Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What encompasses the Anthony hierarchy in management?

1. Financial management

2. Human resource management

3. Strategic, tactical, and operational management

4. Project management methodologies

The correct answer is: Strategic, tactical, and operational management

The Anthony hierarchy, also known as the management pyramid, is a framework that categorizes management activities into three distinct levels: strategic, tactical, and operational management. Strategic management involves long-term planning and decision-making that determines the direction of an organization. This level focuses on the overall vision, mission, and objectives of the organization and typically involves senior management. Tactical management translates the strategic plans into specific actions and short-term objectives. It is concerned with the implementation of strategies and involves middle management that coordinates resources and actions to achieve the strategies set by the higher management. Operational management deals with the day-to-day activities necessary for the organization to function efficiently. It includes managing the operations of the organization and is typically handled by lower management, focusing on routine tasks and processes. This hierarchical structure is vital for effective management as it delineates responsibilities, facilitates delegation, and ensures that every layer of management contributes effectively to the organization's goals. The other options pertain to specific areas of management that may fit within the levels of the hierarchy but do not encompass the entirety of the Anthony hierarchy itself.