STRUCTURE OF

CONSTRUCTION
BUSINESSES
Gutierrez, Jeffry V.
Pico, Gianna Charissa M.
01. TYPES OF CONSTRUCTION
COMPANIES

02. ORGANIZATIONAL STRUCTURE

03. HIERARCHY IN
CONSTRUCTION COMPANIES

04. BENEFITS OF A WELL-DEFINED STRUCTURE

05. ROLES AND RESPONSIBILITIES

LEGAL AND REGULATORY CONSIDERATION

06.
BEST PRACTICES FOR STRUCTURING
07. CONSTRUCTION BUSINESS

08. IMPORTANCE OF LEADERSHIP IN CONSTRUCTION

BUSINESS

TABLE OF
CONTENT
TYPES OF CONSTRUCTION
BUSINESS
REAL ESTATE DEVELOPER
Real estate developers build
and market properties, often
large-scale projects, for
profit. They acquire land,
secure funding, get necessary
permits, hire designers, and
manage the project. While
developers typically own the
property, they can also be
hired by property owners for
their expertise.
ARCHITECTURE FIRM

Architecture or design firms

create project drawings and
specifications, often hired by
real estate firms or owners.
They may also manage the
project, hiring contractors
and handling payments.
ENGINEERING FIRM

Engineering firms collaborate

with design teams to ensure
project designs are safe,
meet building codes and
regulations, and are suitable
for the specific location.
They also help evaluate and
test different approaches to
guarantee project success.
CONSTRUCTION
MANAGEMENT
Construction management
companies oversee all
aspects of large projects,
including hiring and
managing the project team
(project manager, general
contractor, and specialty
contractors). They typically
handle contractor
management and payments.
ORGANIZATIONAL
STRUCTURE
FUNCTIONAL ORGANIZATIONAL STRUCTURE
It's also referred to as a bureaucratic organizational structure. It
breaks up a company based on the specialization of its
workforce.
Employees are grouped based on their specialties (e.g.,
engineering, finance, operations). This structure enhances
expertise but may lead to siloed departments.
Clear roles and responsibilities, specialized expertise, and
efficient workflow within departments.
DIVISIONAL OR MULTIDIVISIONAL
ORGANIZATIONAL STRUCTURE
In this structure, the company is divided into semi-autonomous
units or divisions, each responsible for a specific project, market,
or geographic area. Each division operates like a mini-company
with its own resources and functions.
A company that uses this method structures its leadership team
based on the products, projects, or subsidiaries it operates.
Johnson & Johnson is a good example of this structure. The
company has thousands of products and lines of business. It
structures itself so each business unit operates as its own
company with its own president.
MATRIX ORGANIZATIONAL STRUCTURE
Employees report to multiple managers (project and functional
managers)
Encourages collaboration across departments
Can be complex to manage
Balances project and operational needs
TEAM-BASED ORGANIZATIONAL
STRUCTURE
Teams are formed around specific projects, and employees work
directly under project managers. This structure is highly flexible
but may lead to inefficiencies when projects end.
Team-based organizations segregate into close-knit teams of
employees that serve particular goals and functions, similar to
divisional or functional structures. Each team is a unit that
contains both leaders and workers
The success of the construction company depends on effective
communication, collaboration, and leadership. This structure
promotes a dynamic and adaptable work environment that can
respond quickly to project needs and challenges.
FLAT HIERARCHICAL
ORGANIZATIONAL VS. ORGANIZATIONAL
STRUCTURE STRUCTURE
Few or no levels of Multiple layers of
middle management management
Direct communication Clear chain of command
between staff and Defined roles and
executives responsibilities
Faster decision-making Suitable for larger
process companies with complex
Can be less formal and operations
more flexible clear authority and
accountability.
CENTRALIZED VS. DECENTRALIZED
Decision-making Distributed Decision-
authority is concentrated Making
at the top levels of the Local Adaptation and
organizational hierarchy Flexibility
Consistent Policies and Autonomy and
Procedures Responsibility
Clear Chain of Command Diverse Perspectives
Speed of Implementation Decentralized
Centralized management management emphasizes
focuses on uniformity, flexibility, local
control, and quick adaptation, and
implementation employee empowerment.
  ENEFITS OF WELL-
B
DEFINED STRUCTURE
 Organizational structure benefits a company by defining hierarchy
and pay structure, improving operational efficiency through
departmentalization, and clarifying employee roles and
SALES
expectations. It also helps potential employees assess their fit
with the company.
HIERARCHY IN
CONSTRUCTION
COMPANIES
 This hierarchical structure ensures clear lines of communication,
responsibility, and accountability within the company. It helps in
managing projects effectively and ensuring that all team members
SALES
understand their roles and responsibilities.
LARGE CONSTRUCTION COMPANIES
SMALL CONSTRUCTION COMPANIES
 LEGAL AND
REGULATORY
CONSIDERATIONS
LICENSES
Licenses are necessary because
they ensure businesses operate
legally and meet certain
standards, protecting consumers
and maintaining order within a
specific industry or jurisdiction.
INSURANCE
Insurance protects a business
from financial losses due to
unforeseen events like accidents,
natural disasters, or lawsuits,
ensuring its continued operation
and financial stability.
ZONING LAWS
Zoning laws dictate how land can
be used, ensuring businesses
operate in appropriate locations
and don't negatively impact
surrounding areas.

 ONFIDENTIALITY AND NON-

C
DISCLOSURE AAGREEMENTS
Confidentiality and non-disclosure
agreements (NDAs) protect a business's
sensitive information, like trade secrets
and customer data, by legally restricting
employees and other parties from sharing
it.
BEST PRACTICES FOR
STRUCTURING A
CONSTRUCTION
BUSINESSES
1. CLEAR COMMUNICATION CHANNELS
Establish open lines of communication through regular
meetings, emails, and digital platforms.
Maintain transparency in the flow of information from top
management to field staff.
Implement a feedback mechanism for employees to voice
concerns and suggestions.

2. DEFINED ROLES AND RESPONSIBILITIES

Provide clear job descriptions for every role within the
organization.
Assign tasks based on team members' strengths and
expertise.
Establish clear lines of accountability so each team
member knows who they report to.
3. EFFICIENT PROJECT MANAGEMENT SYSTEMS
Utilize project management software like Microsoft
Project, Procore, or Buildertrend to track project
timelines, resources, and deliverables.
Develop and adhere to Standard Operating Procedures
(SOPs) for consistency and quality in project execution.
Efficiently manage resources, including labor, materials,
and equipment, to prevent delays and cost overruns.
THANK YOU!
For listening

Gutierrez, Jeffry V.
Pico, Gianna Charissa M.