How Is a Corporation Managed? (With Management Structures)

A corporation is managed and run by its directors and officers. The directors are appointed by the shareholders and are responsible for the overall management and corporate governance of the corporation. The directors appoint the officers who are responsible for the day to management and operations of the corporation.

As businesses become increasingly complex, the need to establish effective management practices has become essential to their success. A corporation is a legal entity which is typically owned by a group of people, and its management structure includes a board of directors, officers, and shareholders. The board of directors is responsible for setting the overall objectives of the corporation, while officers and other executives make decisions to help the company reach its goals. Shareholders, meanwhile, are responsible for electing the board of directors, who will ultimately decide how the company is managed. This blog post will explore the different aspects of corporate management, how they work together to make a successful business, and the potential risks associated with improper management. We will also look at the different types of management structures that are available, the pros and cons of each, and how to establish an effective management system for your company.

Corp 101: The Basics of Corporate Structure

Importance of corporate management

Corporate management is crucial because it demonstrates to investors the company’s level of integrity as well as its goals and strategies for achieving them. Excellent corporate governance can boost confidence among all stakeholder groups, including local communities. This trust increases the likelihood that the business will be successful for a long time and may be a wise investment for people.

A corporation’s management structure can help it communicate to the market that it shares the interests of the external stakeholders. When choosing the best management structure, it’s crucial for a corporation’s directors and officers to take both internal and external stakeholders into account. All individuals who have a direct relationship with the company, whether through employment or investment, are considered internal stakeholders. The relationships with the external stakeholders are more indirect, and they frequently consist of customers, suppliers, or governmental organizations.

How is a corporation managed?

Directors and officers of a corporation typically assist in managing operations and making crucial business and policy decisions. Directors are frequently chosen by a corporation’s shareholders, or the people who own one or more shares of the business. The directors keep an eye on the company’s daily financial and business operations and make sure the organization complies with all laws and regulations. Along with running the business, they frequently get to choose the corporate governance structure, which establishes the specific procedures they can employ to run and monitor operations.

The corporation’s daily management and operations are handled by the officers that the directors elect, who also work to ensure that the corporation meets the goals that it has set for itself and its stakeholders. Most states only require one director and one officer to run a corporation, and they can both be the same person. Common positions for corporate officers include:


The company’s short- and long-term objectives are assessed by the president, who also oversees employees and executives. Strategic planning is a responsibility of this position, along with monitoring the organization’s compliance with its mission. Additionally, it frequently entails informing stakeholders, such as customers, employees, investors, suppliers, and local communities, of the corporation’s mission, vision, and overall direction.

Vice president

A corporation’s vice president assists in overseeing internal operations and personnel. This job entails managing the organization’s various divisions, including its marketing, finance, sales, and human resources ones. Along with the company’s overall goals and objectives, corporate vice presidents collaborate closely with the president to develop the company’s strategic vision.


In accordance with the corporation’s bylaws, its articles of incorporation, and any applicable governmental regulations, the secretary assists in maintaining the corporation’s records and manages a variety of corporate agendas. While a corporation’s articles of incorporation contain crucial details about the entity, such as the date of incorporation, name, address, and the number of shares to be issued to shareholders, its bylaws serve as the primary rules and regulations that guide its day-to-day operations. The secretary also helps to maintain shareholder lists.


A corporation’s treasurer oversees all aspects of its finances, including potential risks associated with its business operations. By informing investors of potential investment opportunities, this position assists in protecting the corporation’s value. Additionally, treasurers keep books, assist in managing the company’s fixed assets, and issue stock.

Types of corporate management structures

The level of direct management that executives and other high-level employees intend to exercise over the company will frequently determine the best corporate management structure. For new hires who are learning who manages what in the company, management structures can be especially helpful. The management structure can frequently change or adapt as the business expands to better meet its needs. Many types of corporate management structures exist, including:

Hierarchical structure

One of the most typical management structures for a corporation is a hierarchical one. The majority of crucial management decisions are typically made by senior corporate executives, who then delegate them to lower levels of management. To control how various levels of management can communicate with one another, this structure employs specific standards and procedures. Employees at the bottom of the hierarchy are typically required to submit a formal request in order to participate in decision-making. Regardless of position, this structure aims to help provide employees with clear accountability.

