Levels of Management

Principle & Practice of Management

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Levels of Management

Management is a manifold activity. It is carried on at different Management Levels of the organizational structure. The stages in the organization where a particular type of function starts are called a Management Levels. Thus, the term “Levels of Management” refers to a line of demarcation between various managerial positions in an organization.
The number of managers depends upon the size of the business and workforce. There is a limit to the number of subordinates a person can supervise. The number of levels of management increases when the size of the business and workforce increases.
Management Levels are increased so as to achieve effective supervision.
In most of the organizations, there are generally three levels of management:
1. Top management.
2. Middle management.
3. Lower management.

Management Levels

Top Management

In any Organization, top management is the ultimate source of authority. It establishes goals and policies for the enterprise and devotes more time on the planning and coordinating functions. It approves the decisions of the middle level management and includes Board of Directors, Managing Director, General Manager, Secretaries, and Treasurers, etc.

Middle Management

It generally consists of heads of functional departments viz., production manager, sales manager, office superintendent, chief cashier, branch managers, etc. They receive orders and instructions from top management and get the things done through lower level management. They are responsible for the top management for the functioning of their departments. They devote more time on the organization and motivation functions of management.

Lower Management

It is the lowest Management Levels and thus has a direct contact with the workers. It includes supervisors, foreman, accounts officers, sales officers, etc. It is directly concerned with the control and performance of the operative employees. Lower level managers guide and direct the workers under the instructions from middle-level managers. They devote more time on the supervision of the workers and are responsible for building high morale among workers.

Administration and Management

Management and administration are generally taken to mean one and the same and are often used interchangeably. But there has been a controversy because of these two terms. There are following three views on the subject of a distinction between administration and management:

Management and Administration are Different

Oliver Sheldon was the first person to make a distinction between management and administration. According to him, “Administration is the function in the industry concerned with the determination of the corporate policy, the co-ordination of finance, production and distribution whereas Management is the function concerned with the execution of policy within the limits set up by the administration.” Thus, the administration is the formulation of policies and is a determinative function while management is an execution of policies and is an executive function. Florance and Read also support this, in their view, “Administration involves the overall setting of major objectives determination of policies, identifying of general purposes laying down broad programs, major objectives etc. while management is the active direction of human efforts with a view to getting this done.”

Management Includes Administration

According to Kimball and Kimball, “Management is a generic term with wide functions including administration, which is a narrow function.” According to Brech, “Management is a social process entailing responsibility for the effective and economical planning and regulation of the operation of an enterprise in fulfillment of a given purpose of the task.” “Administration is that part of management which is concerned with the installation and carrying out of the procedures by which the program is laid down and communicated, and the progress of activities is regulated and checked against plans.” Thus, first and second viewpoints are exactly opposite to one another.

There is no Distinction between Management and Administration

Other authors like Fall, Newman Williams, do not make any distinction between these two terms. This viewpoint is gaining popularity these days. It is very difficult to clearly democratic managerial and administrative functions, as the same set of persons perform both these functions. We do not have two sets of people to discharge administrative and operative management functions. Therefore, there is no difference between the two.