Introduction
Good management is essential for successful business operations, and organizations can benefit greatly from clearly defined management structures. This paper examines the factors that influence the levels of management in a business, and provides an example of a management level design.
Factors Influencing Levels of Management
Organizations vary greatly in size and complexity, from small, single-person businesses to large, multinational corporations. As a result, the number and level of management employees may differ significantly. According to the Academy of Management Review, organizations typically set their management levels based on several key factors, including the size, goals, and technology of the organization.
Size. The larger and more complex an organization is, the more management levels it is likely to have. Companies with many products, divisions, and departments may require a more detailed hierarchical structure than smaller firms.
Goals. The type of goals set by an organization may also influence the level of management structure required. Companies with few goals, employees, or customers may have a flat structure, while those with many objectives and employees may require more layered structures with several tiers of management.
Technology. Technological advancement has led to the proliferation of flat, non-hierarchical structures in many organizations. Companies that use automated systems, such as computer networks, may have a flatter structure than those that rely more heavily on manual processes.
Example of Management Level Design
The following example demonstrates a typical management level design. At the top of the hierarchy is the Chief Executive Officer (CEO) or company President, who is responsible for setting the overall direction of the company. Below the CEO are three Vice Presidents, one for each of the company’s major divisions. These divisions include operations, finance, and marketing. Under each Vice President are the Managers of each team in the division.
At the next level of the hierarchy, Vice President of Operations may also include Team Leaders, each responsible for an individual area, such as production, distribution, and customer service. Under each Team Leader is a Supervisor who oversees the employees directly responsible for the day-to-day operations of the team.
Conclusion
Management structures are an important part of any organization, and the number and level of management positions should be tailored to the specific needs of the organization. Size, goals, and technology all play a role in determining the optimal structure, and the example provided here serves as a basic guideline.
