Lesson 1, Topic 1
In Progress

2.1. Levels Of Management

ryanrori December 31, 2020

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All managers in an organisation, from first line, (supervisory or team leader) to top management are expected to perform the four fundamental management functions:

  • Planning: the activities and resources of the department/section
  • Organising: the resources of department/section
  • Leading: human resources
  • Controlling: checking to make sure that the work gets done

Organisation Hierarchy

An organisation is structured to show the various relationships between individuals and the different departments.

The structure of the organisation also shows the channels of reporting and communication as well as the channels of command in the organisation: who makes the decisions and who reports to whom.

Everyone needs to know what they have to do and who they have to report to.  Each person is responsible for a particular function or job.  Each individual is given a position with responsibilities, so that everyone knows who is doing what.

This structure is sometimes called an organisational chart or organogram.  The reason for having structure in a business is to ensure that there is a framework within which the various functions or departments can work effectively. 

The hierarchy of the organisation is also known as the chain of command: instructions are passed from top management to middle management to junior management to workers by following the hierarchy (chain of command) of the organisation.

Top management

This management level is responsible for the organisation as a whole.  

Top management consists of the board of directors, the managing director, and the chief executives.  They will determine the organisation’s mission, goals and strategies.  They will be responsible for:

  • the long term planning of the organisation,
  • designing the broad structure of the organisation and
  • leading and controlling the organisation in the sometimes difficult business environment.

Top management will look at trends in the business world and adjust the organisation’s goals and objectives accordingly.  Top management will not usually become involved in the day-to-day activities of production and sales, etc. 

For example, if the organisation is a bus transport company and commuters are starting to make more use of bus services than travelling by train, it is top management’s job to see this trend and to make arrangements for the organisation to be able to transport more passengers.  They could introduce additional routes, more buses, and so on.

Top management therefore spend

  • Most of their time on strategic planning,
  • A reasonable amount of time on management planning and
  • Little of their time on operations planning.

Middle management

Is responsible for specific departments in the organisation. 

Refer to next previous section, where different departments will be discussed.  Each such a department will be headed by a manager.  These managers have to implement the policies, plans and procedures that are formulated by top management.

Managers at middle management level are responsible for short to medium term planning.  They have to organise their functional areas (departments), they usually lead through department heads and they control the activities of their own departments.

Middle managers also monitor the business environment to see how it will affect their department.

If we use the same example as above, middle management will get the new plans for more routes and buses from top management.  Middle management then has to implement these plans by ensuring that the routes will be cost-effective.  Middle management also has to plan and organise the resources: drivers, buses, ticket offices, people to service the buses, etc.  These plans are then handed to the first line managers.

Middle management is mainly concerned with

  • medium and short term planning: three months to a year, sometimes longer.  This planning is called tactical planning.
  • organising, activating and controlling so that the work in their department gets done the way it should
  • and makes less important decisions following the guidelines set by top management. 

Middle management therefore spends:

  • Most of their time on management planning
  • A reasonable amount of time on operations planning
  • Some time on strategic planning

First line management

Are also called supervisors, foremen or team leaders

They will be responsible for sub-sections within departments. 

In the marketing department, for example, you could find product managers, promotions managers and sales managers. In the operations department you would find foremen.

The managerial functions of first line managers revolve around the daily activities of the various departments.  They are responsible for short-term planning and for implementing the plans of middle management.

Their main concern is to apply rules and procedures so that maximum productivity takes place.  They will provide technical assistance to employees, motivate subordinates and ensure that daily tasks are completed.

First line managers are directly in control of productivity and play a vital role in the relationship between management and employees.

A first line manager must implement the objectives of middle management and see to it that workers who are responsible to them perform satisfactorily. 

First line management is also a link between workers and higher levels of management.  A first line manager focuses on short term goals: the day-to-day operation of his/her section, weekly and monthly planning so that the job gets done the way it should.  This is called operational planning.

Supervisors therefore spend:

  • Most of their time on operations planning
  • Some time on management planning
  • Normally no time on strategic planning, except to pass strategic information on to higher levels of management

Practical application of the four management functions

So, first line managers get their medium and short term plans from middle management.  This would include production targets for the day, the week, the month and so on.  The first line manager then has to plan the activities of his/her section for the day, week and month in such a way that the targets are met.

Once the manager has worked out a short term plan, he has to allocate resources so that the target is met: people to do the work, machinery, equipment and raw materials must be at the right place at the right time so that the job can be done.  This is his organising function.

As soon as the work is in progress, due to the planning and organising of the first line manager, he must control that the work is being done on time.  If there are problems he has to adjust his plan and reorganise the resources so that the work can continue with minimum disruption.  While the work is being done, he must also lead the employees: motivate them to work smoothly together as a team, as this is the only way the work will be done on time.

If we look at the bus transport company:

  • One supervisor will be in charge of the drivers on a specific route, so if there are ten routes, there might be ten supervisors reporting to one middle manager.  Each supervisor has to ensure that he has enough drivers for the routes allocated to him; he must ensure that he has buses; he must ensure that the buses are in good working order, and so on.  If there are problems, he has to sort them out with the minimum delay so that the passengers are not inconvenienced.  His planning will be short term: daily, weekly, monthly.
  • Another supervisor will be in charge of ticket sales and he also has to plan, organise, control and lead.
  • There will be a supervisor in charge of the mechanics, and so on.

Summary

Top management will focus on the strategic matters, such as the equity partners, which tenders to tender for and what strategy to be followed in the tender process.

Middle management will focus on the planning of the service, vehicles required, service specifications, budgets, and so on.

Junior management (supervisors) will focus on the detailed operational planning – the day-to-day operation of the bus or transport service in terms of the parameters provided by middle and top management.