The company that I work for is a construction company, just as with most construction companies, the organizational structure of the company is a matrix organizational structure. The way that the hierarchical levels are in this company is; the owner/CEO occupies the highest position. The next position down the vertical structure is a shared level of management, which is occupied by a project manager, and a super intendant. Each project has their own project manager and super intendant that report to the owner/CEO. The company that I work for is a decentralized organization, where “decision making occurs at the level of the people who are most directly affected and have the most intimate knowledge about the problem” (Bateman & Snell, 2011). The reason that this is the most effective for this company is, because of the need in the construction industry for decisions made in a timely manner, in order for the project at hand to effectively and efficiently get done. In some instances it would not be conducive to go through the process of the decision going up the vertical structure.
The company that I work for employs two different trades- sheet metal workers, and carpenters- this is the reason that if the company were organized with the functional structure or divisional structure, it would be less efficient. In the matrix structure, there is only one project manager, and one super intendant for each project. All of the decisions for both trades, for the project are made at this level. Since the company employs two different trades, the mutual adjustment coordination is essential. If the company were organized with the functional structure, any decisions would have to be collaborated horizontally between the project managers, sheet metal super intendant, and the carpenter super intendant. This would be a longer process and a counterproductive structure.
In the construction industry, most companies are not large enough to implement the divisional organizational structure. The divisional structure, just as the functional structure, would essentially be counterproductive to the effectiveness of the company. In a divisional organizational structure, any major decisions would take a longer period of time to be made, and in effect would slow down production. The construction industry is a face paced industry, and the functional and divisional structures would not be as effective as the matrix structure. The organizational functions of the company that I work for are also more efficient in the matrix structure.
All of the company’s functions are project specific in the construction industry. Each project has its own budget, its own human resource needs, as well as operational needs. The matrix structure is the most effective structure based on the fact of the project specific needs that are required. As far as the finance for the project is concerned, each project has its own budget. In the matrix structure, it is the project manager, and the super intendants responsibility to ensure that the project is completed within this budget. This is possible based on the fact that these two positions are on site at the project, and are responsible for this one project. Whereas, if it were a divisional structure, the finance department for the company would have the responsibility of ordering material for the project. If the finance department were not familiar with the need for the specific project, too much material, too little material or the wrong material may be ordered. Another function that is project specific is the human resource function.
Each project in the construction industry may have a unique manpower requirements. One project may have a need for fifteen carpenters, and eighteen sheet metal workers, and another project may only need twelve carpenters, and ten sheet metal workers. If the company had one human resource department, there would be a possibility of having too much manpower or not