LESSON TWO: Management Levels in Organizations

Overview
After completing this chapter, you will be able to:

• Distinguish the various levels/types of managers in an organization and the different types
of information.
2.1 Types/Levels of Managers
Henri Feyol and other early writers first described the functions of managers as planning,
organizing, staffing, and supervising and control business activities.
Planning- This is what you do to get your organization from your present position to an even
better position. Planning is setting objectives, both long term and short term, and developing
strategies for achieving them. Planning lays the ground work for the other four tasks.
Organizing- To achieve your goals you must, you must organize the parts in a coordinated and
integrated effort. Organizing is making orderly arrangement of resources.
Staffing- staffing has to do with people. Staffing is selecting, training and developing people. In
some cases it is done by specialists, such as those in the human resource department.
Supervising- Supervising is directing, guiding and motivating employees to work toward
achieving the organization’s goals.
Controlling- controlling and monitoring the organization‘s progress and adapting methods
towards achieving its goals.
All managers perform all the tasks as part as their jobs. However, the level of responsibility
regarding these tasks varies with the level of the manager.

Managers in organizations can be classified in two main ways, based either on their level in the
company or on the tasks for which they are responsible. In most organizations, it is possible to
define loosely 3 levels of managers. Each level has different roles and responsibilities.

I. Top level managers/strategic manager

The CEO (chief executive officer) or president is the very top manager. Top managers are
concerned with long-range planning. Their job is to make strategic decisions .Strategic decisions
are complex decisions rarely based on predetermined routine procedures, involving the subjective
judgment of the decision maker. Strategic means that of the five management tasks (planning,
organizing, staffing, supervising, controlling), top managers are principally concerned with
planning. Examples of strategic decisions include:
• What new markets should be tackled
• How growth should be financed
• Whether to open new branches
• How to react to competitors
• The company’s 5 year goal etc.
II. Middle level managers/Tactical managers
Middle managers implement the goals of the organization. Their job is to oversee supervisors and
to make tactical decisions. Tactical means that of the five tasks of management, middle managers
are concerned with organizing and staffing. Examples of tactical managers include branch
managers, sales managers, division managers etc. An example of a tactical decision is deciding
how many units of specific product should be kept in inventory, purchase of larger computer
system etc.
III. Lower level managers/operations managers
Lower-level managers or supervisory managers monitor non-management employees. Their job is
to make operational decisions. An operational decision is a predictable decision that can be made
by following a well defined set of routine procedures. These managers focus mainly on supervising
and controlling. They monitor day-to-day events and if necessary take corrective measures.
 Senior
Managers

Middle
Managers

Operational
Managers

planning Finance Accounting Human

Resources

2.2 Types of information

To make the appropriate decisions- strategic, tactical, and operational- the different levels of
managers need the right kind of information: unstructured, semi structured and structured.

Top managers need information that is unstructured. Unstructured information is summarized,

less current, highly subjective; covers a broad range of facts; and is concerned with events outside
as well as inside the organization.
Middle managers require information that is semi structured.
Lower-level managers need information that is structured. Structured information is detailed
more current, not subjective; covers a narrow range of facts; and is concerned principally with
events within the organization.
Case study: food supply business
This illustration shows the information that the three levels of management might deal with in a
food supply business.
• Strategic (unstructured information)
Competitive industry statistics
• Tactical (semi structured Information)
Sales analysis, by customer reorder
Analysis, sales analysis, product forecast
• Operational (structured information)
Bill of materials manufacturing specifications, product specifications, order processing etc.