The proper corporate management structure is essential to efficient business operations. A company must determine the best structure to its business goals and industry. Also, it should evaluate its current structure and make any necessary adjustments. All changes must be communicated to employees, particularly when the company is undergoing a reorganization. This can cause a sense of cynicism among employees.
The top level of the corporate structure is comprised of the executive officers and the board including the chief executive (CEO). The CEO is in charge of the daily operations of a company and is in charge of the majority of legal business activities. The shareholders are also a part in the corporate structure, even when they aren’t a part of the daily operations. They are accountable for budgets and have the right to vote on major decisions.
Below the board of directors are the staff managers who collaborate with the higher-level executives to enforce policy. Staff managers can be organized into functional departments. This allows each department to function independently and increase efficiency. They may also be grouped into divisional departments which is ideal for companies that have multiple product lines that require quick responses to market changes.
A circular structure is similar to a functional or divisional structure. However instead of the chain of command that runs vertically, this structure functions horizontally across departments. It’s a great strategy to promote collaboration and communication prioritizing digital health in today’s connected workplaces between departments. It can also foster an environment of teamwork and trust among employees.