What are the four management levels

Management levels

The organizational hierarchy of a company is typically divided into top management, middle management and lower management.

Top management: the top management level of the company, which can consist of one person or several people. Depending on the legal form, a company is managed by the entrepreneur himself, the general partner, managing director or board member. The top management level is primarily concerned with corporate objectives and the development and implementation of corporate strategy.

Middle management: middle management level of the company. Depending on the size of the company, one or more hierarchical levels can be located here. Middle management includes area managers, main department heads, department heads, i.e. people who are responsible for a sub-area of ​​the company such as the human resources department, production, accounting, etc. The middle management level implements the fundamental decisions of top management by making and implementing decisions for the responsible area. For this purpose, they are usually given power of attorney or power of attorney.

Lower management: the lowest management level of the company. The lower management is the superior of employees who are entrusted with executive activities and is directly responsible for the quality and efficiency of the service process. Lower management includes group leaders, office managers, and foremen. The lowest management level implements the decisions of the superiors, with the employees or the lowest management level performing the operational services themselves. Middle and lower management are exposed to double expectations, as they have to meet the objectives set by their superiors on the one hand, and the employees want to enforce their own ideas and demands on the other. One speaks figuratively of a "hammer-anvil situation". In the recent past, an increasing decentralization of tasks and competencies has become established. This is promoted by increasingly higher qualification requirements for employees who are willing and often demand to take responsibility themselves. Team-oriented work, flat hierarchies, the maintenance of open communication and extensive communication-technical support are means of establishing decentralization in day-to-day operations. This tendency leads to the shifting of the coordination tasks to the operationally active employees and thus to the reduction of the middle management level, to "slim down", to lean management. The three management levels can be described in more detail by different focus areas, which lie in the spectrum between strategic decisions and execution.

Strategic decisions: decisions about issues that determine the structural and long-term development of the company. This includes fundamental questions, e.g. mergers, change of legal form, outsourcing of business areas, reorganization, formation of corporate guidelines, the coordination of the large operational sub-areas, the decision on significant individual projects such as large orders or large projects, the filling of management positions. This is where the most important areas of activity for the top management level are located.

Dispositive decisions: The strategies are formulated more precisely and implemented through a wide variety of activities, e.g. in projects, or taken into account by changing the behavior of those responsible. Independent of changes, the middle management level is required to make individual decisions in day-to-day business. Depending on the area of ​​responsibility, various decisions have to be made, e.g. in the production area about adherence to deadlines, quality assurance; in controlling via software use, reporting systems; in the financial sector via liquidity, debt financing, etc.

Moderation: Increasing specialization and the rapid innovation cycles mean that managers have to be increasingly supported by the knowledge of various people in the company. Using rigidly predefined reporting channels and hierarchical arrangements, it is only possible to a limited extent to convey the knowledge required for efficient decision-making and task processing. What is needed is cooperation, teamwork, communication and moderation across all management levels.
Target agreements and task agreements take the place of instructions in employee management. Arrangement: Even today, in operational practice, detailed instructions about what, who and when to perform the task are required for many operational tasks. Often these are routine decisions or the direct implementation of requirements from superiors. This is where the primary field of activity of lower management lies.

Execution: The planned activities for the fulfillment of tasks are realized according to the requirements. In addition to the employees, the lower management level is usually also involved in executive activities.

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