Structure

• Corporations are owned by shareholders and, in many instances, shareholders take no active part in the day-to-day running of the firm. Major corporations usually employ a board of directors and a chief executive officer or president who presides over the board. Large firms have thousands of employees and multiple levels of management. Every department manager reports to a regional or district manager and those managers ultimately report the the CEO or president. Therefore, all of the employees, including managers, report to other employees while the CEO or president must report to the shareholders or owners.
  
  

Chain of Command

• Many large firms use a chain of command, which means that every employee has a direct supervisor, and that supervisor handles all of the employees' issues. Chains of command are designed so that high-ranking company officers do not have to deal with day-to-day inter-personal issues or the hiring of entry level workers. Within the chain of command, each manager normally has the ability to hire and fire their own direct reports. In situations involving disputes between an employee and a manager, the supervisor of the manager in question must resolve the dispute.
  
  

Laws

• In the United States, employers must abide by both state and federal employment laws. Employees can sue firms that discriminate against workers based upon factors such as race, color or religion. A company can lose money both due to fines and lost revenue caused by bad publicity if its managers violate employment laws and cause the firm to face lawsuits. To prevent such issues arising, shareholders expect managers, acting as employees, to comply with employment laws. Managers who deviate from the laws are subject to termination.
  
  

Partnerships

• Partnerships are a type of legal structure within which several partners jointly own and operate the firm. Many partnerships hire an office manager to handle the day-to-day affairs of the partners and, at a large firm, the manager may hire an assistant or secretary to help with this task. In such instances, the manager does not report to an employee but reports directly to the owners or partners. Likewise, some Limited Liability Companies have a similar structure in which managers are employees, but they do not report to other employees. Therefore, while all managers are employees, at some point the chain of command ends and the employee at the top of it must report to the owners.