Chapter 2. Project Organization – Construction Project Management: Theory and Practice

2

Project Organization

Introduction, construction company, forms of business organization, structure of construction organization, organizing for project management, management levels, traits of a project manager, important traits of a project coordinator, ethical conduct for engineers, factors behind the success of a construction organization

2.1 INTRODUCTION

According to an estimate, the Indian construction industry comprises nearly 200 firms in the corporate sector and about 120,000 class ‘A’ contractors registered with different government construction bodies. In addition to these, there are numerous small contractors including individuals who execute small jobs including repairing and maintenance. They are working mainly as subcontractors to the large contractors.

Besides large companies employing millions of workers, there are equally large numbers of self-employed individuals engaged in the actual construction work and allied activities, like whitewashing, painting, plumbing and fixing of mechanical or electrical fixtures.

While the corporate companies work in an organized fashion, most of the works of small companies are done in an unorganized manner. The construction industry was accorded Industrial Concern Status under the Industrial Development Bank of India (Amendment) Act very recently. Since the volume of construction works in the hands of corporate groups is minuscule when compared to the large chunk of construction being controlled by small companies or individuals, we can safely conclude that the Indian construction industry is still to assume the status of an organized industry. In this chapter, the various forms of organization and their structure, different management levels in a construction organization and other issues are discussed.

2.2 CONSTRUCTION COMPANY

According to Tenah (1986), a construction company can be defined as a group of people sharing specialized knowledge to design, estimate, bid, procure/purchase, and obtain resources to complete a construction project. Thus, the construction company, whether it involves a one-person organization or a larger firm with several departments, is primarily devoted to giving service with the aim of making profit.

In general, the common functions of a construction company are general administration, estimating, managing contracts and personnel, design, engineering, purchasing/procurement, accounting, and managing field construction. The organization of a construction company is the conceptual framework of the resources that carries out the above-mentioned functions. These functions are not limited to areas within the construction organization itself, but include the interwoven relationships with other stakeholders as well. The stakeholders could be architects, engineers, other general contractors, subcontractors, manufacturers, material suppliers or vendors, equipment distributors, labour, government agencies and the general public.

The broad aim of an organization is twofold—to divide responsibility according to the technical knowledge and to divide that responsibility by degrees of executive ability. The extent to which authority, work, or responsibility is delegated (the entrusting of authority and responsibility) is, therefore, an important feature of any organization. For the purpose of the upcoming discussion, we follow the definitions given by Kerzner (2004) for authority, responsibility and accountability.

Authority is the power granted to individuals (possibly by their positions) so that they can make final decisions for others to follow.

Responsibility is the obligation incurred by individuals in their roles in the formal organization in order to effectively perform assignments.

Accountability is the state of being totally answerable for the satisfactory completion of a specific assignment.

2.3 FORMS OF BUSINESS ORGANIZATION

A construction organization can take any of the following forms of business organization.

2.3.1 Sole Proprietorship

This kind of organization is owned by a single person. The owner is licensed with the government. This form of organization is widely used in service industries. No formal charter of operation is required in such arrangements. Also, there are few government regulations to which such organizations are subjected. Such organizations do not have to pay corporate income taxes and their earnings are subject to personal income tax. The proprietor of such organizations has unlimited personal liability for debts and they also find it difficult to obtain a large sum of money for the business. The organization lasts as long as the proprietor lasts.

2.3.2 Partnership

When two or more persons associate to conduct business, a partnership is said to exist. This ranges from informal oral understandings to a formal agreement filed with the respective ministry/body. Similar to proprietorship, in partnership there is ease and economy of formation as well as freedom from special government regulations. The profits generated out of the business are taxed as personal income tax in proportion to the partners’ claims, whether they are distributed or not. In the event that a new partner joins the business, the old partnership ceases and a new one is created. In case of dissolution due to disputes, the distribution of assets can be made based on the agreement formulated while forming the partnership organization. The major disadvantage in such organization is that of impermanence, the difficulty faced in transferring ownership, and the unlimited liability.

