Organizational structure defines how the work flows through a business by laying out the official reporting and operations roles and relationships within the organization. The construction company organizational chart is a simple graphical illustration of the roles and structure of the organization. Many construction companies choose to divide roles into areas or functions that are responsible for a specific list of tasks, though overlap is fairly common.
Functional design for construction companies
Many construction companies use functional design for creating their organizational charts. In this type of design, the functions handled by each department within the organization are clearly separated in a horizontal structure. Functional design is a popular option for construction companies because there are lots of roles within a construction company that require the same level of knowledge and skills within their area of expertise. When employees are grouped together based on departments, they become more efficient and specialized over time, leading to department growth.
The size of the business will affect the horizontal separation of its hierarchical structure. The bigger the company, the more horizontal separation because they can afford to have more departments. A smaller business may need to combine its marketing and development teams into one department for the sake of efficiency, for example.
In order to make a functional organization design work as the company grows, managers need to find a way to ensure that individual department goals continue to align with overall company goals. For example, an individual department may have a primary goal to improve safety standards for their projects while the overall organization has a primary goal to follow its strategic plan in a way that carries out the company vision. In order to keep things running smoothly, horizontal department heads will need to communicate clearly so they can give cohesive instructions to their project managers. From there, vertical communication can happen according to the chain of command in the organization.
Organizational Structure of a Construction Company
The owner/CEO sits at the top of the organizational chart, typically followed by the general manager, department managers, project managers, project supervisors, project coordinators, and finally the workers.
Here are the most common five basic function units / departments for construction companies:
- Project / construction operations department
- Financial department
- Human resources department
- Purchasing department
- Engineering department
- Marketing / development department
Within these departments, the specific roles such as project coordinator are defined within a hierarchical structure. The structure should make clear how decisions are made and the way that communication should flow, from the department head down to the workers. The level of authority given to each role will depend on both the size of the organization and the personal preference of the owner and department heads.
The owner or CEO is the highest-ranking person at the company. They are responsible for the overall growth and profitability of the business.
The general manager makes decisions regarding the company’s employees in order to direct the day-to-day operations of the company and help the company achieve its goals.
Project managers ensure that projects are completed on time and stay within budget by helping to resolve any issues that pop up.
Project supervisors oversee the project to ensure that bills of quantities and labor requirements are being handled properly.
The project coordinator supervises the day-to-day work of the project and makes sure workers are completing their tasks.
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