Formalization as a Way of Coordination and Control in a Construction Firm

The Construction Industry is characterized by intensive use of labour, low use of technology, many disciplines and participants involved; all these factors make the environment very uncertain. Uncertainty increases the amount of information to be processed and, in many occasions, overwhelms the firm’s capacity to process information. A way to reduce the amount of information to be processed is Formalization that represents the rules in the organization to obtain standardized behaviour. Our study on this paper is focused in the importance of formalization. This is a characteristic of the organizational structure of a firm, and can be used as a way of controlling and managing information. We stand that organizational design is a determining factor in the success of the implementation of new management philosophies. In particular, we study the case of a Large Peruvian Construction Firm, GyM, which is seen as a local benchmark of productivity and quality, being that in the last decade lean concepts have been implemented in its projects.