Organizational Analysis: Term Definition

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According to Mabely, Storey and Salaman (2001), an organization structure can be regarded as that relationship existing between the roles of any one given organization, and its different divisions or parts. The authors see the purpose of such a structure as one that is dedicated to work and responsibilities allocation, with a view to directing the activities of such an organization towards the attainment of the goals of the organization. As it were, an organization structure enable managers to plan, organize, direct and control the organization activities (Mullings, 1993, Mabely, Storey & Salaman, 2001).

From a formal point of view, the structure of an organization is a determinant of the present hierarchy within such an organization. It is a simpler way of defining who is supposed to report to whom. Also called an organization chart, there are several types of organization structures that are applied by different organizations, in line with their goals and strategies. Organizations structures could also be viewed at from the perspective of the division of labor in a given organization, as well as the hierarchical flow of such work, its coordination and the mechanisms of forces involved in order to ensure a possible coordination (Mabely et al, 2001).

Importance of organization structure

If at all an organization aspires to achieve a maximum performance, then the design as well as the structure of such an organization has to match with the changing environment under which such an organization is operating at. At the same time, the importance of an organization culture becomes apparent; in as far as its relation to the structure and design of an organization, and this thus creates a need for the emergence of new organization forms (Richard, 2007). As it were, the organizational design of any given organization is what gives it life, and the vice versa is also true.

In fact, the structure and the design of an organization will usually be intertwined with the various human resources management aspects of such an organization. For this reason, it thus becomes evident that the structure of any one given organization plays a significant key role in as far as the important human resources aspects of such an organization are concerned. In addition, the structure of an organization, as well as the underlying principle design of such an organization have also to be in tandem with the organization’s core purposes, and the larger environment under which such a business operates.

Otherwise, the success and survival of such an organization is more than likely to be positive. In fact, the importance of an organization structure is often overlooked, as evidenced by the prevailing gap between the corporate strategy of a business establishment, as this aspect is usually rarely consider with respect to the strategy of such an organization. The design of an organization structure is often the role of a business manager, and some of the managers have really neglected this vital role.

Elements of an organization structure

Division of labor

This refers to the subdivision of the various work in an organization, and the assigning of these to the various personnel I the organization. The idea behind the division of labor in any one given organization is so as to improve on the working efficiency. At the same time, division of labor become vital, especially as the organization grows in size, and as it also becomes more complex in nature. There must first be a division of labor, such as will lead to distinguished tasks.

As a result, this will normally lead to specialized jobs. There has to be a coordinated form of labor, so that through their work, the personnel of an organization will lead to the achievement of the set company goals, in order for there to be a from of coordination in and organization, then this will be made possible through a formal hierarchy, standardization, and when the mode of communication used is informal (Richard, 2007).

Span of control

A span of control is used in reference to the number of people that reports directly to the next level or hierarchical authority. As such, a span of control helps in the coordination of the work in am organization, following a direct supervision of the personnel (Woodward, 1965). When other methods of coordination are also used, then it is possible to achieve a wider span of control. A wider span of control also becomes necessary when the tasks of subordinates are more or less similar, or becomes a routine.

At the same time, those organizations that utilize a flatter structure will also need a wider span of control, for a similar number of people in the organization. For an organization that has a narrow span of control, and then it means that a manager in such an organization will usually have very few subordinates under her. Consequently, such an organization is forced to have more hierarchical levels in its organization chart, as opposed to one whose span of control is wide (Woodward, 1965).


This involves the way power and authority is distributed and shared in the hierarchy of the organization. Some organizations will normally have centralized system, meaning that power and authority are vested to a few top mangers. On the other hand, the decentralization of the same would mina that even a local manager of a company like say, coca cola in India, would have authority and power, as if they were at the head offices of the parent company (Richard, 2007).

Situational influences on organizational design

Other than the environment under which an organization operates in, it will also be affected by a few other factors. Bateman and Zeithaml (1990) opines that the environment, the technology, the lifecycle and size of the organization, will also have an impact in ads far as its organization design is concerned. The authors have further provided that the relationship that is there between the structure of an organization, and its size, is one of a simple contingency. In this regard, those organizations with a larger workforce will also be characterized high levels of job specialization, formalization, and a higher decentralization degree.

The work technology at any one given organization will also have an impact on this issue. Perrow (1967), through a classification of various organizations, on the basis of their work technology, was able to predict which among them were the most effective. Perrow was also of the opinion that work technology is not only a reference to the machineries that are used in the conversion of inputs to outputs, but also involved the use of skills and knowledge in the process of such a transformation.

Organizational analysis of CRH plc

CRH plc is a group is an international group that handles building materials. The group has its headquarters in Irelands, but has operations in 22 countries. As of now, CRH is involved in three core businesses that are also related. These include primary raw materials, building products that are value-added, and a specialization in the distribution of building materials. Apart from an official listing on both the London and Irish stock exchanges, CRH plc also has a presence in the US’ NASDAQ. The company has enjoyed an 18 percent annual return on its share holders, and the average has been consistent ever since the group was established in 1970 (Business case study, 2000).

Development strategy

The development strategy of the company is to invest in upcoming and novel capacity, while also being committed to the development of both products and markets. In addition, the group is also committed to growth, as evidenced by its appetite for the acquiring of those companies that are medium-sized, and also dealing in the same products as they. In a bid to support this long-term strategy for development, CRH plc is committed to larger acquisitions, while also aspiring to extend the reach of the group in newer geographical areas.

