The correct corporate structure will help you manage your business efficiently. A business must decide the best structure to its objectives and industry. It should also examine its current structure and make any needed adjustments. Any changes must be properly communicated to employees, especially when the company is going through a restructuring. This could lead to cynicism among employees.
The top tier of a corporation is made up of the executive officers and board members including the chief executive (CEO). The CEO is the person who oversees business operations and has control over virtually all lawful business activities. Shareholders play a significant role in the corporate structure, even though they are not directly involved in the day-to-day business. They are accountable for budgets and have the power to vote on major decisions.
Under the board of directors are staff managers, who work with higher-level executives to enforce policy. Staff managers can be divided into functional departments. This allows each department to operate independently and to maximize efficiency. They can also be grouped in divisional departments. This is a good option for companies that have a variety of product lines and need to adapt quickly to market trends.
A circular structure is similar to a divisional or functional structure. However, instead of the chain of command running vertically, this structure operates horizontally across departments. It is a great method to encourage collaboration and communication between departments. It can also create the spirit of teamwork and trust among employees.
