- Business Management
- Organizational Structure
- How to Design Effective Organizational Structures in Construction
By Indrajit Dutta, eHow Contributor , last updated July 24, 2011
An organizational structure is the framework in which a company manages its hierarchical structure and authority lines. The management may choose to keep all the authority and decision-making powers or share some of those powers with employees. Businesses have several different types of organizational structures from which to choose. A construction company’s choice of organizational structure is based on evaluations of the nature of contracts it undertakes, the expertise levels of its employees, the monetary value of the contracts and the levels of customization needed in each individual contract.
Understand the company’s mission and vision statement completely. This provides you a window into how the company operates and what it wishes to accomplish. Also, analyze the domain of the company. Some companies choose to have a national presence and others operate only in a particular state or county. Evaluate the company’s financial position and standing in the construction industry.
Decide on how the management wishes to manage its authority and accountability. Assess if your management is willing to delegate authority and decision-making powers to its employees or whether it wishes to make all the decisions. Make the choice based on the number of roles and functions that need to be performed. It is practical and feasible for the management of a small company to manage everything by itself. As the magnitude of operations and function grow, the management would not be able to control everything.
Define the chains of command for the entire organization. Delineating all the roles, jobs and authority will help you outline the power and workflows for the company. If the company decides on vesting the employees with decision-making rights, it should divide its functions. Every function in the company should have a separate department or division. The authority lines would establish who reports to whom. In the construction company, hierarchy begins with the owners, followed by project managers, supervisors and the construction workers.
Prepare job descriptions for every position. Job descriptions define the duties that every job is required to fulfill. For example, the duties that a technician performs are different from those of an accountant. Make sure that no job requirements overlap.