Flat structure

There are very few levels of middle management between the leadership of the company and its employees in a flat organizational structure. There may not always be any middle management between the top management and the workforce. Since there are far fewer employees and there is less of a direct need for a more hierarchical structure, this structure is most prevalent in smaller corporations. All employees can participate in the decision-making process, even though this type of structure may not allow for as much accountability as a hierarchical structure.

Functional structure

According to their job function, a functional management structure decides who manages what within the company. The business divides up different areas of expertise or specialization within the business and administers them separately from one another. These could be the departments in charge of marketing, human resources, products, operations, purchasing, or accounting. With this structure, all employees will be able to specialize to a high degree and can hone their skills in their particular field to determine where they will be most useful.

Divisional structure

Depending on a number of variables, a divisional management structure divides the workforce into distinct divisions or branches. These elements could relate to the market, location, service, or product. Each division in an organization with a product-based divisional structure concentrates on a particular product line. Similarly, a service-based structure focuses on specific services. While a market-based structure establishes divisions based on various markets or customers, a geographic-based structure creates divisions based on locations, including countries, regions, or districts. No matter the kind, the divisional structure aims to let staff members concentrate on a single aspect of the company.

Network structure

A network management structure is typically used by businesses that frequently collaborate with other organizations to share resources or that have multiple locations with various leadership roles and management teams. This structure, which is comparable to the divisional structure, aims to coordinate how the corporation’s resources are distributed. It groups employees based on outsourced offices or smaller offices that are distinct from the main office or offices rather than dividing them into different offices for different products, services, locations, or markets. This structure encourages collaboration and open communication between employees.

Matrix structure

Teams of employees under a matrix management structure are responsible to two different managers. These include a functional manager who coordinates the efforts of staff members with related responsibilities and a product or project manager who coordinates the efforts of numerous workers to create a new product or manage a project for the company. The matrix structure combines various management structures, which frequently facilitates resource sharing and offers staff members the chance to develop their skills by working on a variety of projects for the business.

Team-based structure

A management structure thats team-based groups employees into separate teams. Although each member of these teams typically has significant authority and decision-making skills, they may all report to a single manager. Typically, a team-based structure values experience over seniority in employees. This organizational structure aims to give staff members more control over procedures as they cooperate on a common objective.

Tips for effective corporate management

Regardless of the structure, consider these pointers for efficient corporate management:

Create trust

Creating trust is important for leaders in any industry. Companies can gain the trust of their internal stakeholders by keeping their promises and praising their top performers. By supplying workers with the resources they require to do their best work, they can also foster a culture of trust. Having external stakeholders allows a company to be sincere and persistent in its mission. Enhancing public trust also requires paying attention to critics.

Develop an explicit organizational strategy

The first step to ensuring successful long-term performance is an explicit organizational strategy. Understanding corporate strategy is crucial, especially for maintaining employees’ focus on the organization’s mission. The more obvious the plan, the simpler it may be to implement. For instance, a fast-food company’s organizational strategy might be to find a lucrative segment of the market and develop a new product to better serve its needs.

Practice self-evaluation regularly

Self-evaluations can be useful for identifying and eliminating potential problems. Many businesses hire consultants to assess their operations and increase efficiency. Customer and employee surveys can also give a business insightful information about the general efficacy of its management and policies.


Is a corporation managed by the owners?

Unlimited life – A corporation’s owners are its stockholders, shareholders, or members, and a board of directors is in charge of running it.

Who are the managers in a corporation?

A corporate manager is a business expert who is in charge of the general operations of an organization. A corporate manager may work in the financial, marketing, manufacturing, or technology sectors, among others. They assist in developing and putting into action business strategies as members of the executive team.

How do you take control of a corporation?

How to Really Take Control of Your Business
  1. Define Work. …
  2. Choose Good Metrics. …
  3. Implement Regular Feedback. …
  4. Assign Clear Responsibilities and Accountabilities. …
  5. Establish Weekly, Monthly and Quarterly Reviews. …
  6. Implement a Formal Problem-Solving System. …
  7. Commit to a Long-Term Management System.

How is a corporation governed?

A certificate of incorporation, also known as a charter or articles of incorporation, and a set of bylaws, which specify board election and voting procedures, govern corporations.

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