What will you do in a situation where your manager interfere a lot in your duties and thus end up affecting your performance?

I would insist on a "clear the air" discussion with him whereby mine and his terms of reference are outlined and agreed upon. I would suggest that he should let me get on with my job and if he wasn't happy with the way I was doing it and saw fit to keep interfering, then he should take disciplinary action against me and we could then look for arbitration from his immediate senior!! 

In a polite way I'm telling him that his intervention would affect the whole work in the corporation and trying to convince him stopping this behavior because it affects my job performance .