Corporate Management Structure

A corporate management structure identifies the person responsible for each department of a company, allowing the company to reap the benefits of economies of scale and to coordinate its activities. A clothing manufacturer, for instance may have separate departments for women’s, men’s and children’s clothing, but a central marketing department. This divisional structure allows each department to focus on a specific product or market, and also share information in order to improve coordination. This kind of structure could result in higher expenses for employees and more duplicate work for purchasing supplies for different divisions.

Corporate entities are legal entities and have stockholders. They require a certain management structure to be in compliance with rules and protect shareholders’ interests. Most corporations have a multilevel system of officers, directors, and shareholders, who oversee the company’s activities.

The top of the pyramid is the chief executive officer (CEO) who is responsible for signing off on contracts and other legally binding decisions for the company. A small corporation’s CEO might be the sole founder and chief director, officer, and shareholder or in larger firms they are appointed by the board of directors.

The https://chartinglogin.com/real-estate-and-data-rooms-how-digitalization-is-evolving-the-market/ board of directors is comprised of the elected representatives of the stockholders who control the overall direction and policy of the company. They choose the CEO, supervise his performance, and plan succession. They also approve important business transactions and activities, such as contracting, asset purchase and sales and new policies, among others.

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