ZnO semiconductor doped with a few per cent of some transition metal ions can exhibit above room temperature ferromagnetism, transforming it into a very promising candidate for future spin-electronic applications. In the present article we have compared the electronic structure of two polycrystalline ZnMnO pellets doped with diluted Mn concentration (2% and 4%), carefully characterized by SQUID and XRD, including Rietveld refinement. The characterization measurements established that the samples have the ZnO lattice with ZnS type Wurtzite hexagonal symmetry and no detectable impurities. The samples exhibit distinctly different magnetic properties. The 2% sample displayed a clear FM ordering at 300 K while the 4% sample did not show any ordering down to 5K. The electronic structure of these two samples has been investigated using Mn L23 x-ray absorption spectroscopy, Zn 2p and 3p, Mn 3p and O 1s x-ray photoemission spectroscopy. Our aim was to find out how the changes in the electronic structure can correlate to the observed magnetic properties in such diluted magnetic semiconductor materials. The results show that most of the Mn ions of the ferromagnetic sample are in the divalent state. For the higher Mn percent nonmagnetic sample, a larger contribution of higher oxidation Mn states are dominant and the oxygen content also increases. The two factors can be correlated to the suppressed ferromagnetism, though it is hard to pinpoint that which of these two weighs more in the suppression mechanism.