Having the right corporate management structure is critical to running a successful business. A company should consider which type of structure best matches its objectives and the industry. Also, it should evaluate the structure it has in place and make any necessary adjustments. Any changes should be cautiously communicated to employees, especially in the case of a company going through a restructuring. It could cause a sense of discontent within the employees.
The top-tier of a corporation is made up of the board and executive officers including the chief executive (CEO). The CEO is in charge of the day-to-day business operations and is in charge of the majority of legal business activities. Shareholders play a significant role in the corporate structure, though they are not directly involved in day-to-day business. They are accountable for budgets and have the right to vote on major decisions.
Staff managers are subordinate to the board of directors. They collaborate with executives at higher levels to implement policies. Staff managers are grouped into functional departments, which allows each department to operate independently and maximize efficiency for a particular business function. They may also be put together in divisional departments. This is a good option for companies that have multiple products and need to react quickly to market changes.
A circular structure is similar in concept to a divisional or functional structure. However instead of a chain of command that runs vertically, this structure is run horizontally across departments. It is a good way to promote collaboration and communication between departments. It can also increase trust among employees and foster an what are the benefits of using a virtual data room atmosphere of teamwork.