What are the three levels of management and the type of decision made by each level?

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What’s it: Management level is a hierarchy within an organization according to status or authority, from highest to lowest. The three typical levels are top-level management, middle-level management, and lower-level management. Higher levels have higher authority, and so do their responsibilities to the organization.

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These levels determine how roles and tasks are distributed among the various managerial positions, including to whom they are responsible and report and who they lead. In addition, each also focuses on different aspects of the organizational area. For example, top-level managers are responsible for and make decisions for the entire company. Meanwhile, middle-level managers focus on functional areas. And lower-level managers focus on routine work and supervising employees.

Why is the management level important?

Management is about coordinating and administering the tasks required to achieve organizational goals. Companies need it for steady and smooth operations.

Complex operations make companies have to manage the roles and responsibilities of each person. They determine who has the authority to direct the organization, manage the functional areas, and oversee each function’s employees’ day-to-day activities. So, by dividing management into several levels, the company is more organized. It also leads to specialization, where each level focuses on a specific role or task.

With an organized organization, it is easier for companies to grow. In addition, they can hire more employees because many managers are available to supervise and direct different tasks.

Another reason why management levels are important is clear authority. Authority is distributed to each level, which has different powers. And dividing authority within the organization reduces confusion, for example, in decision making.

What are the 3 levels of management?

The three main levels of management are:

1. Top-level management
2. Middle-level management
3. Lower-level management

Let’s discuss the roles and responsibilities, examples, and skills required.

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Top-level management

Top-level management consists of several people – collectively, we refer to the board of directors. Their positions may include:

• President director
• Operations director
• Finance director
• Marketing director
• Human resources director

In some companies, you will find their title as C-Suite, consisting of positions such as Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief Marketing Officer (CMO).

The president director holds the highest rank and supervises the other directors. Meanwhile, the other directors represent the highest positions in functional areas.

Top-level managers are responsible for the entire organization. They have the highest responsibility, authority, and control in the company. And they deal with strategic aspects such as developing a vision and mission, setting a business plan, developing company policies, and stakeholder management. And, their jobs often involve high stress and greatly affect the company’s survival.

Top-level managers are accountable to shareholders, who appoint them during the annual general meeting. Shareholders appoint directors to manage the company’s operations and expect to work in their best interests.

The key skills for positions in top management are:

• Leadership to encourage people to move in the same direction, namely the company’s goals.
• Communication, or broadly interpersonal relationships, either with people inside or outside the organization.
• Change management to deal with organizational transitions or transformations in dealing with opportunities and threats in the business environment.
• Strategic thinking to see the big picture and plan for the organization’s future.
• Effective decision-making because top-level managers hold the highest authority.
• Emotional intelligence to create people’s internal drive to move towards goals and support what top-level managers have planned.
• Delegation for some work or less strategic decision-making to subordinates.

Middle-level management

Department managers, branch managers, and division managers are examples of positions in middle management. They are accountable to top-level managers for their work area. But, at the same time, they are also responsible for leading people in their functional areas.

Middle-level managers play a strategic role because they liaison between top-level and lower-level managers. They determine how the company’s strategic plans are implemented at lower levels. For this reason, their suggestions and feedback are valuable for top managers to improve organizational performance.

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The following are some of the roles and responsibilities of middle-level management:

• Implement the plans and strategies developed by top management and translate them into their work area.
• Develop tactical plans in specific areas of the company for lower-level managers to carry out.
• Provide guidance to lower-level managers to execute plans and improve performance.
• Determine and monitor departmental performance indicators.
• Reporting departmental performance statistics and achievements towards the set targets.
• Diagnose and resolve problems within the department.
• Recommend strategic changes in functional areas – if needed – to top-level managers.

Furthermore, some skills in middle-level management are:

• Interpersonal skills to build good relationships between the top and lower-level managers.
• Communication because middle-level managers bridge information between top-level and lower-level managers.
• Motivating because middle-level managers have to lead several subordinates.
• Leadership to encourage people to move together, synergize and achieve targets.
• Recruitment to get a solid team in functional areas with adequate competence.
• Delegation to transfer some non-essential functional decisions to lower managers.
• Decision-making related to the managed functional area.
• Functional skills to work effectively; for example, financial managers must understand and be skilled in analyzing financial data.

Lower-level management

Lower-level managers are at the bottom of the chain of command. They keep an eye on employees and their routines. But, on the other hand, they are responsible and report to middle-level managers.

Lower-level managers interpret instructions from middle-level managers into a series of tasks to be performed by employees. And they direct the team, oversee the day-to-day activities, maintain the quality of the output and ensure employees complete work to standards and achieve targets.

Supervisors are examples of lower-level managers. Foremen and section heads are other examples.

Why are lower-level managers important to the organization? That’s because they interact daily with employees. They supervise how employees carry out the work according to what has been determined. And they assist employees in performing their duties successfully. In addition, they also play an important role in creating a supportive work environment.

Then, lower-level managers are also the first to catch various problems at the employee level. For example, they listen to employee problems and help solve them or discuss them with middle management to find solutions. For this reason, their presence is vital for smooth operations.

Below are some of the roles and responsibilities of lower level managers:

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• Translate what middle managers want employees to do.
• Assign tasks to employees.
• Supervise and direct employee routines.
• Reviewing employee performance.
• Maintain and maintain quality standards.
• Provides career planning.
• Provide resources for daily routine activities, such as facilities, training, or work tools.
• Assist middle-level managers in recruiting and selecting prospective workers as needed.
• Listen to suggestions and motivate employees.
• Make recommendations and suggestions to middle-level managers.

Meanwhile, technical skills and knowledge in functional areas are indispensable for a lower-level manager. That’s because they have to deal directly with daily work. So, they must understand what the supervised employees are doing, enabling them to provide appropriate feedback or suggestions.

Other skills required are interpersonal and communication skills. That’s because they interact directly with employees. And they have to make sure employees stay motivated and excited. Finally, interpersonal skills are vital for creating a supportive work environment.

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