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Designation Hierarchy in a Private Limited Company

In this article, we will discuss the corporate designation hierarchy of the private limited company, levels of management, types of management roles, and their responsibilities.

Overview

The success of a business organization can be easily attributed to its operating structure. Productively operating a business requires the right Designation Hierarchy to perform the most suitable roles.

The corporate hierarchy is the prominent factor of organizational success for every small or large scale business. Growing startups should ensure that they are following the right management structure for their organization.

On the other hand, established companies should reevaluate their organizational structure.

Re-examination of the management hierarchy in a private limited company can lead to optimum utilization of resources and increases operating efficiency.

What is the Designation Hierarchy in a Private Limited Company?

The organizational chart of a private limited has a very substantial impact on its performance and sustainability. Let us understand the Designation Hierarchy in a company and their respective roles.

Organizational structure of a private limited company-

• The Managing Director

The directors represent the top level management of the company. These are the people who are having the responsibility and authority to act in the interest of the company.

A managing director will be selected from the list of directors with the responsibility to manage the affairs of the company.

This person, with assistance from other directors, will select other managers or officers. The MD will further designate these officers with their respective duties and roles.

• Chief Executive Officer (CEO)

The Chief Executive Officer is the topmost executive of a Private Limited Company. He/she enjoys the apex position and carries ultimate responsibility to take the managerial decision for day to day working of the company.

• Chief Operating Officer (COO)

The Chief Operating Officer is considered as the second top executive authority in the Designation Hierarchy. He/she is responsible for the core business activities of the company.

The function of COO includes heading the business operations for the company at all levels along with framing operations policies, development of operations strategies. He is also responsible for leading Various Operations Managers under his department.

1. Operations Manager

Operations Managers work under the Chief Operating Officer and assist in obtaining operational efficiency and effectiveness in operational activities.

• Chief Financial Officer (CFO)

Chief Financial Officer is the topmost executive for managing the financial affairs of the company. He is responsible for managing cash flow, budgeting, financial strategy, internal financial control, fundraising, etc.

The Chief Financial Manager supervises Finance Managers of the Company.

1. Finance Manager

The Finance Managers of the company are responsible for handling the financial operations of the company and report to the CFO. These are responsible for Bookkeeping, Accounting, and other financial functions.

• Chief Technology Officer (CTO)

The Chief Technological Officer is the person who heads the development of technology services and products. He also supervises the technological process; technological policies, maintenance of technological assets of the organization.

1.  Technology Manager

Technology managers work with direction from the CTO and assist in the technological development and management of the organizations.

• Chief Legal Officer (CLO)

The Legal Officer of the company is responsible for handling legal matters of the company along with acting as the first channel of correspondence with the statutory authorities.

There can be one or more than one managers working under the legal departments^[1] head by CLO.

1. Legal Managers

Legal Managers work under the Chief Legal Officer and assist in managing legal matters of the organization.

• Chief Marketing Officer (CMO)

The Chief Marketing Officer heads marketing activities for the organization. His work responsibility includes running marketing campaigns, making marketing strategies, operating various channels of marketing, improving brand image, etc.

1. Marketing Managers

The CMO get assistance from Marketing Managers who are responsible for heading various functions of the marketing department. They assist in implementing marketing strategies with the help of subordinates.

Other Managers in Designation Hierarchy

There are other managers in an organization apart from the managers that are assisting top executives or officers.

These are the ones responsible for heading and executing individual functions. These people may or may not be assisted by a group of subordinates.

These executives are responsible for administrative or functional activities for the organization.

• Administrative Manager-

Administrative Manager is responsible for managing the administrative functions of the organization.

• Store Managers-

This manager is responsible for inventory management for the company.

• Regional Manager-

Regional managers exist in large organizations where business operations take place over a large geographical area.

• Human Resource Manager–

Human resource manager of manage employees and their relations with the organization. They act as a bridge between the employees and the administration.

Role of Subordinates in Company Hierarchy

The subordinates are the employees that work under the supervision of managers. They help the managers to execute and implement various strategies and policies.

This category constitutes the largest majority of employees in the company Designation Hierarchy. These people perform the last mile implementation task to achieve goals set by the top level of management.

Additionally, they function to implement the work strategies set by managers.

Conclusion

Having an understanding of the right Designation Hierarchy of a company can lead to numerous benefits for the management.

Additionally, understanding the various management roles and their responsibilities can help the executives to deliver optimum performance. Moreover, choosing the right hierarchy can provide sustainable growth to the company.

Read our article:Registered Office Requirement for Private Limited Company