Corporate Management Structure
Corporate Management Structure

A corporate management structure determines the person responsible for each department of a company, which allows the company to benefit from economies of scale and to coordinate its activities. For instance an apparel manufacturer might have separate departments for men's clothing women's wear, children's wear and men's wear, but a central marketing department. This divisional structure enables the different departments to focus on their specific product and market while sharing information for better coordination. This type of structure, however, can lead to higher visualizing acquisition processes employee costs and more duplication of efforts such as when purchasing supplies for multiple divisions.

Corporations are legal entities with shareholders. They require a certain structure for management to conform to regulations and protect shareholders' interests. To this end, many corporations have a multi-tiered management system of directors, shareholders and officers that oversee the company's operations.

The top of the pyramid is the chief executive officer (CEO) who is responsible for approving on contracts and other legally binding actions for the company. The CEO of a small company might be the sole director or shareholder as well as the chief officer, or the founder. In larger corporations the CEO is selected by the board of directors.

The board of directors is made up of the elected representatives of the stockholders who oversee the overall direction and policy of the business. They choose the CEO, oversee his performance and plan succession. They also approve major business transactions and operations, like contracts, asset purchases and sale new policies, and others.

Leave a Reply

Your email address will not be published. Required fields are marked *