2.3.3 Corporation

A corporation is an artificial being, invisible, intangible and existing only in contemplation of the law (Marshall 1819, available at http://www.1700s.com). Being a mere creation of the law, it possesses only those properties that the charter of its creation confers upon it either expressly or as incidental to its very existence. It exists as a separate legal entity and apart from its owners. Consequently, owner’s liability is limited to his or her investment. Also, the capital required for business can be raised in the name of the corporation, without exposing owners to unlimited liability. The ownership is evidenced by shares of stocks that are transferable, and so is the ownership. Thus the organization continues to exist even if the owner dies or sells his stock. One of the major disadvantages of such organizations is the double taxation that they are subjected to. While company pays tax on the income it earns, the stockholders are also taxed when they receive income in the form of dividend.

2.3.4 Limited Liability Company (LLC)

This form of organization is the combination of corporation and partnership. It provides its owners with corporate-style limited liability and the tax treatment of a partnership. This is well suited for small- and medium-sized firms. It has a few restrictions and greater flexibility. This form of organization has unlimited life. Complete transfer of ownership and interest is usually subject to approval of at least a majority of the other LLC members.

2.3.5 Private Limited Company

It is a type of incorporated firm that (like a public firm) offers limited liability to its shareholders but which (unlike a public firm) places certain restrictions on its ownership. These restrictions are spelled out in the firm’s ‘articles of association’ or bylaws, and are meant to prevent any hostile takeover attempt. The major restrictions are:

  • Stockholders (shareholders) cannot sell or transfer their share without offering them first to the other stockholders (shareholders) for purchase.
  • Stockholders cannot offer their shares or debentures to the general public over a stock exchange.
  • The number of stockholders cannot exceed a fixed figure (commonly 50).

More details can be found in Company Act.

2.3.6 Public Limited Company

Public limited company is an incorporated, limited liability firm whose securities or shares are traded on a stock exchange (national, regional and international) and can be bought and sold by anyone. Public limited companies are strictly regulated and are required by law to publish their complete and true financial position so that investors can determine the true worth of its stock (shares). It is also referred to as publicly held company. For more details, readers may refer to the Companies Act, 1956, and Business Dictionary Online.

2.3.7 Government Enterprises

A government-owned corporation, a state-owned enterprise, or a government business enterprise is a legal entity created by a government to undertake commercial or business activities on behalf of an owner government. The defining characteristics are that they have a distinct legal form and they are established to operate in commercial affairs. While they may also have public-policy objectives, government companies should be differentiated from other forms of government corporation or entity established to pursue purely non-financial objectives that have no need or goal of satisfying shareholders with return on their investment through price increase or dividends. In India, PSU is a term used to refer to companies in which the government (union/state) owns a majority (51 per cent or more) of company equity.

2.3.8 Joint Ventures

According to Shreshtha (Shreshtha 1993, cited in Ogunlana et al. 2003), construction joint ventures combine certain attributes of one venture with complementary features of another, for the purpose of engaging in a specific individual or multiple construction undertakings either as a one-team project or on long-term basis. The enterprise is co-owned and co-managed by the JV partners. Joint ventures between contractors from developed and developing countries are recognized mechanisms for technology transfer and, therefore, one way of improving the skills that are lacking (Ofori 1994). In the construction industry, creation of joint ventures may mostly result from complementary needs of technology, capital management and human resource. A number of JVs operated in the construction of Delhi Metro. Another variant of joint venture is unincorporated joint venture, in which the legal means of dividing the project’s equity is by shareholdings in a company.

2.4 STRUCTURE OF CONSTRUCTION ORGANIZATION

The organizational structure is about how to use one of the basic resources, people, and how to facilitate overcoming the communication barriers at organizational interfaces (Enshassi 1997). It refers to the organizational and administrative patterns. For example, the organizational structure indicates the arrangement of different departments and the division of labour. The arrangement has a bearing on the response time for delivering decisions.

It is rare for two construction companies to have an exactly similar kind of organization structure. In fact, it is often jokingly said that there are as many organization structures as there are construction companies. Even for the same construction company, the organization structure may not remain same over a long period of time. The organization structure keeps on evolving and it depends on a number of factors such as technology, complexity, resource availability, products and services, competition and decision-making requirements (Kerzner 2004).

