Corporate Management Structure

A corporate management structure determines the person responsible for each department of a company, which allows the company to reap the benefits of economies of scale and coordinate its activities. For example an apparel manufacturer might have separate departments for men’s wear women’s wear, children’s wear and men’s wear, but only one central marketing department. This divisional structure enables the different departments to focus on their particular market and product remote work efficiency powered by online data storage while sharing information to facilitate better coordination. This type of structure can result in higher employee costs and more duplication, such when purchasing equipment for different divisions.

Corporations are legal entities that have stockholders and require a specific management structure in order to conform to laws and protect the interests of stockholders. Because of this, the majority of corporations have a multi-tiered management system of directors officers, shareholders and directors who oversee the company’s operations.

The top of the pyramid is the chief executive officer (CEO) who is responsible for signing off on contracts and other legally binding decisions on behalf of the company. The CEO of a small company could be the sole founder and chief director, officer or shareholder in larger companies be appointed by the board of directors.

The board of directors is comprised of elected representatives from the stockholders, who are responsible for the direction and policies of a corporation. They select and supervise the performance of the CEO as well as oversee succession planning. They also approve major business transactions and activities, such as contracting, asset purchases, sales as well as new policies, etc.