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A corporate management structure defines who is responsible for different areas of a business which allows the company to take advantage of economies of scale as well as coordinate activities. A clothing manufacturer, for instance, may have separate departments for women’s, men’s and children’s clothes but a central marketing department. This divisional structure allows the different departments to focus on their specific product and market while sharing information to ensure better coordination. This type of structure can result in higher expenses for employees and more duplicate work in purchasing equipment for different divisions.
Corporate entities are legal entities that have stockholders. They require a particular management structure to be in compliance with laws and protect shareholders’ interests. Most companies have a multi-level system of officers, directors, and shareholders that oversees the operation of the company.
The CEO is at the top of the pyramid. He is responsible for signing contracts and other legally binding actions on behalf chartinglogin.com tips are here of the corporation. A small company’s CEO could be the sole founder, director, officer, or shareholder, or in larger firms they are appointed by the board of directors.
The board of directors is comprised of elected representatives of the stockholders who control the overall direction and policy of the company. They select and monitor the performance of the CEO and manage succession planning. They also approve major business transactions and activities such as contracts, asset purchases and sale new policies, and the list goes on.