Most of today’s large construction companies had a modest beginning in terms of undertaking small construction activities. Some of them started as subcontractors or petty contractors. During the initial days, these companies were able to get relatively simple construction assignments with little or no complications, and were basically labour-intensive. Such assignments were executed with the direct involvement of owner, with the help of managers/supervisors. These managers/supervisors were directly overseeing the works carried out by their subordinates. One such arrangement is shown in Figure 2.1. The communication follows vertically in such an arrangement. For example, owner will command manager/supervisor, who in turn will command the foremen 1, 2 and 3. The foreman, in turn, will command workers directly under them. For example, Foreman 1 will command workers 1 and 2, Foreman 2 will command workers 3 and 4, and so on. There is negligible horizontal flow of communication. For example, Foreman 1 will neither receive any instruction nor issue any command to Foreman 2. This type, in which the line of authority is direct from one level to another level of hierarchy, is similar to the military or line organization.

Figure 2.1 Military- or line-type organization

Such military- or line-type organizations have the following advantages and disadvantages:

Advantages:

  • These are the easiest to establish.
  • They are one of the simplest to explain to employees.
  • In this structure, there is a unity of control.
  • There is a strong sense of discipline.
  • Each of the employees is assigned a fixed role and responsibility.
  • Decisions can be quickly taken and the organization can adjust to changing needs in no time.

Disadvantages:

  • There is a lot of expectation from the person holding the authority. The efficiency of the structure is heavily dependent on the person in authority.
  • The advice of a smart employee at the bottom of the hierarchy may go unheeded, as there is no communication from an employee belonging to a lower hierarchy.
  • The structure suffers from lack of specialized skill of experts. For example, Foreman 1 may not be skilled in all aspects of work; yet, he is supposed to give guidance to workers 1 and 2 under him. Also, there may be chances of favouritism creeping in such a structure.

When the construction companies started getting relatively bigger projects, the owners realized that they would not be able to handle such projects with the traditional line- or military-type organization. The owners felt the need to consult specialists on occasions. Thus, there were additions of people with staff responsibilities, and that led to the ‘line and staff’ type of organization, as shown in Figure 2.2. The staff specialists advise the line managers in performing their duties. These staff positions are purely advisory. The staff personnel can recommend but they do not have authority to implement those recommendations. For example, manager-safety plays the role of staff in Figure 2.2. In practice, it is very difficult to make a distinction between staff and line departments. For making such distinction, just pose this simple question: Is the person or department directly contributing to the achievement of the company’s overall objectives? If the answer is ‘yes’, then the concerned person or the department is performing line function; else, it is performing staff function.

Some of the advantages and disadvantages of line and staff organizations are listed below:

Advantages:

  • In the line and staff structure, line employees are responsible for execution while staff employees play the advisory role.

    Figure 2.2 Line and staff organization

  • The line and staff structure offers ample opportunity for the growth of employees. It also offers good training opportunity to the employees.
  • The quality of decisions arrived at in a problem situation is high, as careful thought is given to arriving at the decision.

Disadvantages:

  • There is a lack of well-defined authority structure.
  • The structure is suitable mostly for large organizations where there is constant need for employing people with specialized skills.
  • There is always a possibility of conflict arising out of various reasons, which may prove to be detrimental for the growth of the company.
  • The distinction between line function and staff function is difficult to make.

With the increase in size and complexity of projects, the line and staff type of organization fails to deliver. This is because line and staff organization tends to load a few men at the top of the hierarchy with more duties than they can handle efficiently. This eventually gave rise to adoption of the departmental organization. One typical departmental organization is shown in Figure 2.3. The departmental or functional organization has departments with department heads. The department heads have control of the functions allocated to them and they are free to communicate directly with the field forces. In this organization structure, the top-hierarchy people are relieved from much of the heavy burden. The structure combines the best of the military- or line-type structure and the ‘line and staff’ structure. It also leaves functional managers in direct charge of the work and ensures them the support of a highly trained technical staff.

Figure 2.3 Departmental organization, authority, communication and contact (adapted from Tenah 1986)

2.4.1 Centralized Functional

In this form, the centre of power is concentrated at the top of the organization. The departments are arranged by important functions, each headed by a manager who reports to a chief executive officer. The chief executive officer coordinates the activities of functional departments.

