What Is Management? The Definition, Functions and Levels

By Indeed Editorial Team

Updated January 19, 2023

Published November 5, 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.

All organizations rely on management to create a positive and profitable work environment that motivates others. But what is management? Management is an extensive collection of roles and responsibilities that help focus the direction of a company. Learning about the purpose and function of management can help you better understand your position within a company and how to become a better manager.

In this article, we discuss the definition and functions of management, identify the levels of management within an organization, highlight several management styles, and provide tips for becoming a better manager.

What is management?

Management is the leadership and administration of an organization. Part of management is coordinating resources and tasks to help a business run smoothly and progress toward a common goal. Management is a collective of individuals who focus their attention on strategic planning, evaluating performance and adjusting objective milestones to make an organization profitable. In addition, managers coordinate the efforts of the team to reach the company's goals through the use of available resources.

Related: 10 Manager Responsibilities in a Functional Organization

What are the functions of management?

Within all levels and types of management, there are five primary functions, including:

Setting objectives

The first role of management is to set goals and objectives. A manager or the management team takes time to create a strategic business plan and set objectives for the organization. It is then a manager's responsibility to share the vision with the rest of the team to unite them to work toward a common goal. Management also reviews what actions the team requires, what resources they need and the process for evaluating success.

Organizing

The second role of management is to organize people, projects, resources and processes. The responsibility of organizing includes taking the larger objectives and breaking them into smaller tasks and duties that employees can accomplish. A manager also organizes the relationships between departments and teams, helping people to work effectively together. Using delegation and awareness of their team's strengths can help a manager remain organized and directive.

Motivating the team

Another role of management is motivating the team. This includes making sure everyone understands their roles and responsibilities and works toward common goals. Motivating the team also requires an understanding of what inspires each individual to do their best quality work. Developing professional relationships within their department or team is an essential skill for any successful manager.

Devising systems of measurement

The fourth role of management is to create systems of measurement. Measuring success and performance and evaluating progress is essential to management identifying whether the company is moving closer to meeting its goals. Part of devising measurement systems is choosing key performance indicators (KPIs) to monitor the team's performance. For example, a sales manager may identify specific KPIs for their team, such as percentage of sales increase over last year, the number of new customers and the average sale per customer.

Developing people

The last essential role of management is developing their people. The development of people includes training for new staff members, ongoing development of skills and workplace procedures and career planning. Investing in the training and development of a company's employees promotes a positive work environment while encouraging high-quality results.

Levels of management

Depending on the organization's size, there can be various levels of management within the same company. In large businesses and corporations, the structure of an organizational chart comprises a hierarchy of different layers of management. The three primary levels of management include:

Low-level or front-line management

Low-level or front-line management includes positions such as supervisors, forepeople, front-line team leads and department leads. These positions deal directly with the employees they oversee. For example, a front-line manager provides hands-on guidance and often does work similar to those they supervise. A low-level manager or supervisor takes direction from middle management and carries out the actionable items to move the department or company closer to its objectives.

A low-level manager is responsible for the daily work completed by individual team members. They oversee the quality of work done and provide direction and support to their staff. A front-line manager answers questions, provides resources and offers hands-on training. This management level is responsible for the team's career development and planning, performance evaluations and providing consistent feedback to staff. They also act as an intermediary between front-line staff and middle management.

Related: Guide to the Different Types of Managers (With Examples)

Middle management

Middle management positions are at the centre of the organizational chart and often have titles such as department manager, branch manager or regional manager. They take direction from senior management and work to ensure that they communicate the company's goals and objectives to the front-line managers for implementation. For example, a middle manager takes the strategic plan from upper management and creates a plan to execute the directives.

Middle management roles spend most of their time on organizational and directional functions. They focus their time on supporting and guiding front-line management to achieve better productivity and performance. Middle management also creates and defines essential policies and procedures for lower supervisory roles.

Executive or senior management

Executive or senior management is the top tier of a company's organizational chart. They hold positions such as chief operating officer (COO), president or director. Their role is to provide high-level strategic planning and direction for the entire organization. Middle and lower management positions then carry out senior management strategies. Executive management's focus is to ensure the organization is profitable, ethical and managed responsibly.

Much of an executive manager's day takes place in meetings to discuss projections and plans for the company's future. They also spend time reviewing past performance and history to make better decisions. While they oversee the entire operations and profitability of the organization, senior management is accountable to the company's shareholders or ownership.

Related: What Is the Difference Between Director and Manager? A Guide

Styles of management

Researchers who study management and leadership have identified several effective management styles. There is not one specific management style that is better than the others, and each manager has their unique type of leadership. Several factors influence management style, including the manager's personality and character traits, the company culture, and the business industry.

While there are over 10 unique styles of management, below are three common types:

Transactional management style

A transactional leader or manager is someone focused on the performance metrics of their team. While they focus on performance, they also provide mentorship, guidance and direction to help their employees meet and exceed the desired goals. A transactional manager creates defined objectives and milestones and offers incentives for quality performance. Incentives typically include monetary rewards, such as a bonus program and disciplinary action for failure to achieve the required results.

This management style is excellent for departments or teams that focus on profitability and performance, such as a sales department. It is also effective for achieving short-term goals within a clearly defined structure.

Related: 9 Types of Management Styles for Effective Leadership

Democratic management style

A democratic leader or manager takes into account the opinions and ideas of their team before making a decision. They ask for feedback, and because of this, a democratic manager often has high employee engagement and workplace satisfaction. In addition, the team members feel heard and understood when consulted before making a final decision.

This management style is great for creative or innovative teams, as it focuses on discussion and participation. It can take longer to organize large teams to discuss issues and find solutions, but employees typically feel more engaged with this type of collaboration. It's a good option for managers and teams with many extroverted personalities.

Coaching management style

A coaching manager or leader focuses their time on getting to know their team and learning each individual's strengths, weaknesses and motivating factors. Then, they provide clear expectations and help their team create SMART goals to achieve success. The coaching management style is often under-used because it takes time to work individually with each team member, but it is highly effective at bringing out the best qualities in a team.

This management style is great for any team that focuses on growth and development. It promotes the development of new skills and fosters an inclusive and responsive working environment.

Related: How to Write a Management Resume with Examples and Template

Tips for being an effective manager

There are many ways you can develop your management skills, including:

  • Communicate with your team. Communication is essential to understanding the needs of your team, evaluating their strengths and weaknesses and sharing critical information needed to work toward a common goal.

  • Encourage collaboration. When you encourage your team to work together to accomplish objectives, you foster a positive and inclusive working environment.

  • Remain positive. As a manager, you're the leader of your team, and it's essential to remain positive and lead by example.

Related: How to Improve Your Management Skills (With Tips)

By knowing the answer to the question "What is management?" you are now better able to set goals for yourself to work in leadership and help others understand the definition, functions and benefits of effective management.

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