A corporate management structure defines who is accountable for each part of the company, allowing the company to reap the benefits of economies of scale and coordinate its activities. A clothing manufacturer, for example chartinglogin.com tips are here may have separate departments for women’s, men’s and children’s clothes but a central marketing department. This divisional structure allows each department to concentrate on its specific product or market, while sharing information to improve coordination. This type of structure, however, may result in higher employee costs and more work being duplicated such as when purchasing supplies for multiple divisions.

Corporate entities are legal entities that have shareholders. They require a specific structure for management to conform to laws and protect stockholders’ interests. To this end, many companies have a multi-tiered structure of directors officers, shareholders and directors who oversee the company’s activities.

The CEO is at the top of the pyramid. He is responsible for signing contracts and other legally binding acts on behalf of the corporation. The CEO of a small company could be the sole founder, director, officer and shareholder or in larger companies be appointed by the board of directors.

The board of directors is comprised of elected representatives of the shareholders who decide on the overall direction and policy of the business. They choose and oversee the performance of the CEO as well as oversee succession planning. They also approve major business transactions and actions, like contracts purchase and sale of assets, new policies, and others.