The advantages of the centralized functional structure (Thomas et al. 1983) are given below:

  • It has a simple reporting mechanism and, thus, administration is easier.
  • Functions are organized logically and in a cost-effective manner.
  • Power and prestige of major functions are maintained, and strategic direction-setting is easier to attain.
  • Duplication of efforts is minimized.
  • Tight control at the top can be ensured.

The disadvantages (Thomas et al. 1983) are:

  • The over-specialization and narrow vision of key personnel are problematic.
  • There is a possibility of limited development for project managers.
  • There may be difficulty in achieving economic growth if the firm attempts to diversify, as the functional management may not be quick to react.
  • The lack of coordination between functional departments may be a problem area. This increases the burden on the chief executive officer. As the number of functional departments increases, the burden also increases.

2.4.2 Decentralized Multidivisional

In this arrangement, the departments are separated on the basis of the project market or region. Each unit is relatively self-contained in that it has the resources to operate independently of other divisions. The division manager has almost total authority to establish division strategy and to manage internal operation. It is like dividing a company into a number of smaller companies, except that each division manager is generally subject to some degree of evaluation and control by the central corporate office.

The advantages of the decentralized multidivisional structure (Thomas et al. 1983) are given below:

  • The decision-making is quicker and simpler. The various divisions can take advantage of their own functional organization.
  • The divisional focus is on the end result rather than the work required to produce the end result. The management can react to changing business conditions quickly and adapt to it.
  • The output and responsibility can be easily identified.
  • In this arrangement, each of the divisions can be operated as a profit centre.
  • Corporate executives can be removed from the operating details to concentrate on overall corporate matters and long-range planning.
  • Motivation and development prospects of project managers are enhanced, and there is greater likelihood of innovation and creativity.

The disadvantages (Thomas et al. 1983) are:

  • The increased number of managerial and functional people may be unnecessary and may not prove to be cost-effective.
  • The divisions may have little real incentive to cooperate with other divisions and, as such, lack of coordination among different divisions may be an issue.
  • Coordination of customer relations and research-and-development activities may be difficult because of divisional autonomy.

Owing to its various disadvantages, the departmental organization is now giving way to the matrix organization. In the matrix organization, as we shall see later, the normal vertical hierarchy is overlaid by some form of lateral authority and communication. This, in turn, allows maximum efficiency in the utilization of resources as opposed to the departmental organization.

One of the distinct features of the matrix organization is that a dual rather than a single chain of command is followed. For example, some of the managers under matrix structure may report to two superiors instead of a single superior.

There are two alternatives through which a construction company can create a matrix organization. In the first alternative, the company can abandon the departmental groupings and adopt a structure solely on a project basis. In the second alternative, it can overlap construction/project management on top of the existing departmental organization. Most of the construction companies follow the second alternative. The details of organizing for construction/project management are discussed in the next section.

2.5 ORGANIZING FOR PROJECT MANAGEMENT

One of the primary functions of a construction company is to execute construction projects. This function is performed by companies following different organizational structures at project level. The organization at project level and at corporate level is not the same. Construction companies follow different organizational forms at project level. It is not an easy task to integrate the project management structure into a corporate structure. The inherent challenge here is to organize people from different specializations and different departments into an effective project team. The challenge gets further compounded when a number of different organizations with different objectives are involved in the project. Depending on the extent to which the authority is delegated to a project manager and the mode in which the power is delegated, the project management structure can be divided into categories such as—(1) functional, (2) matrix, and (3) project forms of organization. While in the first form the project manager has virtually nil authority, in the third form complete authority is vested with the project manager. The matrix method is a compromise between the two extremes.

The factors that are important for choosing a particular project-management authority structure, as identified by Thomas et al. (1983), are—(1) project size and duration; (2) organizational experience; (3) resources; (4) difference; (5) importance; (6) technology uncertainty; (7) financial uncertainty; (8) number of projects; and (9) cost and schedule control. The three most frequently used organizational forms for managing construction projects are—classical or functional, pure project, and matrix.

