The importance of leadership can not be undermined in the success of any business. Leaders are needed to take what would have been a mere idea into something of worth. In business, leadership comes with corporate management. Corporate management is the leading of an organization by a group of senior executives, and managers. These executives and managers take up the manor departments in an organization where they spearhead its affairs. Based on an organization's needs, corporate management can be either flat or multifaceted.
The Idea Behind Corporate Management
The success of an organization is tied to the actualization if its goals. These goals are set in alignment with the growth of its product or service. Hence the need for corporate management. To ensure that at the various levels, the managers are working not just in tandem with their co-managers, but also with their teams to ensure that these goals are surpassed. The ability to checkmate a business through this leading is what is mostly responsible for an organization’s success.
Difference Between Corporate Management and Corporate Governance
Before we go on to external corporate management, it is important to differentiate between what corporate management and corporate governance, as both are often interchanged. With corporate management, you are focused on the strategies to be put in place to grow a business. On the other hand, corporate governance has more to do with measures derived to protect a business or organization. This involves a business adopting policies and procedures that are statute abiding and valuable to stakeholders, while corporate management focuses on making a business soar. However, one thing that can not be taken away from this is that they work in tandem for a business to flourish.
External Corporate Management
Corporate management can be categorized into two major parts:
· Internal Corporate Management
· External Corporate Management
Internal corporate management is the administration of a business through ownership, executive functions, managerial positions, etc., while external corporate management has to do with laws and regulations guiding the market. Also, external corporate management involves governmental bodies that are in control of enhancing, enforcing, and establishing design methods that promote external corporate management.
In line with its duties, an external corporate management has authorities that ensure that rules and regulations are adhered to. They extend towards judicial matters too, where they take charge of bankruptcy issues, legal challenges, external auditors, etc., are all a part of the external corporate management.
External Corporate Management Mechanisms
One of the crucial mechanisms adopted for external corporate management is through the employment of industry-specific auditing firms. External auditing firms are specialized in the observation and analysis of an organization's modus operandi in order to regulate conflict of interests that may arise through the management of affairs. The statutory auditor examines the financial records and can be a partner to the executive function of the organization. These auditory firms are paid handsomely. Most times, their payments are commensurate to the effort or intensity of their audit. However, these external auditors do get compromised. In a way that persons in managerial and executive positions can pay auditors to give wrong reports on their audit. This way, leaving no trace of their corrupt practices.
Importance of External Corporate Management
1. While internal corporate management focuses on relationships between shareholders and managers, external corporate management focuses on the legitimate angle and how the organization can implement into its goals some of the public policy.
2. Apart from helping a business adapt to a legitimate society, external corporate management helps it to thrive both politically and socially.
3. External corporate management shows that business is also a social entity, that if used to better the lives of its employees, the organization can experience exponential growth. This is not with regards to salary payment, this is about making them a part of the decision-making process in the organization that not only spurs the company, but also the overall lives of its workers.
4. It helps to ensure that even those in leadership positions are executing their roles appropriately and not for selfish reasons. To keep them in check, to avoid a conflict of interest.
5. External corporate management makes it possible for a business to align in the society it is established legitimately.
As you can see, external corporate management plays a crucial role in the growth and establishment of any business. Even as a business owner, your business and its running needs to be regulated according to the terms associated with the field it is subject to for it to be wholly accepted.