Corporate Management Structure

A corporate management structure this post on the chartinglogin.com website is a way to identify who is accountable for each part of a company, allowing the company to benefit from economies of scale and to coordinate its activities. For instance the clothing manufacturer may have departments for men’s wear women’s wear, children’s wear and men’s wear, but a single marketing department. This divisional structure allows each department to concentrate on its specialized product or market, while sharing information to enhance coordination. This type of structure can result in higher employee costs and more duplication, such when purchasing items for different divisions.

Corporations are legal entities that have stockholders. They require a certain structure for management to conform to rules and protect shareholders’ interests. This is why the majority of corporations have a multi-tiered management system of directors officers, shareholders and directors who supervise the company’s activities.

The CEO is at the top of the pyramid. He is accountable for signing contracts and other legally binding acts on behalf of his corporation. A small business’s CEO may be the sole founder, director, officer or shareholder in larger companies, be appointed by the board of directors.

The board of directors consists of elected representatives from stockholders, who are responsible for the direction and policies of a business. They select the CEO, oversee his performance, and plan succession. They also approve important business transactions and activities such as contracting, asset purchase and sales as well as new policies, etc.