A corporate management structure determines who is responsible for each department of the company, allowing the company to reap the benefits of economies of scale and coordinate its activities. A clothing manufacturer, for example 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 a specific product or market, while sharing information to improve coordination. This type of structure can result in higher costs for employees and also more duplication, such when purchasing items for different divisions.

Corporations are legal entities that have shareholders. They require a certain structure for management to conform to regulations and protect shareholders’ interests. This is why the majority of corporations have a multi-tiered management system of directors officers, shareholders and directors that oversee the company’s operations.

The CEO is at the top of the pyramid. He is responsible for negotiating contracts and other legally-binding actions on behalf digital restructuring in corporations of the corporation. A small corporation’s CEO might be the sole founder and chief director, officer and shareholder or in larger corporations, be appointed by the board of directors.

The board of directors is comprised of elected representatives of the stockholders who oversee the overall direction and policy of the company. They decide and oversee the performance of the CEO, and also manage succession planning. They also approve major business transactions and activities like contracts purchase and sale of assets, new policies, and so on.