A corporate management structure defines who is responsible for different areas of a company, which allows the company to take advantage of economies of scale and coordinate their activities. For instance the clothing manufacturer may have departments for men’s wear, women’s wear and children’s wear, but a single marketing department. This divisional structure allows departments to focus on their specialized product and market, while also sharing information to ensure better coordination. This kind of structure could lead to higher employee costs as well as more duplication for purchasing supplies for different divisions.
Corporations are legal entities that have stockholders and require an appropriate management structure in order to conform to laws and protect the interests of stockholders. Most companies have a multi-level system of officers, directors and shareholders, who oversee the business’s operations.
The top of the pyramid is the chief executive officer (CEO) who is accountable for approving on contracts and other legally binding decisions for the company. A small business’s CEO may be the founder and sole director, officer, or shareholder, or in larger companies they are appointed by the board of directors.
The board of directors is made up of the prioritizing digital health in today’s connected workplaces elected representatives of the stockholders who oversee the overall direction and policy of the company. They choose the CEO, monitor his performance and plan succession. They also approve major business transactions and activities like contracts, asset purchases and sales and policies, as well as any new ones.