Large organisations have different levels of hierarchy and multiple managers to handle numerous business functionalities. Top managers are the senior-most employees in a company and play a critical role in the overall functioning of an organisation. Knowing the responsibilities of top managers can help you decide whether a senior managerial role suits your interests and skills.
With reference to company management there are various stakeholders like directors, officers, managers and shareholders who guide a company towards the fulfilment of its business objectives. Management has been defined as “the process of planning, organizing, leading and controlling the efforts of company members and of using all company resources to achieve stated company goals.” Hence, the occupation of management is to maintain control over the company’s actions and performance, and simultaneously to lead, inspire and direct the people working in the company.
Need for management and control of a company
To achieve this goal, every company needs strong and effective management. There are different levels of management that aim to organise and coordinate the business of the Company. Literally, management means the process of planning and organising the resources and activities of a business to achieve a goal. Efficient management can complete the task with minimal cost; in this respect, it can be said that efficient management is the primary need of a company. Most of the management team supervises a company, its service, or its production. However, an efficient body of management should be multidimensional. It will influence their team members to apply their strengths towards achieving the company’s goal. A dynamic body of management adapts to new market requirements by implying updated technology. An intangible body of management consists of ideology, policies, and human interaction; it helps to improve a company’s target achievement ratios, employee satisfaction levels, and overall ease of operation.
Management and control of a company
Management of the company means the process of planning, organising, leading, and controlling all the efforts of the company members and using all the resources of the company to achieve the company’s goal. To fulfil the goal or objective of the company, there are a number of stakeholders, like directors, managers, officers, and shareholders. In a simple sentence, it can be said that forming such bodies of members and, accordingly, proper planning to achieve goals is the responsibility of the management of the company in general. In the management of companies, every individual, whether legal or natural, has a specific role and responsibilities to achieve the goals of the company. Maintaining such roles and responsibilities towards every individual attached to the company and the proper distribution of such roles and responsibilities in view of the ultimate development of the company is the main goal of the management of any company.
Body of management to control a company
The body of management comprises various stakeholders, as said earlier, like directors, managers, officers, shareholders or partners, and executive workers. The entire body of management has specific roles and responsibilities to achieve the ultimate goal of the company. We can define the body of management like owners, partners, or shareholders; at the top they may be called the board directors, or the directors may appoint in the form of managerial, executive, sales, etc.; then come officers like CEO, COO, CTO, CLO, CMO, etc.; then come other executive managers and workers. Arranging funds or accumulating material resources is the main objective or role of the owners, partners, or shareholders; developing ideas with resources and investment to achieve the goal of the company is controlled by chief officers like the CEO, COO, CLO, CMO, etc.; and executing such ideas and making them happen in the real world is the responsibility of the executive managers and workers.
Role of Shareholders
Shareholders hold shares making them entitled to a share in the profits and the right to be represented by directors at board meetings. Directors are considered the elected representatives of shareholders. Executive directors are made responsible for continuous decision making in the business. Non-executive directors offer regular advice to the company but are not directly involved in the everyday company management.
Role of Directors
In company management the shareholders will select a board of directors to represent the company’s interests. The following conditions will be observed when selecting the director specifically:
- A minimum of three directors in the case of a Limited Company
- Two directors in the case of a Private Limited Company
- One director in the case of a One Person Company
A Managing Director will be selected who has general responsibility for managing the company’s affairs. The managing director with aid and assistance from other directors will select and employ senior managers or officers related to the domain of company management.
Role of Officers
Officers of a company are appointed by the Board to Directors to hold various top level roles and responsibilities within the company. There is no statutory requirement for appointment of officers in a company. However, Directors are statutorily required to be appointed for all company by its shareholders. Some of the most popular types of officers of a company are:
Chief Executive Officer
Chief Executive Officer (CEO) is the highest-ranking person in a company who is ultimately responsible for taking managerial decisions for the day to day operation of the company.
Chief Operating Officer
Chief Operating Officer (COO) is a senior executive who oversees ongoing business operations within the company. COO reports to the CEO (Chief Executive Officer) and is usually second-in-command within the company.
Chief Financial Officer
Chief financial officer (CFO) is a senior financial executive with responsibility for the financial affairs of a company. Typical responsibilities of the CFO include planning, budgeting, bookkeeping, accounting, setting up of internal controls, fund raising and other accounting/financial matters.
Chief Technology Officer
Chief Technology Officer (CTO) is a senior technology executive within a company who oversees current technology development and maintenance aspects. Typical responsibilities of a CT include aligning of technology-related decisions with the company’s goals, managing technology development, maintaining technology assets and create technology policies.
Chief Marketing Officer
Chief Marketing Officer (CMO) is a senior marketing executive within a company who is involved in a wide variety of tasks like increasing revenue, improving brand image and managing marketing campaigns. CMO works directly with sales, marketing, and development departments to integrate marketing strategies in all divisions of the company.
Chief Legal Officer
Chief Legal Officer (CLO) is a senior legal executive within a company who helps the company reduce its legal risks by advising the company and its employees or stakeholders on major legal and regulatory issues the company confronts and manage litigation risks.
FAQs
What is a company management structure?
A company management structure defines the hierarchy of authority and roles within an organization. It outlines how tasks are delegated, who reports to whom, and the responsibilities of each role to ensure smooth operations.
What are the key roles in a company’s management structure?
The key roles typically include:
- Board of Directors: Oversees the overall direction and management of the company.
- CEO (Chief Executive Officer): Responsible for implementing board decisions and managing overall operations.
- CFO (Chief Financial Officer): Manages financial planning, risk management, and financial reporting.
- COO (Chief Operating Officer): Oversees daily business operations.
- Managers (departmental or functional): Handle specific departments like HR, sales, or marketing.