Corporate Management Structure
The right corporate management structure will help you manage your business effectively. A business must decide which structure is best suited to its objectives and industry. It should also evaluate its current structure and make any needed adjustments. Any changes must be carefully made clear to employees, especially when the company is going through a restructuring. Otherwise, it can result in employee cynicism.
The top tier in the corporate structure is comprised of the board and executive officers including the chief executive (CEO). The CEO is responsible for the day-to-day business operations and has authority over almost all lawful business activities. Shareholders also play an important role in the corporate structure, even though they are not directly involved in the day-to-day business. They are accountable for budgets and have the power to vote on major decisions.
Under the board of directors are staff managers who work with the top executives to establish policy. Staff managers can be divided into functional departments. This allows each department to operate independently and to maximize efficiency. They can also be placed in divisional departments. This is a great option for companies with a variety of product lines and must adapt quickly to market trends.
A circular structure is similar to the functional and divisional structure however instead of having the chain of command run vertically, it is run horizontally between departments. It is a great way to promote collaboration and communication within departments. It also helps to create the spirit of teamwork and trust among employees.