The corporate structure is an organizational chart that lists the names of employees and reporting relationships. It’s what a business creates to define accountability and responsibility. It’s a necessary component of any company, whether a startup or large global enterprise, and plays a crucial role in helping companies expand. It helps in communication and clarifies the objectives of a business and its chain of command. Without a well-designed organizational structure, companies can become confused and disorganized.
Shareholders own shares of the company, and they have the right to vote on major business decisions. They can also take their support away from the company if unhappy with its management.
Directors are chosen by shareholders to oversee the company’s operations. They set the operating policies as well as expand the business and make financial decisions. In addition, they can also hire and fire management. Directors are accountable for ensuring that the interests of shareholders are considered when making decisions.
Managers are those that oversee the day-today operations 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 about the state of operations and any risks.
The matrix structure is similar in concept to the traditional line structure however it involves teams organized around products or markets rather than job tasks. This kind of structure is suitable for businesses that operate across various regions and industries, but can be difficult to grow.