BCE 4103: CONSTRUCTION

MANAGEMENT
• An Organization is a social unit of people,
systematically structured and managed to meet a need
or to pursue collective goals on a continuing basis.

• The organizational structure is the system or process

that helps in achieving these goals

• All Organizations have a management structure that

deter mines the relationships b/w functions and
posit ions a nd sub div id e s a n d d e l e g at e s ro l e s ,
responsibilities and authority to carry out defined tasks.
• Through an orgnizational strucutre an Organization has
a framework within which it arranges it’s lines of
authorities and communications and allocates rights and
duties.

• To develop an efficient oraganisation, the manager has

to deal with;
• Developing the Organizational structure
• Delegation of responsibility
• Relationships between individuals and groups
• Developing sound communication systems
General Principles for forming an
Organization Sytem
1. Span of Management
• The number of managerial levels shouldbe kept at
optimum level.
• To o m a n y l e v e l s w i l l c r e a t e c o n f u s i o n a n d
disorganization. There is a limit to number an executive
can effeciently supervise.
• Higher levels of management 1:3 to 1:5
• Lower lvels of management 1:15 to 1:20
2. Scalar Principle
• There should be a clear line of authority from top to the
bottom levels of management.

• This will result in effecient functioning of manangement

• This simplifies the under standing of author ity

relationships within an organisation.
3. Unity of Command
• Each individual should be clear about who to report to
from whom to take orders.

• Each subordinate should be made reportable to only

one supervisor.

• Otherwise confusion, delays and disorder could happen

often
4. Delegation of Authority
• Whenever any one is expected to shoulder the
responsibility of completing a particular task, they must
b e g i ve n s u f f i c i e n t a u t h o r i t y t o a c h i eve t h i s
responsibility.
• Thus responsibility and authority go hand in hand.
• Therefore for manager s to car ryout their tasks
effectively, they must be delegated with adequate
authority in proportion to their responsibilities.
5. Principle of Division of work
• Any major worj should be suitably divided and allocated
to individuals such that each person has the qualification
and capacity to perform the assigned work in the most
efficient manner
6. Principle of Seperation of work
• Works carriedout by an individual or team should be
checked and controlled by people other than those who
executed the works.
• This helps is identifying the mistakes and taking timely
corrective actions
Types of Organizational
Structures
1. Hierarchical/ Line org structure
2. Functional org structure
3. Horizontal or flat org structure
4. Divisional org structures
5. Line and Staff organisation
6. Matrix org structure
7. Team-based org structure
8. Network org structure
1. Hierarchical/ Line org structure
• It is a pyramid-shaped organizational structure.
• Also called Line organisational structure
• It’s the most common type of organizational structure
• There is a clear line of authority and responsibility and
the chain of command goes from the top to bottom and
each employee has a supervisor.
• Its the oldest and simplest for m of organisation
structure adopted in construction projects
• Better defines levels of authority and responsibility thus
simple and easy for employees to understand.
• Shows who each person reports to or who to talk to
about specific projects
• Discipline among employees is enhanced
• Motivates employees with clear career paths and
chances for promotion
• Facilitates quick decision making.
• Responsibility for any mistake can easily be fixed.
Disadvantages of Hierarchical structure
• C o m m u n i c a t i o n f r o m l owe r l eve l t o t h e t o p
management is handapped thus making ower-level
employees feel like they have less ownership and can’t
express their ideas for the company
• Can slow down innovation or important changes due to
increased bureaucracy
• Can cause employees to act in int erest of t he
department instead of the company as a whole
• Too much concentration of authority at top levels
leading to favouritism.
2. Functional organizational structure
• A functional org structure starts with positions with the
highest levels of responsibility at the top and goes down
from there.
• Employees are organized according to their specific
skills and their corresponding function in the company.
• The whole work is divided in such away that each
person has to perform a minimum number of functions
& is responsible for those functions.
• All similar & related work is grouped together under
one person
• Each separate department is managed independently.
• Allows employees to focus on their role
• Encourages specialization as work is divided on the basis
of functional specialisation hence efficiency will increase
• Help teams and departments feel self-determined
• Is easily scalable in any sized company
• Mental work seperated from manual work
• Can create silos within an organization (working
independently & not sharing)
• Hampers interdepartmental communication
• Obscures processes and strategies for different markets
or products in a company
• No clear cut line of authority
• Abit difficult to co-ordinate
3. Horizontal/ Flat organizational
structure
• This structure fits companies with few levels between
upper management and staff-level employees.
• Many start-up businesses use a horizontal org structure
before they grow large enough to build out different
departments
• Some organizations maintain this structure since it
encourages less supervision and more involvement from
all employees.
3. Horizontal/ Flat organizational
structure
• Gives employees more responsibility
• Fosters more open communication
• Improves coordination and speed of implementing new
ideas

