Corporate Management Structure
A corporate management structure identifies who is responsible for the various areas of the business, which allows the business to benefit from economies of scale and coordinate activities. A clothing manufacturer, for instance has separate departments for women’s, men’s and children’s clothes however, it has a central marketing department. This divisional structure allows different departments to focus on their specialized product and market, while sharing information for better coordination. This kind of structure could result in higher expenses for employees and more duplication in purchasing items for different divisions.
Corporations are legal entities that have stockholders and require a specific management structure in order to conform to regulations and safeguard the rights of stockholders. Most companies have a multi-level system of officers, directors, and shareholders who oversee the business’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 corporation could be the https://chartinglogin.com/what-are-the-benefits-of-using-a-digital-solution-for-startups-like-a-virtual-data-room/ sole director or shareholder, as well as an officer, or the founder. In larger companies the CEO is appointed by the board of directors.
The board of directors is comprised of the elected representatives of stockholders who oversee the overall direction and policies of the company. They decide and oversee the performance of the CEO, and also manage succession planning. They also approve important business transactions and activities such as contracting, asset purchases, sales as well as new policies, etc.
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