Having the right corporate management structure is essential to running a successful business. A business must decide the structure that is most appropriate to its goals and the industry. It also needs to assess the structure it has in place and make any necessary adjustments. Any changes must be made known to employees, particularly when the company is going through changes in its structure. Otherwise, it could lead to employee cynicism.

The top level of a company is comprised of the board of directors and the executive officers, including the chief executive officer (CEO). The CEO is accountable for the daily business operations and has control over the majority https://chartinglogin.com/acquisition-process-flow-chart/ of legal business activities. Shareholders are also a part in the corporate structure, though they are not involved in the day-to-day business. They are responsible for budgets, and they can also vote on major decisions.

Below the board of directors are staff managers, who work with higher-level executives to implement policy. Staff managers are organized into functional departments. This allows each department to function independently and increase efficiency. They can also be organized in divisional departments. This is a good option for companies with multiple product lines and must adapt quickly to market trends.

A circular structure is similar to the functional and divisional structures however, instead of having the chain of command running vertically, it is run horizontally between departments. It’s a great way to promote collaboration and communication between departments. It can also create the spirit of teamwork and trust among employees.