The proper corporate management structure will allow you to manage your business effectively. A company must determine the structure that is most appropriate to its goals and industry. It must also assess its current structure and make any necessary adjustments. Any changes should be cautiously communicated to employees, in particular in the case of a company going through a reorganization. Otherwise, it could result in a feeling of cynicism from employees.
The top level of a company consists of the board of directors as well as the executive officers, which includes the chief executive officer (CEO). The CEO is responsible for the day-to-day business operations and has control over the majority of legal business activities. The shareholders are also a part in the corporate structure even while they’re not involved in the day-today operations. They are responsible for budgets and vote on major decisions.
Below the board of directors are staff managers, who work with higher-level executives to enforce policy. Staff managers can be organized into functional departments, which permits departments to operate on their own and maximize efficiency for a specific business function. They may also be grouped into divisional departments which is ideal for companies that have multiple product lines, and requires quick responses to market shifts.
A circular structure is similar in concept to a functional or divisional structure. However instead of a chain of command running vertically, this structure functions horizontally across departments. It’s a great way to promote collaboration and communication among departments. It can also help build trust among employees and foster a team-oriented culture.