The proper corporate structure is crucial to ensuring efficient business operations. A company should best vdrs to test now consider what type of structure best fits its goals and the industry. It is also necessary to evaluate the structure it has in place and make any necessary adjustments. Any changes should be cautiously communicated to employees, in particular in the event that the company is going through a reorganization. Otherwise, it can lead to employee cynicism.
The top tier of a company is comprised of the executive officers and board members including the chief executive (CEO). The CEO is responsible for the day-to-day operations of a company and has control over the majority of legal business activities. Shareholders are also a part in the corporate structure but they are not involved in day-today business. They are the ones who oversee budgets and can vote on major decisions.
Below the board of directors are the staff managers who work with the top executives to implement policies. Staff managers are grouped into functional departments, allowing departments to operate on their own and optimizes efficiency for a specific business function. They can also be divided into divisional departments which is ideal for companies with a variety of product lines, and requires quick responses to market shifts.
A circular structure is similar in concept to a functional or divisional structure. However instead of the chain of command that runs vertically, this structure operates horizontally across departments. It is an effective way to promote collaboration and communication between departments. It can also increase trust among employees and create a team-oriented culture.