How is management that is external to the Scrum Team involved in the Daily Scrum?

 Management that is external to the Scrum Team is not involved in the Daily Scrum because:

The Daily Scrum is an event for the Developers to inspect their progress towards the Sprint Goal and adapt their Sprint Backlog accordingly. It is not a status meeting or a reporting session for managers or other stakeholders.

The presence of external managers may hinder the self-organization, collaboration, and transparency of the Developers. It may also create pressure, interference, or distraction for the team.

The Scrum Master is responsible for ensuring that the Daily Scrum is held and that only the Developers participate. The Product Owner and other stakeholders may attend as observers, but only if the Developers find it useful.

References:

Scrum Guide 2020, page 12: “The purpose of the Daily Scrum is to inspect progress toward the Sprint Goal and adapt the Sprint Backlog as necessary, adjusting the upcoming planned work.”

Scrum Guide 2020, page 13: “The Developers can select whatever structure and techniques they want, as long as their Daily Scrum focuses on progress toward the Sprint Goal and produces an actionable plan for the next day of work. This creates focus and improves self-management.”

Scrum Guide 2020, page 13: “The Daily Scrum is an internal meeting for the Developers. If others are present, the Scrum Master ensures that they do not disrupt the meeting.”