How should construction enterprises adjust the control mode and organizational structure?

The group parent company under this control mode is the business decision-making center and production index management center of each subsidiary.

▌ 1.

In the early stage of expansion (annual output value < 10 billion), the middle stage of expansion (annual output value 10-30 billion) and the later stage of expansion (annual output value > 30 billion), although we do not recommend enterprises to mechanically copy the corresponding management and control modes, However, the classification, advantages and disadvantages of these three categories of control modes can be used as a corresponding reference for adjusting their own control modes   two  — From the perspective of organizational structure, different management and control modes correspond to different organizational integrity, and individuals can be effectively motivated to different degrees.

With the rapid development of the industry, countless related enterprises in the industry have sprung up rapidly.

However, from a long-term perspective, a management and control model based on the concept of matching the company’s development stage and conforming to the company’s development direction can provide a continuous development power for the company’s long-term development, so as to effectively motivate employees in the medium and long-term dimension, ensure the sustainability of human resources reserve and ensure the long-term vitality of the organization’s management structure   three  — The management and control mode should be in line with the actual situation of enterprise development.

Over the past decade, the total output value of China’s construction industry has increased from 11.7 trillion in 2011 to 26.4 trillion in 2020, with a compound annual growth rate of 9.4%.

Classified according to the integrity of the organization (from low to high), it can be roughly divided into loose organizations (typical companies: affiliated enterprises), federal organizations (typical companies: internal subcontracting) and tight organizations (typical companies: Huawei, Alibaba and other Internet enterprises), which respectively respond to the complexity of the gradually increasing interest structure.

Generally, the group headquarters does not have a specific business management department, It is applicable to the development of related or single industry.

In the fierce market competition, only those enterprises that make timely and accurate adjustments can withstand the test of the market and seize the first opportunity for development – driven by the leading experience, many number companies of CSCEC system began to gradually strengthen the management ability of the headquarters, strengthen the headquarters and refine the projects, Match the requirements of the market for high-quality operation with the group and standardized management and control mode; After nearly a decade of system reform, many state-owned construction engineering enterprises active in the regional market have strengthened the construction of large project departments and enabled front-line operation capacity.

▌ 1.

Strategic management and control strategic management and control is a relatively centralized management and control mode, which is characterized by “focusing on the big and letting go of the small”.

In the past two decades, panchengde has contacted a large number of customers in the construction industry, from private enterprises with initial scale to local state-owned enterprises during the period of system reform and transformation, from industry-leading professional companies to large central construction enterprises.

However, with the continuous expansion of the overall scale, the overall tightening of the construction market and the centralized blocking of interest points by Party A, the original business model could not match the development needs at that time.

Case 1: the construction of regional branches of the central enterprise number company is like most enterprises with a business scale of more than 30 billion.

The group headquarters is only responsible for the financial and capital operation of subsidiaries, manages and evaluates subsidiaries according to financial indicators, pursues return on investment, structural optimization of investment business portfolio and maximization of company value, and completes the management of subsidiaries through financial control, law and enterprise M & A, Under this control mode, the group headquarters generally does not interfere with the specific operation and management activities of subsidiaries.

The group’s parent company pays attention to the daily business behavior of its subsidiaries, manages the daily business operation of its subsidiaries through the group’s functional management departments, pursues the unity and optimization of the business behavior of each subsidiary, the overall coordinated growth of the company, and the centralized control and management of industry success factors, The daily business activities of subsidiaries are managed through financial control, strategic planning and control, procurement control, sales control and personnel control.

These three management and control modes roughly correspond to the common management and control modes in the three different development stages of construction engineering enterprises at present.

In essence, the stronger the integrity of the organization, the higher the complexity of its interest structure, the less clear the corresponding interest link, and the lower the degree to which individuals are encouraged.

Among the 113000 construction engineering enterprises, we witnessed that CSCEC, the leading central enterprise, exceeded trillion in revenue in 2018, witnessed that private enterprises such as Zhongtian construction fought everywhere in the capital market, and also witnessed the bitter exit of countless enterprises.

Panchengde has witnessed various forms of organizational management and control modes, And the adjustments made by different types of enterprises at different stages of development.

After the business scale and organizational scale of the central enterprise number company have expanded to a certain stage, it has encountered the ceiling brought by the original control mode and organizational structure – the number company in the past decade or more, Relying on the operation and performance mode of large project department system, it has achieved good development advantages and is relatively in line with the company scale and market demand at that time.

Operation control operation control is a highly centralized control mode.

▌ 3.

In order to ensure that the group’s decisions can be implemented in time and solve various problems, The functional departments of the headquarters are relatively complete and the scale of functional personnel is relatively large, which is suitable for the operation in a single industrial field.

On the surface, the management and control strength, management precision (organizational precision) and incentive to individuals are more or less negatively correlated in nature, that is, the company’s management and control strength has a natural opposition to the amount of benefit distribution.

Financial control financial control is a control mode that tends to be decentralized.

Under this control mode, the group parent company requires that the major decisions of subsidiaries must be agreed with other interested departments of the parent company.

▌ 2.

The group’s parent company mainly focuses on the important work of the whole group, such as strategic planning, leadership construction and performance appraisal, manages and evaluates with strategic planning, and pursues the coordinated development of the company’s portfolio, strategic optimization and coordination of investment business The cultivation of strategic synergy completes the management of subsidiaries through financial control, strategic planning and control and human resources.

Flat Feed Anchor

The group headquarters generally has no business management department, which is suitable for the investment operation of a variety of unrelated industries.

Accordingly, Its influence on individual incentive is also gradually decreasing.

Then, the company gradually began to dismantle the previous organization under the large-scale project system with the project manager as the management core at the beginning of the 13th five year plan in 2015, and according to its business layout, A total of eight different regional branches have been set up throughout the country, and the headquarters construction has been strengthened, forming a top-down management mode with a total of 3-4 management levels..

In addition, to a certain extent, the choice of control mode will also greatly affect the choice of organization form design.

In this decade of reform, we have seen the growth of enterprise scale, as well as the drastic changes in its organizational structure and control mode.

It can be said that finding the management and control mode and organizational structure setting in line with the current development stage and business scale of the enterprise is a necessary condition for an invincible position in the treacherous construction market competition   one  — From the perspective of enterprise development stage, the management and control modes of the three organizations often match their development stage, which can be roughly divided into three categories: financial management and control, strategic management and control and operation management and control.

There is no right or wrong in the management and control mode of construction enterprises at all levels of organizations, only the difference between “suitable” and “unsuitable”.

The past decade has witnessed the rapid development of China’s construction industry, and countless construction related enterprises have soared in the east wind of the industry.


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