The 3 Management Levels: Definition and Importance

By Indeed Editorial Team

Updated 30 November 2022

Published 7 September 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

The three levels of management consist of top, middle, and lower management professionals. These leaders have varying levels of authority and decision-making power as well as different daily duties. If you want to perform a role in leading a team, you may benefit from understanding the detailed differences between levels of management. In this article, we discuss the exact definitions of the three levels of management, the differences between them, the importance of this structure and tips for how to succeed in each one.

Related: How To Manage People Effectively in 6 Steps (Plus Tips)

What are the three management levels?

The three levels of management are the common hierarchical structure of leadership within an organisation. These levels consist of the different types of managerial positions an organisation may have. While a small company may only need one manager, a larger organisation may need multiple managers to supervise different groups of employees and departments.

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The levels of management typically follow a chain of command from the owner or chief executive officer (CEO) down to operational managers. Lower-level managers report to higher-level managers, and higher-level managers report to the top authority of the organisation. Each manager has a different amount of authority and decision-making power and performs different functions. Here are the three different levels of management:

Top level of management

The top level of management, also called the administrative or managerial level, typically comprises the CEO or managing director and board of directors, which represent a committee of stakeholders in a company. The top level of management is often the person who started, founded and/or owns the company, and they have the most decision-making power and authority out of everyone in an organisation. Those in this position establish overarching goals, policies and procedures and plan and execute initiatives for overall success. They also manage all departments and lower levels, delegating tasks to different managerial professionals.

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Here are the typical duties of top-level management professionals:

  • Decide on strategic goals, plans and overarching policies

  • Develop department-specific budgets, schedules, procedures and other tasks and communicate with lower-level managers about them

  • Appoint or hire executive professionals for middle-level management positions, such as leading a department

  • Delegate control of departments and segments of the organisation to various leaders

  • Communicate with other top-level managers to make important decisions

  • Manage the brand and public relations

  • Correspond with stakeholders and investors, conveying work performance

  • Provide guidance and support to other managers and employees and foster collaboration

Related: Management Skills: Definition and Examples

Middle level of management

The middle level of management, also called the executive level, usually consists of branch and departmental managers. These professionals report to higher management and ensure the functionality of their respective departments. They implement organisational and directional functions and manage lower-level managers. In large organisations, there may be senior and junior managers within the middle level of management.

Here are the typical responsibilities of middle-level management professionals:

  • Guide operations according to plans, strategic goals and directives from top management level

  • Develop plans and initiatives for the segments they supervise

  • Assist in or manage the hiring and training process of lower-level management

  • Mediate communication between the top-level management and lower-level management by interpreting and explaining policies

  • Send reports and data to top management about lower-level management and team performance, budget issues and other aspects of operations

  • Evaluate the performance of junior managers using reviews and metrics

  • Support lower-level managers and inspire them to improve their performance

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Lower level of management

The lower level of management, also called the supervisory or operative level, typically consists of supervisors, section officers, superintendents and other executives. These professionals often work closely with the human resources department to manage and supervise regular, entry-level employees. Their primary responsibility is to coordinate and implement day-to-day workflow activities that ensure the completion of projects and deliverables.

Here are the typical responsibilities of lower-level management professionals:

  • Create specific assignments and projects and delegate tasks to employees based on their talents and abilities

  • Guide, instruct and train employees in daily activities, answering questions they may have

  • Make sure production is of proper quantity and quality

  • Inspire employee collaboration and resolve employee issues and disputes

  • Communicate the suggestions and appeals of employees to higher levels of management and communicate higher level management goals to employees

  • Implement the hiring process, including writing job descriptions, reviewing resumes and conducting interviews

  • Implement disciplinary action and the termination process as needed

  • Ensure employees have the necessary machines, tools and resources to complete tasks, order supplies and maintain the cleanliness and functionality of work areas

  • Prepare reports of employee and team performance and communicate them to higher management levels

  • Ensure employees have a simple idea of the mission and voice

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Key differences between the levels of management

Depending on its size, an organisation may have a large number of managers who have different titles, authority levels, and duties. Here are some key differences between the lower-level, middle-level and top-level of management:

  • Top-level managers, often owners and CEOS, have complete authority over an organisation and supervise and control all aspects of it.

  • Middle-level managers, often department heads, are in charge of executing plans to achieve organisational goals and managing lower-level managers.

  • Lower-level managers work directly with employees to execute specific tasks and deliverables and manage the day-to-day operations.

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Why are the three levels of management important?

It's important for a leader to understand the differences between the three levels of management, so the processes can be as efficient and effective as possible. The three levels of management are helpful in an organisation because it breaks it up into logical segments. By doing this, leaders can ensure they are directing enough effort to every part of their work. For example, they may have the following departments to help organise their tasks:

  • Production

  • Quality assurance

  • Accounting and finance

  • Sales

  • Marketing

  • Research and development

  • Purchasing

  • Human resources

  • Information technology

Categorising and coordinating various departments can help employees and leaders focus on certain tasks and become experts in specialised areas. This way, each individual can do what they do best and a company can produce the most high-quality products possible, provide helpful services and optimise workflow.

For example, while marketing professionals have expertise in connecting with audiences through promotional material, sales professionals are experts in generating leads and convincing people to buy products. While research and development professionals may be experts in conducting studies and experiments, quality assurance professionals specialise in ensuring a product is safe and useful for customers.

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Tips for using the three levels of management

Learning about the levels of management can help you find a position that's right for you. Here are some tips for understanding and using the three levels of management:

  • Consider the size of the organisation: When thinking about the levels of management, it's important that you consider the size of the organisation and its needs. If the organisation is large, it may have many departments with different focus areas, while if it's small, it may have only a few leaders.

  • Create a flowchart: Developing a flowchart of the organisation's structure can help you assess its structure and efficiency and think about which position you are interested in. Consider drafting a flow chart with pen and paper or using digital software to create it with ease.

  • Consider your talents: If you want to rise to higher levels of management, think about your talents and skills. If an employee excels at getting their tasks done on time and working with others, they may be an excellent candidate for a supervisory position.

  • Study top companies and experts in your industry: Studying examples and cases of successful management structures can help you build your leadership skills. Think of popular companies that produce high-quality products and provide excellent customer service, and research their management structure to learn more about it.

  • Brainstorm with a team: While you can probably think of many ideas on your own, it can be extremely beneficial to get the advice of others when deciding on a job. Communicate with mentors and trusted friends to think about which level of management is best for you.

Related: 15 Interview Questions to Ask When Hiring a Manager

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