• Can create confusion since employees do not have a

clear supervisor to report to
• Can produce employees with more generalized skills
and knowledge
• Can be difficult to maintain once the company grows
beyond start-up status
4. Divisional organizational structure
• Here a company’s divisions have control over their own
resources, essentially operating like their own company
within the larger organization.
• Each division can have its own marketing team, sales
team, IT team, etc.
• This structure works well for large companies as it
empowers the various divisions to make decisions
without everyone having to repor t to just a few
executives.
4. Types of Divisional organizational
structure
Depending on your organization’s focus, there are
a few variations to consider;

a) Market - based divisional organizational structure

b) Product based divisional organizational structure
c) Goegraphical based divisional organizational structure
• Divisions are separated by market, industry, or
customer type. A large consumer goods company, like
Target or Walmart, might separate its durable goods
(clothing, electronics, furniture, etc.) from its food or
logistics divisions.
• Divisions are separated by product line.
• For example, a construction company might have a
division dedicated to construction projects, while the
rest of the divisions focus on other products and
services such;
• Concrete products manufacture & sale,
• Hardware business,
• Material transportation business etc
• Divisions are separated by region, territories, or
districts, offering more effective localization and
logistics.
• Companies might establish satellite offices across the
country country or the globe in order to stay close to
their customers.
• A good example is how governments operate
• Helps large companies stay flexible
• Allows for a quicker response to industry changes or
customer needs
• Promotes independence, autonomy, and a customized
approach
• Can easily lead to duplication of resources
• Can mean insufficient communication between the
headquarters and its divisions
• Can result in a company competing with itself
5. Line & Staff organizational structure

• Its a combination of line and functional structure

• Has worked successsfully in manufacturing industry and
many construction companies evolved from functional
org to a line and staff structure as growth required
additional management strengths
• The staff responsibility is carried out by the functional
specialists with their knowledge & experience while the
line authority maintains displine & stability in the org.
Advantages of Line & Staff structure
• Provides a good combination of specialised services
with the project construction team
• Better quality can be achieve as combination of line &
function org
• Line personnel can devote their entire time to achieve
their targets of the project
• Staff personeryout all their specialised work with
experience & expertise.
• More job opportunities provided.
• Possible conflict between line and functional staff
• Staff personel dont have direct authority to implement
their decisions
• Overhead costs increase due to hiring the services of
the specialised staff personel
6. Matrix organizational structure

• A matrix organizational chart looks like a grid, and it

shows cross-functional teams that form for special
projects.
• A balanced matrix org divides power into functional &
project responsibilities.
• It endeavours to solve the conflicts between the line
personnel & functional staff by opening up lines of
communication at all levels through assignment of dual
reporting responsibility to subordinate manangers
6. Matrix organizational structure
• Functional staff are having equal powers to enforce the
compliance of project with their specilized skills
• Allows supervisors to easily choose individuals by the
needs of a project
• Gives a more dynamic view of the organization
• Encourages employees to use their skills in various
capacities aside from their original roles
• Presents a conflict between department managers and
project managers

• Difficulty in precisely defining the accountability to the

functional and project manangers.

• Overall management and administrative cost are high.

Reading Assignment:

1. Team Organizational Structure

2. Network Organizational structure