What Is Meant By Corporate Governance?


From a business point of view, a company is a relatively complex form of organization. It is made up of several areas and the focus is always on people: They work, perform various tasks and are exposed to different situations. They almost always pursue goals for the future of your company – sometimes not the same ones – because employees of a company are active separately due to the division of labor. This has advantages, but harbors the risk that groups or individuals within the organization will set themselves apart.


If you are still a beginner when it comes to corporate management, you must understand that your company can only optimally implement its tasks and goals if you coordinate people and their actions accordingly . In this context, you as a decision-maker have a great responsibility:

  • You have to align your teams towards a common goal – the success of your company.
  • Successful corporate management means guiding your employees across departments in such a way that their work efficiently serves all processes in the company.
  • This implies that they coordinate their decisions in order to perform the range of tasks of your company holistically.

You see, running a company means giving importance to all aspects of coordination. Tips for corporate management therefore often provide for delegating coordination tasks to other people in the company. Together with you, they form the management of the company as an institution . A distinction must be made between the activities that your teams carry out in practice – they describe the functions of corporate management. In addition, the question of “How is it managed?” also plays a role. The latter focuses on process optimization in the company.

Modern Corporate Management Acts Strategically

If you are looking for a clear definition of the term corporate management within business administration, you will quickly find that there is not just “one” approach. Leading your company builds above all on skills, strategies and, last but not least, on your willingness to flexibly integrate changes in the market into your own management . If you implement the basics of modern corporate management, then you lay the foundation for a successful company with which you not only make profits, but also secure your future in the long term. You will acquire knowledge about strategic corporate management in specialist books, guidebooks and business dictionaries.

Main Tasks of a Company Management

In business jargon, the terms management and corporate governance are often used synonymously . In any case, this means the management of business organizations, primarily of companies. As you have already read, you have to differentiate between the questions “Who is leading?”, “How is leadership?” and “What is leadership used for?” Here is a small overview for you:

Who Leads?

In addition to the owner of the company, it is the managers who take on management tasks as the company grows.

What is led by?

This is about goal-oriented decisions that are important for production, sales, investment and financing. They influence the existence and future of your company and combine resources, personnel and responsibility for third parties.

How is it managed?

Today it’s not just about knowledge of economic theory, but also about luck and intuition when you or your team plan or implement decisions. Behavioral concepts therefore also play a role, since according to experts it is not just about “doing the right things, but doing things right!”

Agile Management: Old Methods Rediscovered

Agility is not a new topic. It was developed by sociologists in the 1950s and has regained immense importance through digitization and the effects of globalization . According to scientific opinion, agility as a concept can be applied to all organizational systems. In the practice of companies like yours, the following four aspects are emphasized for agility:

  • Speed ​​with which companies react to change
  • Adaptability to accommodate change
  • Customer centricity to increase customer satisfaction
  • Attitude to introduce new behaviors internally

You can also read many synonyms for “agile” in the specialist literature: e.g. B. flexible, proactive or proactive . It’s always about adapting to change , which in terms of corporate management and control means being several steps ahead of the competition if possible. Agile corporate management encourages your employees to continuously learn, think creatively and share knowledge.


Proponents of agile management have therefore learned to understand corporate management not only in the context of controlling and key figures, even though the latter are essential instruments of corporate management .

Incidentally, their principle is easy to understand: Key figures, also known as KPI (Key Performance Indicators), measure success factors or show weak points in your company. If they are positive, you can maintain your functional management strategies. If they turn out badly, you should counteract them with new decisions. Therefore learn for your company management: For example, use KPIs in your accounting or marketing department or in your production. With their help you can identify and measure the following characteristics:

  • customer satisfaction
  • productivity and innovation
  • process quality
  • industry comparison
  • level of liquidity

It is worthwhile for you to keep an eye on your key figures, after all they enable you to take timely measures to achieve value-oriented corporate management. If you are a founder, you will initially not be able to afford a controlling department with specialist staff. That’s why you have to deal with the key figures of your company independently . An example is the personnel cost ratio, which shows your personnel expenses in relation to sales. Therefore, introduce at least a few key figures as an indicator of your success.


If you run a company, then you coordinate all the storylines of your company and take care of the short-term core business or all ongoing business activities . The operational business as a planning module is usually designed for one year. You must keep it strictly separate from alternative side businesses. This is relevant to accounting, which records everything that amounts to either a profit or a loss. In this way, your operating result is determined , which consists exclusively of processes from the operational business.

Founders like you face a lot of challenges in everyday life. Therefore, it is immensely important to structure your thoughts and actions in order to plan in the short term and in a process-oriented manner. In order for your operational management to be successful, you must set detailed targets with your management team and monitor their implementation . This is the only way to succeed in corporate management and services or production and all necessary organizational work run smoothly. Managing your employees is also part of the operative business . Operational management is responsible – i.e. you and the managers at the lower hierarchical levels.


In the theory of operational management, the terms strategy and tactics play an important role, because all planning levels are interdependent. It actually goes without saying that successful corporate management must have medium-term and long-term plans for business activities and processes at hand. After all, they determine the day-to-day business. In this context, the focus is on your company departments or product groups. The tactical alignment within your company is therefore also about your medium-term financial planning and budgeting . Both are based on the results of day-to-day operations.

As a strategist who wants to steer your company through all the ups and downs, you have certainly already defined big goals . They feed on your company principles and always have a long-term effect. For example, if you enter into a cooperation or plan to expand your production facilities, these are measures that will only have a delayed impact on you and your company’s success. Sometimes the goals are not specifically formulated because you still need space to develop them. No matter what strategies you will come up with for the next five to ten years, you as the company leader are responsible for them. In the following, the core statements are summarized for you :

  • Operational management always lasts one year. It includes planning, monitoring and controlling your goals for the current core business. ‍
  • Operational planning is process-oriented action planning and a component of your holistic corporate planning .
  • Operational planning and strategic planning are interdependent . Because operational planning results from the strategic orientation of your company.

Conclusion: Prerequisites For Successful Corporate Management

Managing a company means mastering complex challenges. You have to assume that being an entrepreneur will not always be easy. It is therefore important that you do not “go under” in the operative core business, but take care of the management of your company in an efficient and success-oriented way. Business management is a long-term task, the basics of which you should internalize. Because the market and competitors will always challenge you. You have to do the balancing act between profit-oriented corporate strategies and a leadership culture that keeps your employees happy and your customers happy. The following goals must be on your agenda if you want to survive on the market as an agile start-up talent:

  • Clear corporate strategies
  • Strong corporate philosophy
  • Value-oriented corporate culture


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