Corporate Management Structure

A corporate management structure is a way to identify who is responsible for each aspect of the company, allowing the company to reap the benefits of economies of scale and to coordinate acquisition process flow chart its activities. A clothing manufacturer, for instance may have separate departments for women’s, men’s and children’s clothes but a central marketing department. This divisional structure allows each department to focus on its specific product or market, while sharing information in order to improve coordination. This type of structure can result in higher costs for employees as well as more duplication for purchasing equipment for different divisions.

Corporate entities are legal entities that have shareholders. They require a specific management structure to be in compliance with regulations and to protect the shareholders’ interests. The majority of corporations have a multi-level system of officers, directors, and shareholders that oversees the business’s operations.

The CEO is at the top of the pyramid. He is responsible for negotiating contracts and other legally binding actions on behalf of the corporation. The CEO of a small corporation could be the sole director or shareholder as well as the chief officer, or even the founder. In larger companies the CEO is chosen by the board.

The board of directors is comprised of the elected representatives of stockholders who oversee the overall direction and policy of the business. They choose and oversee the performance of the CEO and handle succession planning. They also approve major business transactions and activities such as contracts acquisitions and sales of assets new policies, and others.