Difference Between CEO and MD

An organization or company is a set of people who are organized and set on their ideas for development towards the country, like the government.

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Business Quiz

Test your knowledge about topics related to business

1 / 10

Whose liability is limited to the extent of value of business assets and his private assets?

Partnership Firm

Sole Proprietorship

Co-Operative Society

HUF

2 / 10

This city has the highest cost of living in the world.

Geneva (Switzerland)

New York City (United States of America)

Tokyo (Japan)

Tel Aviv (Israel)

3 / 10

Which of the following is not an economic activity?

A doctor practicing

A lawyer practicing law

A professional cricketer playing cricket

A student playing cricket

4 / 10

Modular furniture __________.

saves costs

saves time

saves space

saves electricity

5 / 10

Wages and taxes that a company pays are examples of:

Revenue

Loss

Expenses

Profit

6 / 10

If a general manager asks the sales manager to recruit some salesman on his behalf, it is an instance of ___________.

Division of authority

Decentralisation of authority

Delegation of authority

Delegation of responsibility

7 / 10

A person who risks both time and money to start and manage a business is called ___________.

Overachiever

Supervisor

Entrepreneur

Narcissist

8 / 10

Which country's currency is called the Baht?

India

Hong Kong

Thailand

Sweden

9 / 10

Cash flow is:

Measured as time versus revenue

Is measured by output and input of hours

Money paid to employees

The movement of money into and out of a company

10 / 10

Over-capitalization results from __________.

payment of excessive amount for goodwill

underestimating the rate of capitalization

raising more money than can be profitably used

raising only the money

Your score is

Like every other institute, organizations also have their own set of hierarchical authorities that help in the management and the growth of it.

In an organization, there needs to be employers and employees who have the same goal i.e., working for the growth of the company and accomplishing the goals set for the company.

They are divided amongst various groups and are each given tasks for management.

Key Takeaways

The CEO is responsible for a company’s overall strategy and direction and reports to the board of directors.

The MD is responsible for the company’s day-to-day operations and reports to the CEO.

While the roles of CEO and MD can overlap, the CEO typically focuses on long-term planning, while the MD focuses on executing the company’s plans.

CEO vs MD

The difference between CEO and MD is that the face of the CEO can be used to represent the company during meetings and other gatherings for business but the same cannot be done with the MD.

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CEO or the Chief Executive Officer is one of the major executive entities or individuals who work in the management of the company.

They come under the board of directors and have to work according to their decisions. Their main responsibility is to maximise the profit for the organization.

MD or the Managing Director is the person who is in charge of the functioning of the organization and management of the business.

They report to the chairman and the CEO. The MD belong to the board of managing directors and are responsible for the day to day functioning and performance of the company.

Comparison Table

Parameters of Comparison	CEO	MD
Abbreviation for	Chief Executive Officer	Managing Director
Level in the organization	They come under the board of directors and among other executive officers like CMO.	They belong to the board of directors and report to the chairman
Authority	The board of directors have authority over the CEO	Are accountable to the CEO as they come under CEOs
Responsibility for performance	They are responsible for the overall performance of the company	Are responsible for individual or particular division’s performance for the company
Other responsibility	They are focused on guiding other executive officers	They are focused on managing day to day activities of the company
Functions	They are required to facilitate business with their ideas and strategic visions for improving the company	Helps in managing the overall management of the company
Representation	They represent the entire company	They do not represent the company unless the CEO and MD of the company are the same.

What is the CEO?

A CEO is a person who manages the performance of the company and ensures profits for the company or organisation they are working for. A CEO can be used as a representative of the company.

They are required to have strategic visions and plans for improving the development of the company and bring profit for company. They have to overlook the functioning of the employees and guide other executive officers with their work.

A CEO can be found in a public or private organization as well in NGO and non-paid organizations. The CEOs of this generation are required to have a top degree in science, technology and business management.

The CEO of a company is not necessarily the owner of the company and depending on the structure of the company their responsibilities and roles can change.

What is MD?

A managing director or an MD is responsible for the daily functioning of the company and to check the performance of the individual employees or a particular group of them.

They belong to the board of directing managers and are responsible for the business and management of the overall company.

In some companies, they work as the head of a unit within a company rather than in the management of the entire company’s functioning.

An MD cannot be used as a representative of the company. This is only possible if the CEO and MD of the company are the same individuals.

Main Differences Between CEO and MD

CEO stands for Chief Executive Officer whereas MD stands for Managing Director.
In a company or an organization, the CEOs come under the board of directors and among other executive officers like CMO, CCM, etc. On the other hand, MD belongs to the board of managing directors and report to the chairman of the company.
The board of directors hold authority over the CEOs whereas the CEOs hold authority over the MDs. They are even allowed to order them.
They are both responsible for the performance of their employees but the difference being CEOs are responsible for the overall performance of the company during deals. But MD is responsible for the performance of an individual or particular divisions of the company.
The other responsibilities of CEO include being focused on guiding other executive officers of their level. MD is also responsible for managing the day to day activities of the company.
CEOs are required to facilitate business meetings with their ideas and strategic visions for the development of their company. On the other hand, MD is required to help the board of managing directors to make decisions and also work on the management of the company.
The face of a CEO is often used for representing the company. This is not the case with MD unless the MD and CEO of the company are the same individuals.

References

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Chara Yadav

Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.