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Organizational Levels: Differences and Functions
Jun 5, 2023 10:38:00 AM3 min read

Organizational Levels: Differences and Functions

Organizational levels represent the three management levels commonly used in most businesses: lower-level management, middle-level management, and upper-level management. They are classified based on hierarchy and authority, and they can perform various tasks aimed at achieving a specific purpose. Within a functionally managed organization with a vertical tendency, this division into hierarchical levels allows for the differentiation of different levels of scope.

The objective of the upper hierarchical level is to consider the medium and long-term strategy of the company. The middle level selects a more specific aspect of this comprehensive strategy and ensures a more specific implementation of the overall goal. The lower level primarily focuses on the execution of all projects and processes, so these area-specific objectives involving processes and projects are oriented towards the short term.

This pyramid alignment allows each organizational level to segment and distribute activities in such a way that the work is easily manageable by each area and in humanly achievable quantities within a specified timeframe.

The three organizational levels are divided into strategic, tactical, and operational. We will now describe each one.

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Top-level or strategic

Executives at the strategic level make decisions that impact the entire company but are not involved in its day-to-day activities. They define strategic objectives and guide the organization towards achieving them. This managerial level is responsible for organizational performance and making important decisions for business growth.

This level aligns with the overall market outlook and develops strategies for effective adaptation to change. The Chief Executive Officer (CEO) is responsible for setting the guidelines that govern the entire organization. These guidelines are based on the current situation of the company, future prospects, interrelationships, market competition, and more.

The strategic level carries the most weight in organizational decisions. Good decisions benefit other areas, while poor decisions have a ripple effect. Due to its importance, strategic planning typically spans a long-term horizon, approximately 3 to 5 years.

Key Functions SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) Development of strategic plans Evaluation of the success or failure of strategic plans and making necessary adjustments when results do not meet expectations Perceiving the organization as a whole and deriving strategic plans for other areas and levels High-performance decision-making and risk-taking to drive the company towards achieving the overall objective Long-term development of new methodologies and technological tools Management of organizational change and driving innovation for competitive advantages in the market

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Middle or tactical level

This level is accountable to top management and the strategic level. It oversees the operational level and supervises processes and projects executed by subordinates at this lower level. Tactical managers execute organizational plans in line with company policies and strategic objectives set by top management. They act as intermediaries between senior management and the operational level.

In cases where the operational level has subordinates, tactical level managers can collaborate on guidelines for topics such as process design/redesign or progress on projects involving multiple processes. Additionally, they provide guidance and crucial information to these subordinates to enhance performance and overall results at the operational level.

Functions Execution of operational plans based on company organizational goals Contribute to effective mediation between the strategic level and the operational level to align execution with objectives Inspire and guide operational-level managers to improve performance and goal achievement through more efficient processes Provide relevant information to senior management, enabling the company to optimize productivity across all areas with a broader strategic focus Define and monitor collective performance indicators Design and establish information systems and collaborative work practices Identify and resolve problems within and outside work groups Conduct performance statistics and reports

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Lower or operational level

The operational level balances work experience with interpersonal skills to enhance specific operational processes. Individuals at this level play a key role in achieving more efficient and dynamic processes through continuous initiative.

Operational-level managers must effectively lead and control specific collaborators. They need strong interpersonal skills to manage people and assist them in achieving daily objectives.

Functions Communicate decisions and strategies to collaborators Pay attention and actively listen Prioritize tasks Align resources for efficient process execution Maintain open-mindedness to accept new ideas and criticisms Organize processes, activities, and tasks

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The three levels of organizational management in a company are: the strategic level, which defines long-term overall objectives; the tactical level, which designs plans to achieve these objectives while considering the broader goals, and the operational level, which executes the processes and projects that contribute to daily progress in meeting organizational goals, taking into account the overall objectives and strategic plans.

CTA Business Process Framework BPF

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