Corporate Management Structure

Having the right corporate management structure is critical for efficient business operations. A company must determine the best structure that matches its objectives and industry. It should also review its current structure and make any necessary adjustments. Any changes must be carefully made clear to employees, especially when the company is going through a restructuring. Otherwise, it could lead to employee cynicism.

The top level of a company is comprised of the executive officers and board members including the chief executive (CEO). The CEO is in charge of the day-to-day operations of a company and has the authority to oversee all legal business activities. Shareholders are also a part in the corporate structure, but they are not directly involved in the day-today business. They are the ones who oversee budgets, and they can also vote on major decisions.

Staff managers are below the board of directors. They work with executives at higher levels to implement policies. Staff managers are organized into functional departments. This allows each department to function independently and to maximize efficiency. They can also be divided into divisional departments which is a great option for companies with diverse product lines and needs quick responses to market shifts.

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A circular structure is similar to a functional and divisional structure but instead of having the chain of command running vertically, it runs horizontally between departments. It is a great way to encourage collaboration and communication between departments. It can also create the culture of teamwork as well as a profound exploration of effective startup due diligence trust among employees.