2.5.1 Classical (Functional)

Traditionally, classical or functional organizations are marked by a vertical structure with long lines of communication and a long chain of command. A typical functional organization is shown in Figure 2.4. In this form, each employee has one clear superior. For example, the general manager is reporting to the owner, the senior project manager is reporting to the general manager, and so on.

The employees are grouped by speciality—for example, human resources development, construction, engineering, tendering, finance, and so on. Each of these speciality groups works under one executive. The groups are further subdivided into sections. For example, engineering can be subdivided into civil, electrical and mechanical sections. Sections under other groups are not shown for clarity in diagram.

Figure 2.4 Functional organization

In a functional organization, project-related issues are resolved by the functional head. For example, construction-related issues would be sorted out by senior manager, construction. The functional organization structure assumes that the common bond supposed to be there between an employee and his superior would enhance the cooperation and effectiveness of the individual and the group (Enshassi 1997).

Some of the advantages of functional organizations are:

  • The degree of efficiency is high since the employees have to perform a limited number of activities.
  • There is a greater division of labour and, thus, the advantages of functional organizations are inherent in this structure.
  • The specialized groups can enhance the possibility of mass production.

Some of the disadvantages are:

  • The structure as such is unstable as it lacks disciplinary control.
  • The structure is slightly complicated as it has several layers of sections.
  • The responsibility for unsatisfactory results may be difficult to fix under such structure.
  • There may be conflict among employees of equal rank.

In recent years, efforts have been made to reshape functional organizations having long lines of communication, by incorporating a horizontal structure with the aim of creating a shorter line of command. Such horizontally structured organizations are seen to be more flexible and able to quickly and effectively adapt to a changed environment.

2.5.2 Pure Project or Product Management

Pure project or product organizations can be formed to support a steady flow of ongoing projects. One such typical pure project organization is shown in Figure 2.5. In a project organization, employees are grouped by project. The majority of the organization’s resources is directed towards successful completion of projects. The project managers enjoy a great deal of independence and authority. In such structures, the different organizational units called departments either report directly to the project manager or provide supporting roles to the projects.

Figure 2.5 Project organization

The advantages of pure project organizations are:

  • The project manager maintains complete authority over the project and has maximum control over the project.
  • The lines of communication are strong and open, and the system is highly flexible and capable of rapid reaction times. Thus, the structure can react quickly to the special and changing project needs.
  • The project is the only real concern of the project employees. The pure project structure provides a unity of purpose in terms of effectiveness. It brings together all the administrative, technical and support personnel needed to bring a project from the early stages of development through to operational use.
  • The appraisal of employees is based upon the performance of the project.
  • The focus of resources is towards the achievement of organization goals rather than the provision of a particular function.

The disadvantages are:

  • There could be a duplication of efforts.
  • It is very difficult to find a project manager having both general management expertise and diverse functional expertise.
  • The administrative duties of a project manager may be demanding and the job could be quite stressful.
  • Due to the fear of impediments in career growth, some employees may not prefer to leave their departments.

The pure project or product organizations are unusual in the construction industry (Newcombe et al. 1990, cited in Uher and Toakley 1999). In order to address some of the disadvantages of the pure project structure, ‘partial projectization’ has been used in some cases. Here, the critical functions such as engineering and construction are assigned to the project manager, while functions such as procurement and accounting are performed within the functional departments.

The advantages of such partial projectization are:

  • The project manager can spend more time directing the project-related activities of the major functional group.
  • The project manager need not be an expert in all functional areas, as is the case with the pure project structure.

The disadvantages are:

  • The project manager would still be under significant administrative burden despite some of the functions being carried out by the functional departments.

2.5.3 Matrix Organizations

The matrix organizations have evolved from the classical functional model. They combine the advantages of both the classical and the pure project/product structures. A matrix organization can take on a wide variety of specific forms, depending on which of the two extremes (functional or pure project) it most resembles.

In the matrix organization, the human resources are drawn from within various functional departments to form specific project teams. Every functional department has a pool of specialists. For example, the plant and machinery functional department may have the experts P1, P2, P3, P4, and so on. Similarly, the safety department may have experts S1, S2, S3, S4, and so on. When the project team for executing a project X is organized, the experts from different functional departments join together under the leadership of a project manager. For example, P1 and S1 may represent plant and machinery department and safety department, respectively. Similarly, depending on the requirement, personnel from different functional departments may join the project manager. The functional representatives such as P1 and S1 are referred to as the project engineers. On completion of projects, the project engineers return to their functional units within the vertical organization structure.

