Modern Construction Project Management, Second Edition

S.L. Tang Francis K.W. Wong S.W. Poon Syed M. Ahmed

Published by Hong Kong University Press, HKU

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PRINCIPLES OF ORGANIZATIONAL

STRUCTURES

Introduction

An organizational structure involves a group of people among whom ther e are interaction , communicatio n an d coordination . Ther e i s usuall y a n objective which the organization aims to achieve under a set of constraints. For example, a contractor's site organization has the objective of completing the works assigned t o him, and th e constraint s ar e raw materia l supplies , labour supplies , finance an d so on.

There are three principal types of organizational structures : 1. projec t organizatio n 2. functiona l organizatio n 3. matri x organizatio n

Project Organizatio n

In a project organization , eac h membe r o f th e tea m i s responsible fo r a particular task . I t i s therefor e task-oriented . A n exampl e o f projec t organization i s a highway projec t (Fig . 1.1 ) whic h consist s o f tunnelling , building and road works.

4 MODER N CONSTRUCTIO N PROJEC T MANAGEMEN T

Foreman (tunnel)

WD C n wo

"33 &

C/5

WD

WD

O

E

GENERAL FOREMA N

r 1 I 1

c WD WD

aS i -

c o U

• Foreman (building)

-H-rn same as LH.S.

same as LH.S.

Fig. 1.1 Exampl e of a project organization.

This form of organization has the merit of simplicity — each person is clearly instructed i n his duty and authority . The disadvantage is that i t sometimes does not fully utilize the resources available for each task. Fo r example, the concreting gang attached to the tunnel section does not work in the building section even thought it is idle at times. The merits and demerits of a project organization wil l be further discusse d in section 4 of this chapter .

3. Functiona l Organizatio n

In contrast to the project organization (whic h is task-oriented), a functiona l organization i s specialist-oriented. Specialist s in each field ar e responsibl e for thei r own functions. A n example of functional organizatio n is shown in Fig.1.2.

PRINCIPLES OF ORGANIZATIONAL STRUCTURES 5

GEI GENERAL FOREMA N

Foreman (Concreting)

Foreman Forema n (Form work) (Steel )

Foreman (Labourers)

Fig. 1.2 Exampl e of a functional organization.

From th e organizatio n char t (Fi g 1.2) , on e ca n se e tha t eac h forema n i s responsible for carrying out work within his own specialism, e.g. for concrete work, steel work and so on. Each specialist contributes t o the constructio n of tunnel, building and road works.

6 MODER N CONSTRUCTION PROJECT MANAGEMEN T

4. Advantage s an d Disadvantage s o f Projec t Organizatio n and Functional Organizatio n

4.1 A comparison of the characteristics of the two forms of organizations is shown in Table 1.1.

Characteristics

Project organizatio n

• Branc h head s are generalists.

• Suitabl e for works which mus t be completed i n a specific time.

• Suitabl e for dynamic works .

• Suitabl e for relatively smal l organizations.

Functional organizatio n

• Branc h head s are specialists.

• Suitabl e for works which run from calenda r yea r to calendar year .

• Suitabl e for routine works .

• Suitabl e for large organizations.

Table 1.1 Compariso n of characteristics of project organizatio n

and functional organization .

4.2 Ther e are some aspects in which the project organizatio n is better tha n the functional organization . They are shown in Table 1.2.

PRINCIPLES OF ORGANIZATIONAL STRUCTURE S

Advantages of project organizatio n over functional organizatio n

Project organizatio n

• Fas t decision, due to simpl e and clear line s of duty an d responsibility.

• Mor e innovative , sinc e problems are usually solve d on the spot or within a branch.

• Ver y efficient i n achievin g specific target .

Functional organizatio n

• Bureaucratic , probabl y du e to protectionism betwee n specialist branches .

• Les s innovative, sinc e functions ar e separate and problems mus t be referred t o the relevan t branches .

• Les s efficient i n achievin g target.

Table 1.2 Aspect s i n which projec t organizatio n i s more advantageou s

than functional organization .

4 .3 Ther e are also aspects in which the functional organizatio n is better than the project organization. They are shown in Table 1.3.

Advantages of functional organizatio n over project organizatio n

Project organizatio n

• Mor e expensive , becaus e resources are sometimes no t fully utilized .

• Les s chance for staf f development o n specia l knowledge o r skill .

Functional organizatio n

• Les s expensive, because there is less wastage i n utilizin g resources.

• Mor e chances for developin g special knowledg e o r skill .

Table 1.3 Aspect s i n which functiona l organizatio n i s more advantageou s

than projec t organization .

• MODER N CONSTRUCTION PROJECT MANAGEMENT

5. Matri x Organizatio n

A matrix organization is a combination of project organization and functiona l organization. Fig . 1.3 show s an example o f a matrix organization . On e ca n see that the labourer forema n (functional ) i s at the same level as the othe r project foremen .

Foreman (tunnel)

GENERAL FOREM A

1 N

Foreman (building)

Foreman (road)

Foreman (labourers)

Fig. 1.3 Exampl e of a matrix organization.

In this case, the project foremen do not have their own labourers. All labourers are supplied by a functional forema n wh o i s at the same level/rank a s the project foremen .

Sometimes, an organization can be purely matrix. Fig. 1.4 shows an example of a purely matrix organization. In this purely-matrix organization, the project foremen d o not have working gangs of their own. All resources are supplied by the functional foremen .

PRINCIPLES OF ORGANIZATIONA L STRUCTURE S 9

General Foreman

Foreman (tunnel)

\ Foreman (building)

Foreman (road)

Foreman (concrete)

Foreman (formwork)

Foreman (steel)

Foreman (labourers)

Tunnel gang

Building gang

Lines from functiona l heads to tunnel an d building gangs are no t shown fo r simplicity .

Fig. 1. 4 Exampl e of a purely matri x organization .

The purely matri x organizatio n show n i n Fig . 1.4 i s usually represented b y a diagram whic h look s lik e a matrix (Fig . 1.5). Th e horizonta l line s represen t funct ional responsibi l i t ie s an d th e vertica l l ine s represen t projec t responsibilities.

1 0 MODER N CONSTRUCTION PROJEC T MANAGEMENT

<

I Foreman (tunnel)

I I

" 1 } " "c73

i

!

GENERAL FOREMA N

1 Foreman (building)

1 I

| Foreman

(road)

1

Functional responsibilit y

!

1 i

i

j ,—

Foreman (concrete)

Foreman (formwork)

Foreman (steel)

Foreman / i - u . ~ M „ \

Fig. 1.5 A typical matri x organization .

The matri x organizatio n ha s th e advantage s o f both th e projec t an d th e functional organizations . I t attempt s t o optimiz e th e efficienc y o f a n organization i n a particular environmen t an d fo r a particular objective . However, ther e is a disadvantage in a matrix organization : on e person ma y work under two bosses. For example, a carpenter working under the formwork foreman, a functional foreman , will also be working under the road foreman , a project foreman (Fig . 1.4). This is acceptable if the relationship between the formwork forema n an d the road foreman i s good, otherwise a lot of disputes may arise . O f course , th e organizatio n char t show s onl y th e forma l relationships; valuable informal relationships cannot be seen from th e chart . These can increase cooperation withi n th e organization , provide d tha t th e formal relationships are not overlooked .

In the next chapter , we will see how these different form s o f organization s are applied in contracting and consulting firms .