We have different levels of management for two main reasons: efficiency and expertise. Efficiency deals with how an organization operates at maximum capacity and minimizes stoppages. Expertise deals with ensuring people with the best qualifications oversee their respective departments.
The Chief Executive Officer (CEO) cannot be expected to handle every management responsibility for an organization. There are simply too many tasks (such as shift scheduling, performance evaluations, immediate problem solving, and project delegation) to be handled by one person in a large organization. In addition to the tasks mentioned, the company must also focus on upcoming trends, mission statements, vision and long-term goals. The latter category is an area a CEO typically handles, while the former is left to lower-level managers. It is not efficient to have one person handle all of the administrative and leadership tasks. It would take up too much time and slow the flow of business. Thus, different levels of management ensure the organization runs efficiently.
Mid-level and low-level managers are usually tasked with the administrative leadership responsibilities. These responsibilities include ensuring the mission of the organization is met by meeting the goals of the department. As management levels increase the emphasis moves toward vision and long-range goals that are more abstract.
The second major concern is expertise. A CEO may understand the business component of an organization to include market forecasts, stock options and business ethics but will probably not be the best welder or fabricator. Lower management can be delegated to oversee areas where particular expertise is required such as legal, human resources or public affairs. This ensures people are given the proper equipment, time and evaluation by managers. A CEO may assume a welder can produce a certain number of components per day, but that number may be much greater or lower and an expert in fabrication will be better suited to handle the matter. Therefore, management levels provide the necessary expertise to benefit the organization.