A proper corporate management structure will help you run your business efficiently. A company must determine what type of structure best matches its objectives and industry. It must also assess its structure and make any necessary adjustments. Any changes must be properly communicated to employees, in particular in the case of a company going through a restructuring. It could cause a sense of discontent among employees.
The top tier of an organization is made up of the executive officers and the board, including the chief executive (CEO). The CEO is responsible for the day-to-day business operations and has authority over virtually all legal business activities. Shareholders also play an important role in the corporate structure, but they are not directly involved in the day-to-day business. They are in charge of budgets and can vote on major decisions.
Below the board of directors are staff managers, who work with higher-level executives to establish policy. Staff managers are organized into functional departments. This allows each department to operate independently and to maximize efficiency. They can also be divided into divisional departments, which is ideal for companies with diverse product lines and requires fast response times to market shifts.
A circular structure is similar to a divisional or functional structure. However instead of a chain of command that runs vertically, this structure functions horizontally across departments. It is a great way to foster collaboration and communication between departments. It can also foster an environment of teamwork and trust among employees.