact effectively with organizational members. Communication
is a critical part of interpersonal skill, and an inability to communicate
effectively can prevent career progression for managers. Managers who have
excellent technical skill, but poor interpersonal skill are unlikely to
succeed in their jobs. This skill is critical at all levels of management.


Conceptual skill is a manager’s ability to see the organization as
a whole, as a complete entity. It involves understanding how
organizational units work together and how the organization fits into its
competitive environment. Conceptual skill is crucial for top managers,
whose ability to see “the big picture” can have major
repercussions on the success of the business. However, conceptual skill is
still necessary for middle and supervisory managers, who must use this
skill to envision, for example, how work units and teams are best


Diagnostic skill is used to investigate problems, decide on a remedy, and
implement a solution. Diagnostic skill involves other
skills—technical, interpersonal, conceptual, and politic. For
instance, to determine the root of a problem, a manager may need to speak
with many organizational members or understand a variety of informational
documents. The difference in the use of diagnostic skill across the three
levels of management is primarily due to the types of problems that must
be addressed at each level. For example, first-level managers may deal
primarily with issues of motivation and discipline, such as determining
why a particular employee’s performance is flagging and how to
improve it. Middle managers are likely to deal with issues related to
larger work units, such as a plant or sales office. For instance, a
middle-level manager may have to diagnose why sales in a retail location
have dipped. Top managers diagnose organization-wide problems, and may
address issues such as strategic position, the possibility of outsourcing
tasks, or opportunities for overseas expansion of a business.


Political skill involves obtaining power and preventing other employees
from taking away one’s power. Managers use power to achieve
organizational objectives, and this skill can often reach goals with less
effort than others who lack political skill. Much like the other skills
described, political skill cannot stand alone as a manager’s skill;
in particular, though, using political skill without appropriate levels of
other skills can lead to promoting a manager’s own career rather
than reaching organizational goals. Managers at all levels require
political skill; managers must avoid others taking control that they
should have in their work positions. Top managers may find that they need
higher levels of political skill in order to successfully operate in their
environments. Interacting with competitors, suppliers, customers,
shareholders, government, and the public may require political skill.



There are a number of changes to organizational structures that influence
how many managers are at each level of the organizational hierarchy, and
what tasks they perform each day.

Exhibit 2: Flat vs. Tall Organizational Hierarchy

Exhibit 2: Flat vs. Tall Organizational Hierarchy


Organizational structures can be described by the number of levels of
hierarchy; those with many levels are called “tall”
organizations. They have numerous levels of middle management, and each
manager supervises a small number of employees or other managers. That is,
they have a small span of control. Conversely, “flat”
organizations have fewer levels of middle management, and each manager has
a much wider span of control. Examples of organization charts that show
tall and flat organizational structures are presented in Exhibit 2.

Many organizational structures are now more flat than they were in
previous decades. This is due to a number of factors. Many organizations
want to be more flexible and increasingly responsive to complex
environments. By becoming flatter, many organizations also become less
centralized. Centralized organizational structures have most of the
decisions and responsibility at the top of the organization, while
decentralized organizations allow decision-making and authority at lower
levels of the organization. Flat organizations that make use of
decentralization are often more able to efficiently respond to customer
needs and the changing competitive environment.

As organizations move to flatter structures, the ranks of middle-level
managers are diminishing. This means that there a fewer opportunities for
promotion for first-level managers, but this also means that employees at
all levels are likely to have more autonomy in their jobs, as flatter
organizations promote decentralization. When organizations move from
taller to flatter hierarchies, this may mean that middle managers lose
their jobs, and are either laid off from the organization, or are demoted
to lower-level management positions. This creates a surplus of labor of
middle level managers, who may find themselves with fewer job
opportunities at the same level.


A team is a group of individuals with complementary skills who work
together to achieve a common goal. That is, each team member has different
capabilities, yet they collaborate to perform tasks. Many organizations
are now using teams more frequently to accomplish work because they may be
capable of performing at a level higher than that of individual employees.
Additionally, teams tend to be more successful when tasks require speed,
innovation, integration of functions, and a complex and rapidly changing

Another type of managerial position in an organization that uses teams is
the team leader, who is sometimes called a project manager, a program
manager, or task force leader. This person manages the
team by acting as a facilitator and catalyst. He or she may also engage
in work to help accomplish the team’s goals. Some teams do not have
leaders, but instead are self-managed. Members of self-managed teams hold
each other accountable for the team’s goals and manage one another
without the presence of a specific leader.


Outsourcing occurs when an organization contracts with another company to
perform work that it previously performed itself. Outsourcing is intended
to reduce costs and promote efficiency. Costs can be reduced through
outsourcing, often because the work can be done in other countries, where
labor and resources are less expensive than in the United States.
Additionally, by having an out-sourcing company aid in production or
service, the contracting company can devote more attention and resources
to the company’s core competencies. Through outsourcing, many jobs
that were previously performed by American workers are now performed
overseas. Thus, this has reduced the need for many first-level and
middle-level managers, who may not be able to find other similar jobs in
another company.

There are three major levels of management: top-level, middle-level, and
first-level. Managers at each of these levels have different
responsibilities and different functions. Additionally, managers perform
different roles within those managerial functions. Finally, many
organizational hierarchies are changing, due to changes to organizational
structures due to the increasing use of teams, the flattening of
organizations, and outsourcing.


DuBrin, Andrew J.

Essentials of Management.

6th ed. Peterborough, Ontario: Thomson South-Western, 2003.

Jones, Gareth R., and Jennifer M. George.

Contemporary Management.

4th ed. New York, NY: McGraw-Hill Irwin, 2006.

Mintzberg, Henry. “The Manager’s Job: Folklore and

Harvard Business Review,

July-August 1975, 56–62.


The Nature of Managerial Work.

New York: Harper & Row, 1973.

Rue, Leslie W., and Lloyd L. Byars.

Management: Skills and Applications.

10th ed. New York, NY: McGraw-Hill Irwin, 2003.

Williams, Chuck.


Cincinnati, OH: South-Western College Publishing, 2000.

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