BLOG # 7: VARIOUS LEVELS OF MANAGEMENT AND STRATEGIES

BLOG # 7: LEVELS OF MANAGEMENT & THEIR ROLES

PART 1: WHAT ARE VARIOUS LEVELS OF MANAGEMENT?

The term levels of management refers to classification and demarcation between various managerial positions in an organisation. It determines a chain of command, the authority and status enjoyed by a managerial position. The number of levels in management depends on the size of the business and geographical spread of the management. The levels of management can be classified into three broad categories. They are

1. Top Level / Corporate Level / Strategic Level
2.  Middle level / Divisional Level / Business Level
3. Lower level / Functional level / Operating Level

Consider the following example of ITC Ltd. ITC Ltd as a whole is an organisation. It is a corporate. It has many business segments or divisions. They are

• 1)      Agri Business
• 2)      Fast Moving Consumer Goods (FMCG)
• 3)      Tobacco
• 4)      Hotels
• 5)      Paper and Packing.

This is called the business portfolio of ITC Ltd (in other terms known as operating segments). Now consider Tobacco Business of ITC Ltd. It will have various departments under it. For Example;

• 1)      Production Department
• 2)      Purchases Department
• 3)      Logistics (distribution) Management
• 4)      Accounts and Finance Department
• 5)      Marketing and Sales Department
• 6)      Human Resources Department and so on.

If you observe the above example, the Board of Directors of the company who have the authority spanning to the whole organisation which covers all the business segments are Top Level Management.

Each division / operating segment has its own Senior Executive Officers. Some times CEO of the business. He is the head of a business line. These officers act as a link between the corporate level and the functional level.

Each division of business is again classified based on functions. These are called departments. Each department has a manager responsible for it. They are functional or operation level managers.

The primary purpose of strategy is competing and winning over competition, it is to be understood that products and businesses compete but not corporations. For example: Who is the competitor of ITC Ltd is an absurd question. Company will not have competitors unless it is a single business single location single product company. Each and every business / product of ITC has a separately identifiable competition. (ITC Yippee Vs Maggi Noodles for example). The role of the corporation then is to manage its business units and products so that each unit / product is competitive and contributes to achieving corporate level goals.

PART 2: FORMULATION OF STRATEGY
There is a misconception that strategies are formulated at top level and implemented in middle and lower level. This is absolutely incorrect. STRATEGIES ARE FORMULATED AT ALL THE THREE LEVELS.
Table showing various levels of management and respective strategies formulated

Sl No	Level of Management	Strategy formulated are known as	Strategy deals with
1	Top Level Management	Corporate Level Strategies	Portfolio Management of various businesses to achieve organisational goals
2	Middle Level Management	Business Level Strategies	Developing and sustaining competitive advantages, competing with rivals and winning over
3	Lower Level Management	Functional Level Strategies	Business Processes, Value Chain and Optimum utilization of resources

So friends, these are the levels of management and levels in strategy formulation. We will discuss about corporate, business and functional strategies in the coming blogs.

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