Organizational Structure of Companies


An organizational structure provides the roles and activities of individuals with a purpose of meeting the specific aims and objectives of the company. Organizational structures assist people to meet career, personal as well as organizational goals. It also structure stipulates four main objectives such as; division of tasks, coordination of efforts and tasks among employees, control over the manner in which tasks are performed, and information flow. The organizations need to design appropriate positions, duties, responsibilities, and authority in order to accomplish the four objectives. In this paper I will describe the current organizational structure of Barbour Brown Engineering Ltd, recommend appropriate structure for the proposed new organization, identify the factors that affect the organizational structure, identify the different line staff, functional, and lateral relationships within the proposed new structure, and finally explain how the proposed new organization should practice.

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Looking at the case study, it is evident that Barbour Brown Engineering ltd specializes mainly in designing civil and structural projects, while John Colbert civil Engineering Contractors are specialists in development of civil and structural engineering projects. According to this case study, the proposed merger is intended to cater for both design and development of civil and structural engineering projects. As a civil engineering consulting company, the information in the case study indicates that Barbour Brown Engineering ltd does not have a clear organizational structure. However, characteristics of a hybrid structure can be traced in this case study. A hybrid organizational structure encompasses elements of both the matrix and functional structures. The matrix structure is shown when the company is accomplishing specific projects. In this structure, available workforces with experience in specialized areas are often grouped together for the duration of the project. A matrix organizational structure contains work teams assembled from various departments of the business. These work teams are formed for the purposes of accomplishing specific projects and are usually led by a project manager. In most cases, the team will only last for the duration of the project and the matrix structures are then deployed to develop new products and services. In this firm, employees with experience in specific fields are grouped with personnel teams from John Colbert Engineering Contractors for the duration of the project. These teams are led by project manager in consultation with the functional manager from John Colbert Engineering Contractors. The project manager integrates the work of the functional department and the project team.

The proposal to merge Barbour Brown Engineering ltd with John Colbert Engineering contractors can only succeed if an appropriate organization structure is adopted to facilitate the activities performed by the new organization organization. Should the proposal to merge the two companies go through I would recommend the new company to adopt matrix organizational structure. I believe that a mix of project organizational structure dominantly practiced in Barbour Brown Company and functional organizational structure in John Colbert Company will be appropriate. It is more appropriate for various reasons such as: one, appropriate for the new company as it allows working in multiple projects at a time. Two, matrix organizational structures allow the organization to focus on both the project and the customers. Three, the structure retains functional expertise. Four, under this structure, the workforce can be assigned to various types of projects. Five, both project managers and functional managers are allocated responsibilities in this structure. Six, the project manager is the link between the company and the customers. Last but not least, the functional manager under this structure has freedom to decide how tasks will be accomplished.

According to contingency approaches, organizational structures of companies must be able to fit to situations they come across. These circumstances vary, and therefore different structures turn out to be more effective. In other words, the ideal organizational structure is contingent or situational, depending on certain contextual factors such as; size of the organization, technologies adopted, levels of competition, economic environment, dimensions of the organizational structures such as specialization, centralization, decision making, formalization, standardization, and many others. In designing the organizational structure of the new organization, the following major factors may take prominence on the designing of the structure. First, the structure for the new company will depend on the product and services to be developed and rendered by the company. In the case study, Barbour Brown Engineering ltd organizational structure can be defined within the prism of project organization. John Colbert Engineering Contractors ltd on the other hand is defined within the prism of functional organization. In this case therefore, a project organizational structure will exist of product oriented flows that is, project and teams. The project members will temporarily leave their functional departments and devote most of their time to the project. Therefore, the merger will formally enable project engineers to manage construction staff. Before, the design engineer was in control of a given project on site informally; therefore merging the two companies will clarify the relationship. The majority of people under this organizational structure are professionals who are less specialized and have broader tasks, skills and responsibilities. Second, the nature of the projects to be undertaken by the new company immensely influences the organizational structure to be designed. Projects are usually characterized by the number of people needed to work on the tasks and the number of tasks that are fundamentally different in nature. Third, the complexity of the projects to be undertaken greatly influences the design of the organizational structure for new company. For instance, projects which are fairly of low complexity are likely to be implemented in one functional department. If there are more departments involved then the light weighted matrix organizational structure shall be preferable. Here, the employees are engaged on full time basis. Tasks may be performed concurrently where the sequence is determined using design structure matrix. Fourth, the aspect of technology is a major contingency factor that influences organizational design. The organization structure to be designed must support the emergent core technologies necessary for implementation of company activities. The structure should allow the emergent technologies to be utilized to the best advantage of the company. Fifth, a change in the size of organizations is another important contingent factor that influences organizational design of a new company. The should allow flexibility to be able to handle changes in the organizational expansion at different stages of the organizational life cycle. Last but not least, changing workers empowerment needs is a contingent factor that can influence the organization design. The structure should be designed in a manner the supports and empowers employees and enables them to utilize their talents to the best advantage.

Different line and staff, functional structures, and lateral relationships can be identified within the proposed new structure. The line and staff organization structure is where information and approvals flow from top to bottom, with staff sections for support and specialization. This structure is more centralized where line and staff managers have authority over their subordinates. However, staff managers have no authority over line managers and their subordinates. The lateral relationship in the organizational structure is used to offset coordination problems in functional and project structures as illustrated in the proposed organizational chart below.

Chief Executive
Figure 1. Chief Executive

The basis of the above organization chart is an attempt to form synergism through shared responsibility between the project manager and functional management. The organizational chart indicates a mix of functional and project organization. This is because the new company is anticipated to work in multiple projects at a time. It also retains functional expertise. Both project manager and functional manager have responsibilities where the project manager plays the coordination role whereas the functional manager decides how the tasks will be accomplished.

Barbour Brown Engineering ltd and John Colbert Civil Engineering Contractors shall require constant and wide interaction between them in order to integrate people in multi displinary teams, with formalized and interactive communication processes which enhance coordination that guarantees information distribution between design teams and specialist teams. For the proposed new organizational structure to practice, transversal structures that guarantees process interactivity and accommodates different project participants from different cultural changes. This will require the establishment of interactive flow approach oriented design engineers and specialist teams. The magnitude and cultural changes encountered during the merger points out to the concept significance and practice in partnership, as vital items to solve conflicts and create synergy between design engineers and functional specialists.

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