What is meant by management hierarchy? Explain.

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 HIERARCHY/LEVELS OF MANAGEMENT

There are different levels of management which are determined by the organizational structure. The larger organizations have more complexity resulting in greater levels of management. Likewise, organizations wishing to be the first in the market with the newest and best product prefer lesser levels since it permits them to respond the changes promptly. There are commonly three levels of management. Each of them is discussed below.

1. Top Level Management

Top Level Management This is the highest level in the organizational hierarchy. It includes the board of directors , chief executives, president, and executive directors, ch executive officers, and general manager. They are responsible formulating the authority of the organization. The top level also plays significant role in the mobilization of organizational resources.

The top level management is also known as the brain of the organization is responsible for overall management and operation of an organization. It accountable to the shareholders and the general public.

The top level management of an organization performs the following functions:-

  • Formulate vision, mission, goals, strategies and policies of the organization.
  • Appoint the executive for the middle level, i.e. departmental managers
  • Issue necessary instructions for the preparation of department budgets, procedures, and schedules.
  • Provide guidance and direction to middle and lower level.
  • Control and coordinate the activities of all departments.
  • Maintain relation with the outsiders.
  • Be responsible towards the shareholders and society. 


2. Middle Level Management 

The middle level management creates a link between the top and lower leve a management. It includes departmental and division heads and managers They are responsible for implementing and controlling plans and strategies formulated by the top executives. It is responsible for the top managemen for the functioning of departments or units. The members at this leve devote more time in organizing and directing functions.

The middle level management performs the following functions.
  • Execute the plans of the organization as per the policies and directions of the top management.
  • Work as bridge between top level and lower level management.
  • Make plans for departments/units.
  • Train the lower level management.
  • Communicate the goals and policies to the lower level. • Coordinate the activities within the department or unit.
  • Communicate important information to the top level. • Evaluate performance of lower managers.
  • Inspire the lower level managers for better performance.

3. Lower Level Management
The lower level management is also called operational level management. It consists of supervisors, foreman, section officers, and the superintendent. It directly interacts with the workers.
The lower level management performs the following functions.
  • Assign jobs and tasks to the workers.
  • Guide and instruct workers for day to day activities. Maintain the quality and quantity of output.
  • Maintain good relationships within the organization.
  • Communicate the lower level issues to the top level and organizational goals and policies to the workers.
  • Help to solve the grievances of the workers.
  • Supervise and guide the workers.
  • Train the workers.
  • Arrange necessary resources for getting the things done.
  • Prepare periodical reports about the performance of the workers and submit to the middle level management.
  • Maintain discipline in the organization.
  • Motivate the workers for efficiency.
  • A comparative table showing the characteristics of three different levels of management are given in below for quick reference.

          OR

Hierarchy means a system with unbroken levels or status from the lowest to the highest and vice versa. Management hierarchy is the level of management of the organization which indicates the division of management. Management level is obtained with the division of responsibility and authority.

 Generally, there are three hierarchical levels (top level management, middle level management and lower level management) on the basic organization structure.



1. Top level management

A limited number of top executives like BOD, chairman, vice-chairman, etc. who lead the whole organization form the top level management. Top level management is also known as executive level of management. Members of top level management have the overall responsibility for the survival, growth and the welfare of the organization. The top level management is known wiss common titles like chairman, president, vice-chairman, GM, DGM, ED, CEO, etc.

Top level management is responsible for the following functions:

  • Determining the overall organizational goals. Preparation of overall plans, policies and strategies to achieve the predetermined goals.
  • Establishment of the standards for controlling.
  • Setting the performance appraisal and compensation system.
  • Directing (leading, motivating, supervision, communication) employees for central plans and policies of organization.
  • Assembling resources (human, capital, technology and information) and encouraging
  • employees for wise utilization of such resources. Representing organization in external world. 
  • Interacting between organization and them external environment.


2. Middle level management

The middle level Management lies between the top level and lower level management. This is the department level of the organization which is formed to conduct similar activities from a unit. This is formed with departmental level managers of a certain functional departments like marketing, finance, accounting, production, sales, administrations etc. This level is wider than the top level management. The major function of this management level is to implement the plans and policies formed by top level. Middle level management is responsible for following activities:

Formulation of departmental goals, plans, policies and strategies for each department on the basis of overall goals. Interpretation of plans and policies developed by top level management to department level management.

Functions:-

  • Guiding, instructing and controlling to the departments and lower level. 
  • Assigning duties and responsibilities for first line manager.
  • Communicating plans, policies and guidelines set by top level management to lower level management.
  • Recruiting and selecting the suitable staffs.


3. Lower level management

This is the entry level for managerial position in the organization. This level is also called as operating level management or first line management or supervisory level of management. This level of management is formed by the first line managers or supervisors. Operating level is strongly responsible for day to day activities which ensure short term goal achievement. The common job titles of lower level management are section officer, supervisor, foreman, sales officer, account officer, production officer, etc. This level of management is responsible for the following activities: Arranging the necessary tools, equipments etc. for the workers.

Functions:-

  • Maintaining a good human relations and discipline in the organization. Classifying and assigning the duties to first line employees.
  • Directing for activities and solving the problems of workers.
  • Improving morale of the workers.
  • Arranging and providing training to workers.
  • Reporting success or failure of the operation to the middle level management. Arranging job responsibilities in case of absenteeism.

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