The right corporate management structure will help you manage your business effectively. A company must determine which structure is most suitable to its goals and industry. It should also examine its current structure and make any needed adjustments. Any changes should be carefully communicated to employees, in particular in the case of a company going through a restructuring. It can lead to cynicism within the employees.

The top tier of a corporation is made up of the executive officers and the board, including the chief executive (CEO). The CEO is the person who oversees business operations and has control over almost all lawful business activities. Shareholders also play an important role in the corporate structure, though they are not involved in the day-to-day business. They are responsible for budgets, and have the ability to vote on major decisions.

Staff managers are below the directors’ board. They work with executives at higher levels to establish policies. Staff managers can be grouped into functional departments, which permits each department to function independently and optimizes efficiency for a specific business function. They could also be put into divisional departments which is a great option for businesses with multiple product lines and requires fast response times to market shifts.

A circular structure is similar in concept to a divisional or functional structure. However instead of the chain of command that runs vertically, this structure operates horizontally across departments. It is a great method to encourage collaboration and communication among departments. It can also create more trust among employees and help to create the idea of a team-oriented culture.

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