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Text 2. Corporate Structures

The terms public and private convey very different connotations to ordinary people. Public organisations are often pictured as wasteful large mazes to employ bureaucrats and to create red tape, while private organisations are viewed to be run by hard-nosed managers who worry only about profit and consumers. Management in government is harder than in private sector and there exist many reasons for that. Public organisations are more dependent on government allocations, more constrained by law, more exposed to political influences and more difficult to evaluate than business organisations. However, whether in business or government a dominant form of any administration is bureaucracy.

Bureaucracies are generally defined as organisations which are large, hierarchical in structure, provide each employee with a defined role and area of responsibility, base their decisions on impersonal rules and hire and promote employees taking into account their skills and training related to specific job.

A corporate structure is essentially the layout of the various departments, divisions, and job positions that interact to conduct the business of the company. Generally, a corporate structure is necessary in order to ensure that all important tasks are conducted according to the guidelines of the corporation. Even the smallest of businesses have a corporate structure. A corporate structure usually helps to accomplish three things. First, it helps to define all the areas of responsibility within the company. Thus, the accounting department both in public and private companies must handle all financial matters, such as paying the bills of the company and issuing invoices for services rendered. Then the corporate structure helps to establish a line of communication for employees to utilize. By establishing this line of communication, the corporate structure helps ensure effective interaction to minimize time wasted by information moving through the company in a disorganised manner. Lastly, the corporate structure helps to establish a working chain or line of authority. Corporations often require responsible persons placed at various points in the structure to ensure tasks are handle properly and in accordance with company bylaws. Corporate hierarchy describes the type of power structure in an organisation. Often, the term "corporate hierarchy" is used to show how different positions and departments are arranged from the lowest to the highest on the organisational ladder. Most companies, both private and public, usually have a Chief Executive Officer (CEO) at the helm of affairs followed by vice presidents as the next set of people in the order of the corporate hierarchy.

The determination of the exact placement of individuals in the hierarchy depends on the particular industry and the type of company. For example, the type of corporate hierarchy in a steel production plant will differ substantially from the type of corporate hierarchy in a law firm. Finally, both public and private organisations have a common dilemma - they need stability and change.

Answer the questions:

1. How are public organisations often pictured?

2. Why is management in government harder than in private business?

3. What is a dominant form of any administration?

4. How can bureaucracies be defined?

5. How do bureaucracies hire and promote employees?

6. What is a corporate structure?

7. What does a corporate structure usually help to accomplish?

8. How does a corporate structure help to establish a line of communication?

9. Who is at the helm of affairs in a company?

10. When is the term "corporate hierarchy" usually used?

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