A corporate management structure identifies who is responsible for different areas of a company, which allows the company to take advantage of economies of scale and coordinate their activities. For instance an apparel manufacturer might have separate departments for men’s, women’s wear and children’s wear but one central marketing department. This divisional structure allows each department to concentrate on its own specific product or market, while sharing information in order to improve coordination. This kind of structure could lead to higher employee costs and more duplication for purchasing equipment for different divisions.

Corporations are legal entities that have stockholders and require an established management structure in order to comply with regulations and safeguard the interests of stockholders. The majority of corporations have a multi-level system of directors, officers, and shareholders that oversees the company’s operations.

The top of the pyramid is the chief executive officer (CEO) who is responsible for signing off on contracts and other legally binding actions for the company. A small business’s CEO may be the founder and sole director, officer, or shareholder, in larger companies, be appointed by the board of directors.

The board of directors is comprised of elected representatives of the stockholders what are the benefits of using a virtual data room who oversee the overall direction and policy of the corporation. They select the CEO, supervise his performance and plan for succession. They also approve major business transactions and activities, like contracts, asset purchases and sale new policies, and others.