Corporate structure is the organizational chart of job titles and reporting relationships that a business creates to define accountability and responsibility. It is a vital component of every company – whether it’s a small start-up or a large global enterprise and plays a crucial role in assisting businesses to grow. It aids in communication and clarifies the mission of a business and its hierarchy of command. Organizations can become chaotic and confused if they don’t have a well-designed management structure.
Shareholders are the people who own shares in the company and possess a voting right to influence major business decisions. They may also decide to withdraw their support of an organization if they’re not satisfied with its direction.
Directors are individuals elected by shareholders to oversee the operation of a company. They make decisions regarding setting operational policies, expanding the business, and making financial decisions. They also have the power to fire and recruit management. Directors are responsible to ensure that the interests and concerns of shareholders are taken into consideration when making decisions.
Managers are those that oversee the day-today activities of a company and are accountable for meeting the objectives set by the board of directors. They also have the responsibility of keeping the board informed of the status of operations and any risk.
The matrix structure is similar to the traditional line structure however, it is a team structure that are grouped around products or markets instead of job functions. This type of structure is useful for businesses that operate across different regions and industries, but can be difficult to scale.
