The right corporate management structure is critical to running a successful business. A company should consider the best structure that suits its needs and the industry. Also, it should evaluate its current structure and make any necessary adjustments. Changes should be communicated to the employees, especially when the company is going through an organizational change. If not, it could result in employee cynicism.
The top level of a corporation consists of the board of directors and the executive officers, including the chief executive officer (CEO). The CEO is in charge of the day-to-day business operations and has control over almost all lawful business activities. The shareholders also play an important part in the corporate structure even though they aren’t involved in the daily operations. They are responsible for budgets and vote on major decisions.
Staff managers are under the board of directors. They work with executives at higher levels to establish policies. Staff managers can be organized into functional departments, which permits each department to function independently and maximizes efficiency for a particular business function. They can also be divided into divisional departments which is ideal for companies with diverse product lines and requires fast responses to market shifts.
A circular structure is similar in concept to a functional or divisional structure. However instead of the chain of command that runs vertically, this structure operates horizontally across departments. It is a great way to encourage communication remote work efficiency powered by online data storage and collaboration within departments. It also helps to build trust among employees and create an environment that is team-oriented.