The matrix organization recognizes the dynamic nature of a project and allows for the changing requirements. Such structures can cater to the varying workload and expertise demanded by the project. For example, if at any stage it is found that the services rendered by P1 are inadequate and needs strengthening in the form of more persons, the project manager can request the functional head of plant and machinery department to send a few more persons such as P2, P3, and so on. Similarly, during less workload the project manager can request for demobilization of these project engineers. The project engineers P1, P2, P3, and so on usually contact their parent functional departments for getting advice on complex technical matters or when they encounter unusual problems. Otherwise, for all practical purposes the project engineers are under the control of the project manager. One of the features of the matrix organization is that the knowledge gained by the project engineers P1, P2, and others while executing projects can be shared vertically upwards for the benefit of future projects.

One typical matrix organization is shown in Figure 2.6. As mentioned earlier, the project manager heads a team of personnel sent in by their respective functional specialist departments. The role of project manager is that of a coordinator with considerable authority. While the main advantages are in the shorter and shared lines of command and communication, there is the potential of conflicts arising from dual lines of authority and dual reporting.

The advantages and disadvantages identified by Thomas et al. (1983) are given below.

Advantages of the matrix structure are:

  • The structure facilitates quick response to changes, conflicts and project needs.
  • There is a flexibility of establishing independent policies and procedures for each project, provided that they do not contradict company policies and procedures.
  • There is a possibility of achieving better balance between time, cost and performance than is possible with the other structures such as functional or project forms.

    Figure 2.6 Typical matrix organization

  • The project manager has authority to commit company resources provided the schedule does not cause conflicts with other projects.
  • The strong base of technical expertise is maintained.

The disadvantages are:

  • Successful matrix authority application tends to take years to develop, especially if the company has never used dual authority relationships before.
  • Initially, more effort and time is needed to define policies, procedures, responsibilities and authority relationships.
  • The balance of power between functional and project authority must be carefully monitored.
  • Functional managers may be biased according to their own set of priorities.
  • Reaction times in a fast-changing project are not as fast as in the pure project authority structure.

The matrix organization can be further expanded into three different forms:

  1. Functional matrix: A person is formally designated to oversee the project across different functions. This person has limited authority over the functional people involved, and primarily plans and coordinates the project. The functional managers retain prime responsibility for their specific segments of the project.
  2. Balanced matrix: A person is assigned to oversee the project and interacts on an equal basis with functional managers. This person and the functional managers jointly plan and direct workflow segments and approve technical and operations decisions.
  3. Project matrix: A manager is assigned to plan, direct and oversee the project, and is responsible for the completion of the project. The functional managers’ involvement is limited to assigning personnel as needed and providing advisory expertise.

A number of criticisms were levelled against matrix organizations in the 1980s. In fact, some companies reportedly dropped the use of matrix structure. Poirot (1991) recommended the following points for successful implementation of the matrix organization:

  • Allowing time to define responsibilities and authorities
  • Committing senior management time to explain the system
  • Developing people who want the matrix to work
  • Making decisions based on what is good for the client and the firm
  • Promoting open communication with no secrets
  • Eliminating politics and resolving conflicts at high levels
  • Committing energy to evaluate and compensate on a common basis
  • Using consensus management. Although it may take time and energy to do this, in the long run it is better since decisions taken by consensus require little time for implementation
  • Hiring top-quality people having integrity and willingness to place the interests of the client, the firm and other people before their own interests
  • Consolidating net income at corporate level and rewarding everyone in the firm
2.6 MANAGEMENT LEVELS

Management level can be defined as ‘a position in management that is stratifiably (layer or level) differentiable (degree) in terms of power, authority, responsibility, and accountability over resources required to achieve defined objective(s).’ Tenah (1986) identifies five management levels—(a) the board of directors’ level; (b) the president’s level; (c) the construction management level; (d) the project management level; and (e) the functional management level. The levels are discussed with respect to a typical construction organization.

