A corporate management structure defines who is responsible for various areas of a business which allows the company to profit from economies of scale and coordinate its activities. For example the clothing manufacturer may have separate departments for men’s wear women’s wear, children’s wear and men’s wear but one central marketing department. This divisional structure allows the departments to focus on their particular product and market while sharing information for better coordination. This type of structure can lead to higher employee costs and more duplicate work for https://chartinglogin.com/acquisition-process-flow-chart/ purchasing supplies for different divisions.
Corporations are legal entities that have shareholders. They require a specific structure for management to conform to regulations and to protect the stockholders’ interests. The majority of corporations have a multi-level system of officers, directors, and shareholders, who oversee the operation of the company.
The top of the pyramid is the chief executive officer (CEO) who is responsible for approving on contracts and other legally binding decisions on behalf of the corporation. A small company’s CEO could be the founder and sole director, officer, and shareholder, in larger companies, be appointed by the board of directors.
The board of directors is comprised of elected representatives from the stockholders who are accountable for the direction and policies of a corporation. They select the CEO, oversee his performance and plan for succession. They also approve major business transactions and activities, such as contracting, asset purchases and sales as well as new policies, etc.