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Corporate Management Structure
The right corporate management structure will allow you to run your business more efficiently. A business must decide which structure is most suitable to its goals and the industry. It is also necessary to evaluate the structure it has in place and make any necessary changes. Changes should be communicated to the employees, especially when the company is undergoing a reorganization. This could lead to cynicism within the employees.
The top-tier of a company is comprised of the executive officers and the board, including the chief executive (CEO). The CEO is responsible for the day-to-day business operations and has authority over most legal business activities. Shareholders also play a role in the corporate structure, even though they are not directly involved in the day-to-day business. They are responsible for budgets, and they can also vote on major decisions.
Below the board of directors are the staff managers who collaborate with the higher-level executives to implement policy. Staff managers are organized into functional departments. This allows each department to operate independently and maximizes efficiency. They may also be grouped into divisional departments which is a great option for companies with a variety of product lines, and requires quick responses to market shifts.
A circular structure is similar to a functional and divisional structure, but instead of having the chain of command run vertically, it is run horizontally between departments. It is a good way to improve collaboration and communication between departments. It can also help to build a culture of teamwork and trust among employees.
