The correct corporate structure will help you manage your business effectively. A company must determine which structure is best suited to its business goals and industry. Also, it should evaluate its existing structure and make any necessary adjustments. All changes must be communicated to employees, particularly when the company is going through a reorganization. This could lead to cynicism among employees.
The top level of a company is comprised of the board of directors as well as the executive officers, including the chief executive officer (CEO). The CEO is the person who oversees business operations and has control over nearly all business activities. Shareholders also play an important role in the corporate structure, even though they are not directly involved in day-today business. They are the ones who oversee budgets, and they can also vote on major decisions.
Under the board of directors are staff managers, who work with higher-level executives to implement policies. Staff managers are grouped into functional departments, which permits departments to operate on their own and improves efficiency for a specific business function. They can also be placed in divisional departments. This is a good option for companies that have multiple product lines and have to respond quickly to market changes.
A circular structure is similar in concept to a functional or divisional structure. However instead of the chain of command running vertically, this structure runs horizontally across departments. It’s a great strategy to foster collaboration and https://chartinglogin.com/acquisition-process-flow-chart/ communication among departments. It can also increase trust among employees and foster an environment that is team-oriented.