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Company structure

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Companies are involved in many activities, e.g. buying, selling, marketing and production, in a range of different industries, such as information technology, telecommunication, film, and car manufacture. Many well-known companies are multinationals, these are companies which operate in a number of countries.

Multinationals often have a complicated structure. There is usually a parent or holding company. This company owns other companies or parts of other companies, called subsidiaries. Larger companies often raise money by selling shares in the business. The people who buy the shares become shareholders. A company is owned by the shareholders who elect a Board of Directors at a general meeting. The Board is responsible for the general policy of the company, formulating plans to achieve objectives. To some extent the company's success and the morale of its workers is dependent on the leadership of the Board of Directors. The Board chooses a Chairman, who may chair meetings of the Board and deliver the annual report. To ensure that the Board has knowledge of the company's operations when reaching its decisions there must be executive directors, usually the managing director and the managers of the most important departments.

The managing director sees how the decisions of the Board of Directors are carried out. Moreover he plays a key role in coordinating the work and views of the departmental managers.Under the managing director there is a horizontal organization of department heads: Production Manager, Marketing Manager, Sales Manager, Chief Accountant, Personal Manager.


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