2.6.1 Director Level

The different functions at this level are:

  • setting plans,
  • formulating objectives, and
  • deciding among different courses of action.

The three basic types of information required at this level to perform the above functions are:

  • environmental information,
  • competitive information, and
  • the company’s financial status and general performance data.

The various positions in Director level and their hierarchies are given in Figure 2.7.

Figure 2.7 Positions in director level

2.6.2 President Level

The primary functions at this level are acquiring business and formulating the company’s immediate objective, in line with the board’s plans and strategies. This level requires a much more detailed and departmentalized format of the environmental, competitive and internal information. It also requires progress reports that summarize, for each project, its status, current and future cost and schedule performance, and problems, with management actions underway to resolve them. The various positions in President level and their hierarchies are given in Figure 2.8.

Figure 2.8 Positions in presidents level

2.6.3 Construction Management Level

The major functions at this level are—obtaining and monitoring work for the company at the district or divisional level. This level requires summary formats of the three basic types of information (environmental, competitive and internal) that apply to the geographic areas. In addition, this level requires a clear and straightforward summary format of information on general progress, financial status, schedule status, procurement status and engineering status on each project under their jurisdiction. The various positions in Construction Management level and their hierarchies are given in Figure 2.9.

Figure 2.9 Positions in construction management level

2.6.4 Project Management Level

The major functions of the project management level are:

  • managing the day-to-day operations of all aspects of a project, and
  • watching closely the development of the project as a group.

The information needs of this level are the same as those of the construction management level, backed up with the following details—(a) field costs, (b) summary and/or detail construction schedules, (c) list of critical or near-critical items in the network, (d) detailed prediction of future accomplishments, (e) current working estimates, and (f) cash-flow summaries. The various positions in Project Management level and their hierarchies are given in Figure 2.10.

Figure 2.10 Positions in project management level

2.6.5 Functional Management Level

The functional management level directly organizes, supervises and coordinates the workers, materials, equipment and services, to ensure that the project is built within the required time, budget and safety and quality standards. All data are collected at these levels to be used for costing, estimating and scheduling purposes. The functional management level requires performance and productivity information on the organizational units that each manager or supervisor handles, as well as detailed analyses of the problem areas. The various positions in Functional Management level and their hierarchies are given in Figure 2.11.

Figure 2.11 Positions in functional management level

2.7 TRAITS OF A PROJECT MANAGER

Project manager is a person formally appointed to manage a project with specific accountability for achieving defined project objectives with allocated resources. A project manager has access to, and a formally defined relationship with, the project leader to whom the specific project has been assigned (www.tbs-sct.gc.ca). Role of a project manager is very critical to the success of a project and recognizing this, a number of studies have been conducted to find the required traits of a project manager.

The terms ‘project manager’, ‘project coordinator’, ‘construction manager’, ‘project administrator’ and ‘project controller’ are used quite interchangeably, and all of them appear to have very similar kinds of role, but the intensity of their job requirement and the expectations from them vary (Kerzner 2004). For example, the typical responsibilities of a project manager and a project coordinator include—coordinating and integrating of subsystem tasks; assisting in determining technical and manpower requirements, schedules and budgets; and measuring and analysing project performance regarding technical progress, schedules and budgets. However, a project manager is supposed to play a stronger role in project planning and controlling. A project manager is also responsible for negotiating; developing bid proposal; establishing project organization and staffing; and providing overall leadership to the project team, in addition to profit generation and new business development. A project coordinator is seldom entrusted with these responsibilities. In fact, the project coordinator’s role is to augment the project managers’ visibility for larger projects (Forsberg et al. 1996). A project coordinator is chartered as a representative of the project manager who proactively ensures future events will occur as planned. They signal problem areas and recommend solutions. According to Forsberg et al. (1996), a project coordinator’s function is to:

  • know how the organization ‘works’;
  • provide expediting help to the project and support organizations;
  • provide independent assessment of project information and status to the project manager;
  • ensure planning and milestones are satisfied; and
  • ensure control procedures are being adhered to.

