Organizational Structure

14.1-1. Coal Mining. CORPORATE STRUCTURE. Most coal companies that operate surface mines had their beginnings as basically one-man organizations, with all decisions and controls in the hands of the founder. At the early stage of the company development, it is usually quite possible for one man to handle all management functions as the mining operations generally are quite localized and the founder can have a first-hand knowledge of all facets of the operation. However, with continued growth, the entrepreneur finds that he must limit himself more and more to the top level of management and delegate the day-to-day operation to others. An organization must be developed that provides not only for current operations but also for continued growth of the company through acquisition of coal reserves in market areas that the company desires to serve. In general, a successful coal company engaged in surface mining must develop an organization consisting of the following departments or divisions: operations, sales, engineering, exploration, land, purchasing, financial, and legal. Of course, all of these departments are not required in the beginning. When the company is small, there is much overlapping of functions. For instance, the operating department will handle purchases and the engineering department will also handle exploration and land functions. A growing surface-mining company has generally evolved through the various stages of development into an organization that is typical of large mining companies. An examination of a typical company and its various departments and their functions should give an insight into the organizational trends of surface mining companies. Having begun as a typical one-man organization, a company of today can be highly centralized, with firm control of all phases of the company's operations in the executive offices. This is achieved by having all department heads (Fig. 14.1-I), as well as the senior management, based in central offices.