A corporate management structure is a way to identify the person responsible for each area of a company, allowing the company to reap the benefits of economies of scale and to coordinate its activities. A clothing manufacturer, for instance might have separate departments for men’s, women’s and children’s clothes however, they have a common marketing department. This divisional structure allows each department to concentrate on its own specific product or market, while sharing information in order to improve coordination. This type of structure can result in higher costs for employees and more duplicate work like when purchasing supplies for different divisions.
Corporations are legal entities that have stockholders. They require a specific management structure to be in compliance with laws and protect the interests of stockholders. The majority of corporations have a multi-level system of directors, officers, and shareholders that oversees the company’s operations.
The top of the pyramid is the chief executive officer (CEO) who is responsible for signing off on contracts and other legally binding decisions best vdrs to test now for the company. The CEO of a small business might be the sole director or shareholder, as well the officer, or even the founder. In larger firms the CEO is chosen by the board of directors.
The board of directors is made up of elected representatives of stockholders who oversee the overall direction and policy of the business. They decide and oversee the performance of the CEO, and also manage succession planning. They also approve major business transactions and activities, such as contracting, asset purchases, sales as well as new policies, etc.