Organizational Structures and Human Capital in Construction Management

This report, prepared for a construction management course, addresses two key aspects of organizational management. Firstly, it compares and contrasts three organizational structures: functional, product, and matrix structures, evaluating their respective advantages and disadvantages. The analysis highlights the flow of information, departmental responsibilities, and overall organizational effectiveness within each structure. Secondly, the report explores the critical role of human capital in maintaining competitiveness within the modern knowledge economy, particularly for building design and construction firms. It identifies factors that firms should consider to attract and retain knowledge workers, such as technological advancements, time punctuality, and decentralized structures. The report emphasizes the importance of relevant skills and the ability to adapt to technological changes. The report also provides references to support the analysis. This assignment provides valuable insights into organizational design and human resource management within the construction industry.

Question and Answer
1.
The organisation structure is a system in which certain activities are outlined in order
to achieve the objective of the organisation. The activities include rules, regulation and
responsibilities. The structure of the organisation helps to determine the flow of information
between the different levels. Each and every organisation adopts the different style of
organisational structure as per the condition and current situation of the workplace. There are
four types of organisational structure and these are a functional, matrix, divisional, and
product structure.
Functional Organisational structure
The functional organisational structure is a structure that consists of activities such as
coordination, supervision, and task allocation. It is the most common structure of the
organisation as per the general format of sharing the information. In this structure, there are
some common departments in which the information is share. Every department has been
separated and perform their own responsibilities in this type of organisation structure such as
human resource, accounting and purchasing department (Chelladurai, Radzi, & Daud, 2017).
Product Organisational structure
Another common structure of the company is the product organisational structure. In
the structure, each product group is separated from the other product and the report is
prepared as per the structure on the particular product line. In this structure, the departments
are developed on a product basis. Each and every department share the information with each
other related to the particular product in which they are assigned the duty (Maduenyi, Oke,
Fadeyi, & Ajagbe, 2015).

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Matrix Structure
Matrix structure provides the reporting level both horizontally and vertically.
Employees of the company might be the part of the functional group but they also support the
team that supports the new product development. In this kind of structure, the members of
different groups work together in order to develop the new product line. In this kind of
organisation structure, the information can be shared with every department and employees in
order to gain the advantage.
Comparison
It has been seen that the structure of the organisation is different. Every structure has
its advantage to using it. As per the comparison, product organisation structure, every product
has its own line to share the information. It is observed that the Formal structure is more
flexible and comfortable to adopt for the organisation. It is beneficial because it is separated
by expertise in order to share the information and prepare the report. Member of a department
does not share any information with the other department. The systematic work is done by the
company in order to achieve success.
In the matrix organisation, it is observed that the employees are getting motivated in this style
because they have the responsibility not only for the department but for the activities of
organisations. In this structure, the organisation faces the challenge when the employees are
directed by the two employees at the same time. The employees have to reject the one
manager due to which the chance of arising conflict is increasing. In the Functional
organisation structure, every work is done by the employees in a systematic way to do the
work due to which the chance of doing the work is reduced. In the product organisational
structure, the employees are not responsible to maintain the activities of the other department.
It is observed that the employees did not help each other in an urgent period of time because

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their knowledge is not enhancing due to which they are not able to maintain the services of
the other department. The formal structure is beneficial for each situation as the employees
already share the information with each other for the advantage of work. It is an appropriate
structure of the organisation to achieve high success.
2.
Importance of human capital in maintaining competitiveness
Human capital is the sum total of knowledge and skills of a person that the
organisation can use to furthers its goals.
Artificial Intelligence
It has been seen that the company adopt artificial intelligence in order to gain a
competitive advantage. Until the company developed the artificial intelligence, the
organisation requires the human capital to accomplish anything in the world.
Effective management
It has been seen that human capital is the main asset in the modern knowledge
economy. It is observed that if the human knows their contribution towards society helps to
achieve success. The human capital is measured and managed effectively in terms of
achieving success. I the modern knowledge economy, effective management help to beat the
others and it can be possible with the help of human capital (Nemeth, 2017).
Skills
It has been seen that human skills are the main factor that spread the competitiveness
in the knowledge-based economy. As the organisations move deeper and deeper into the
knowledge-based economy, it requires more human capital to maintain competitiveness. The

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knowledge-based economy depends on the information knowledge and high-level skills of
human capital. The organisation has to maintain high knowledge skills in a knowledge-based
economy that is why; human capital is required (Fitzsimons, 2017).
Factors should be considered by constructing the firm to attract and maintain the
knowledge Workers
Relevant workers
The company has to understand the concept of the subject in order to attract human
capital. Nowadays, workers are increasing who have high knowledge which is beneficial in
terms of growth of the organisation. The company has to aware of this subject because people
are working on it (Hayek, Thomas, Novicevic, & Montalvo, 2016).
Up gradation of technology
Uses of advance technology attract people towards the firm. The human resource of
the company is also attracting the company. It is beneficial for employees as well because it
develops the personality of knowledge workers. Knowledge workers always prefer to develop
their personality.
Time punctuality
Time punctuality is also a technique to develop a personality. It is also a factor that
attracts the knowledge workers towards the firm. It is a factor from which the company will
also achieve success in the future but also build an impressive image in front of others.
Decentralised structure

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The firm has to develop the decentralised structure in which the employees can share the
information with all level of people. It is the best structure because it allows the workers to
understand the concept of every place.
Most relevant factors
Relevant subject, time punctuality and the uses of advanced technology are the factors
that most relevant to the knowledge workers. It is recommended that the organisation has to
attain these factors so that it will achieve high success in the market by beating its
competitors (Gillies, 2017).

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References
Chelladurai, P., Radzi, W. M., & Daud, M. A. K. M. (2017). Organisational structure and
theory of non-profit sports organisations. Understanding Sport Management (pp. 45-
61). Routledge.
Fitzsimons, P. (2017). Human capital theory and education. Encyclopedia of educational
philosophy and theory, 1050-1053.
Gillies, D. (2017). Human capital theory in education. Encyclopedia of educational
philosophy and theory, 1-5.
Hayek, M., Thomas, C. H., Novicevic, M. M., & Montalvo, D. (2016). Contextualizing
human capital theory in a non-Western setting: Testing the pay-for-performance
assumption. Journal of Business Research, 69(2), 928-935.
Maduenyi, S., Oke, A. O., Fadeyi, O., & Ajagbe, A. M. (2015). Impact of Organisational
structure on Organisational performance.
Nemeth, J. (2017). Human capital theory in the framework of organization theory. Strategic
Management, 22(3), 29-35.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill
Education.