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A well-designed corporate management structure is essential to ensuring efficient business operations. A business must decide which structure is most suitable to its goals and industry. It must also assess its current structure and make any needed adjustments. Any changes must be carefully made clear to employees, especially in the event that the company is going through a restructuring. In the wrong circumstances, it could cause a sense of cynicism among employees.
The top level of an organization is made up of the board and executive officers including the chief executive (CEO). The CEO is the person who oversees business operations and has authority over almost all lawful business activities. The shareholders play a part in the corporate structure, even though they aren't involved in the daily operations. They are accountable for budgets and have the right to vote on major decisions.
Below the board of directors are staff managers who work with the top executives to enforce policy. Staff managers are grouped into functional departments, which permits each department to work independently and maximize efficiency for a specific business function. They may also be put together in divisional departments. This is ideal for businesses that have a variety of product lines and must respond quickly to market shifts.
A circular structure is similar in concept to a functional or divisional structure. However, instead of the chain of command running vertically, this structure operates horizontally across departments. It's a great strategy to encourage collaboration and communication among departments. It can also increase trust among employees and help to create a team-oriented culture.