Industry Structures and Activities

Organizational structure is tied to the effectiveness of a company to execute its mandate. If a firm reconsiders its organizational structure, management restructuring is done to increase to increase the efficiency and effectiveness of the organization. Zaki (403) has depicted that there is no one perfect organizational structure, especially in the construction industry. The primary reasons firms engage in organizing is for responsibility, authority, and accountability. Organizing brings together duties, people, and resources for the same goal of achieving the objectives of a company. There exist four organizational structures; a company chooses the best fit structure to enable achievement of its goals.
Traditional structure
Five decades ago, organizational structures were a common sight since companies had one or two product lines hence conflicts were not an often occurrence. This type of structure is not commonly used in construction firms in the contemporary times. Under the traditional structure, coordination of projects is complex as much time is needed for a decision to get approval (Zaki 404).

Figure 1(Zaki 404)
Functional structure
Functional organizational structure groups employees according to their capabilities and specialization. Functional structures work well with medium sized companies. The presence of well-developed products or services in a firm will dictate the use of functional organization structure. Career development for members who exhibit competency is possible under this structure (Zaki 406).

Communication is easier due to the existence of well-established vertical channels. Functional mangers have absolute authority to control the budget where projects are expected to be complete within the allocated budget and time. Functional structures have flexibility on the use of resources when projects demand extra resources (Zaki 406). Employees of a firm with functional organization work in teams of specialties and expertise (Zaki 406).

Figure 2(Zaki 406)
Divisional structure
Divisional organizational structure groups employees into clusters of either product, a project, customers served or even a geographical area (Zaki 407). Special focus is given to the different areas of differentiation thereby enabling the firm to address issues at a personalized level. Employees respond to changes quickly due to their proximity to a region, customer or product. Divisional structures are known for their instability in employment provision as projects can be terminated at any time.

Figure 3(Zaki 407)
Matrix structure
A matrix organizational structure takes advantage of function, project and the departmental structures. The decision-making process is simple due to the devolution of authority; budgeting and staffing are created and managed effortlessly (Zaki 408). Employees work in groups and are accountable as a team for project deliverables and execution. New processes can be started purposely for certain projects if there are no conflicting issues with the general policies and procedures of a firm.

Figure 4(Zaki 408)
Various business organization structures exist, but those commonly used in the construction industry are the traditional, functional, divisional, and matrix organization systems (Zaki 403). Traditional organization systems work well with sole proprietors since they while the other three work well with associations.
The size and scale of a contract that a company is to be involved in, will affect the organizational structure of a construction firm. Where the contract is extensive and involves several geographical locations the matrix mode of organizational is best suited to handle such a contract. On the other hand, small to medium sized contracts are well handled under the functional organization structure. The kind of project falls within the scope of contract impact on the management and organization of business (Drew et al. 393). Various contracts come in the form of the varied projects. A Project a business engages in will determine the type of business organization to be adopted if the project is to be completed successfully.
When companies acquire clients through contracts, a firm will endeavor to satisfy the needs of a client. If a client is a multinational, a business will adjust accordingly by changing the management system as concerning business organization model to handle an activity. Clients that do not have operations spanning large geographic areas will be well served by the functional organization system (Drew et al. 395). Clients who engage in activities that need close supervision are well served through the matrix kind of business organization.
Every client that comes to a firm may choose what procurement strategy to be used in serving its needs. Clients who have a series of projects resort to using of collaborative strategy in procurement. The performance of contractors can be monitored using pre-defined indicators for each of the projects they undertake (Naoum and Mustapha 221). Procurement can occur in the various forms that exist; they include separated, integrated, packaged and relational procurement methods. Functions anticipated to be undertaken by a business determines the type of organization to be adopted by a business management (Naoum and Mustapha 221).
Business practices of a firm get handled by the management team. The management oversees the daily running of business including coming up with the organization structure of business. The size and scale of a contract that a firm enters into affects the type of business organization adopted by a firm in handling the contract; various contracts have custom instructions, different clients, and different procurement methods that determine the type of business organization to be adopted by a business.

Works cited
Drew, Derek, Martin Skitmore, and Hing Po Lo. “The effect of client and type and size of construction work on a contractor’s bidding strategy.” Building and Environment 36.3 (2001): 393-406.
Naoum, S. G., and F. H. Mustapha. “Influences of the client, designer and procurement methods on project performance.” CIB REPORT (1994): 221-221.
Zaki, Mahmoud A. “Analyzing Organizational Structure For Contracting Firms’of Classification” A”, Egypt.” (2015): 403-428.