At the same time, the addition of new product ranges to th3 already existing brands, has also acted as a growth platform for the company, into the future. The company has a strategic vision of growing to become the leaders in the provision of building materials, from an international level, while also being committed to growth and performance (Business case study, 2000).

Organization structure at CRH

Matrix organization structure at CRH plc

Given that CRH plc is heavily involved in the construction industry, it has become important for the management to utilize the matrix structure of organization, in an attempt to capture the benefits of both the product and functional organization structures. The basis of this move is the ‘project-driven’ driving force that is a characteristic of the construction and building industries (Baligh, 2006). At CRH plc, individual project managers are under the authority of a vice president to the relevant divisions, to whom the report directly to.

As it were, the powers that these project managers hold stems from their vice presidents. Owing to the mandatory nature of information sharing in this company, the success of any one given project is based on the accountability and responsibility of a project manager. On the other hand, it is the role of the functional departments to ensure that a technical excellence of the organization is maintained at all times (Baligh, 2006). To this end, department mangers are at the helm of such departments, charged with the responsibility of ensuring the maintenance of a technical base that is unified.

At the same time, the departmental heads also ensures that they share information with other departments. By employing a matrix structure at CRH plc, the management aims at responsibilities sharing between functional and project management. As a result of the sharing of key people, there is also a minimization of the project cost. In addition, conflicts are also minimized, thus making it possible to balance performance, time and costs. Moreover, there is also a sharing of responsibilities and authorities (Baligh, 2006).

Span of control at CRH

A CRH plc, there are three ways through which managers can interact with their manager. One is a direct method, and this involves a one-on-one encounter. Also, the manager may also interact with the subordinates via a cross-cultural relationship, and this involves the employees interacting amongst themselves. Finally, another mode of interaction is the group method that involves various subordinates. This is indeed illustrates a wider span of control

Decentralized management system at CRT

The organization operates on a decentralized organization management system. In this regard, the authority and power at the organization is usually delegated in all levels of the organization, as opposed to a case where the power and authority is vested in a centralized position, meaning they are vested to a few managers (Business case study, 2000). In addition, the local managers that are present in the organization enjoy autonomy and responsibility even at their local level. In a bid to structure itself as a centralized system of organization structure, CRH has had to focus more on their products, while also applying some strategic principles.

Strategic principles at CRH

CRH believes in the old adage of ‘sticking to the knitting’. Thus, the organization has had to concentrate purely on the supplying to their clients of construction and building materials. This is made possible through the organization core businesses; primary materials, distribution of and value-added building products. Following such a concentration on a given specific area of business, the company has been able to create an operating strength and valuable synergy. In addition, the company is a firm believer that local markets are what builds up leadership in markets. As such, CRH does not hesitate to pay fair prices for good companies that it hopes to acquire (Business case study, 2000).

This is often achieved following deals and negotiation, and which not only meets the needs of the owners, but also offer business growth potential in the years to come. Based on its presence in 22 countries, as well as the wide assortment of products at their disposal, this acts as excellent opportunities for future growth. As has been noted, CRH is more concerned with the acquisition of medium-level companies.

However, the company also believes in the acquisition of larger firms too, as these offers valuable and strategic opportunities, as well as a platform that would facilitate future growth. In essence, this is more or less a value addition to an acquisition. Finally, CRH enjoys a unique and balance business portfolio, in the areas of the products that they handle. In addition, this also applies across the regions that the organization has presence in (Business case study, 2000).

Communication at CRH

Due to the differences in terms of culture and language in the diverse regions that the company operates in, the company is very much committed to communication as a tool for enhance its growth and development. To this end, CRH views personal contact as being an essential means for its effective management of the various products divisions. However, use is made of other forms of communication to augment personal contact. For targeted and timely communications, the company has dedicated the use of email and video conferencing (Business case study, 2000).

At the same time, information sharing at the organization is made possible, thanks to the presence of intranet. In addition, the company has a magazine that is produced centrally, but at the same time published in six languages, then distributed throughout the various businesses under the umbrella of the CRH Group. The company has also established what it calls ‘12 best practices’ groups, and these have been established as a way of enhancing and promoting a feeling of synergy among the various working groups (Business case study, 2000).


For an organization to be able to harmonize its activities for the achievement of its goals, the strategies of such ha company must be such that they are intertwined with the organization design of such an organization. A good organization structure illustrates the span of control in an organization, as well as the division of labor. At the same time, the organization structure that a company adopts varies, depending on the core activities of such an organization.

In the example analyzed here, CRH plc employs a product type of organization structure, and this thus enable the organization to grow and develop its core business. CRH plc has also augmented the functional department with the product structure, to form a matrix structure that affords them synergy. The Company has also placed an emphasis on the language of communication, based on its global touch, as well as a belief and practice of key strategies that have seen the success of the international group thus far.


Bateman, T.S. & Zeithaml, C.P. (1990) Management: Function and Strategy. Homewood, Illinois: Irwin.

Baligh, H. (2006). Organization structures; theory and design, analysis and prescription. Amsterdam: Birkhauser. Web.

Business 2000 case study. (2000). CRT: Understanding organization structure. Web.

Daft, R.L. (2000) Management. (Fifth edition). Forth Worth, TX: Dryden.

Perrow, C. ‘A framework for the comparative analysis of organizations’, American Sociological Review, 32 (1967):194-208.

Richard L. Organization Theory and Design, 9th Ed. (2007) Thomson Nelson.

Woodward, J. (1965) Industrial Organization: Theory and Practice. London: Oxford University Press.

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