Katz and Kahn (1978) have suggested that an effective project manager should possess essentially three skills—technical skills, human relationships skills and conceptual skills. While technical skills include the ability to apply knowledge in a given field, such as engineering and finance, human relationships skills involve the ability to communicate efficiently and to maintain a harmonious working group. The ability to motivate employees also falls in the category of human relationships skills. Finally, conceptual skills include the ability to perceive the project as a system by keeping a global perspective and not thinking of only one aspect at once.

The above model has led to a number of debates on the extent to which a project manager needs technical skills. While it is understandable to have a technical expert as a project manager in case of a small project that involves knowledge of only one small specialist area, for larger projects involving multiple disciplines, searching for a technical expert may not be a wise option (Goodwin 1993). This is not to say that technical skills are not needed at all in larger projects, but the emphasis should be more on managerial skills of a project manager. Technical skills in larger projects are needed to appreciate the full implications of the project, which a project manager obtains as expert advice on ‘as and when’ basis. Some researchers are also of the opinion that project manager should not be a technical expert due to the apprehension that the project manager would engage himself in too much technical details and may not be able to do justice to other aspects of the project (Katz 1974, Goodwin 1993, Kerzner 2002).

El-Sabaa (2001) has analysed the relative importance of the three skill groups advocated by Katz and Kahn. Human skill with a percentile score of 85.30 has emerged to be the most essential project manager skill. Conceptual and organizational skill with a percentile score of 79.60 represents a second essential project manager skill. Technical skill with a percentile score of 50.46 has emerged as the least essential project manager skill relatively.

Odusami (2002) concludes through the analysis of a questionnaire survey conducted among clients, consultants and contractors that for a client the most important skill of an effective project leader is decision-making; for a consultant, the most important skill is leadership and motivation, and for the contractors, communication is the most important skill. Laufer et al. (1999) opine that the project manager’s principal role is to manage his/her team’s decision-making and not to make his own decisions.

It is advisable to appoint the project manager as early as possible, preferably in the feasibility stage itself, so that he is aware of all the aspects of the project and can take control of the project. However, the early appointment may not be possible in all situations.

The project manager should be responsible for coordinating all project activities; making project recommendations; fixing a design and preparing drawings and specifications for tender and construction; preparing all estimates; and administering all contracts and issuing certificates.

Various researchers have stressed the need for different types of skills required by a project manager in order to make the project successful. Their findings are either based on their experiences or based on empirical researches. Amongst the first category, we have the skills suggested by Stuckenbruck (1976), Kerzner (2002), Fryer (1979), and Adams and Barndt (1978). The details of these suggested skills are presented below from the works of Gaddis (1959), Katz and Kahn (1978), Stuckenbruck (1976), Adams and Barndt (1978), Fryer (1979) cited in Odusami (2002), Anderson (1992), Project Management Body of Knowledge (2001), and Kerzner (2002).

  • Human skills: These include mobilization, communication, coping with situations, delegation of authority, political sensitivity, high self-esteem and enthusiasm. He should have the capability to motivate and integrate his team members to achieve goals for the projects.
  • Conceptual skills: These include planning, organizing, having strong goal orientation, ability to see the project as a whole, ability to visualize the relationship of the individual project to the industry and the community, and strong problem orientation.
  • Technical skills: These include specialized knowledge in the use of tools and techniques, project knowledge, understanding methods, process and procedures, understanding the technology required, and skill in the use of computer. He should have necessary knowledge of tools and techniques used in engineering and construction processes. He should be able to understand the technology trends and their evolution. He should also have skills to synchronize different technologies. He should have expertise connected with product and process used in the project.
  • Attitude: This refers to an open, positive and ‘can do’ attitude, which encourages communication and motivation, and fosters cooperation.
  • Common sense: This refers to a strong ability to spot sensible, effective, straightforward, least risky and least complex solutions—i.e., 90 per cent right on time is better than 100 per cent far too late!
  • Open-mindedness: This refers to an approach where one is always open to new ideas, practices and methods, and in particular, gives equal weight to the various professional disciplines involved in the project.
  • Adaptability: This refers to a propensity to be flexible where necessary and avoid rigid patterns of thinking or behaviour, and to adapt to the requirements of the project, the needs of the sponsors, its environment and people working on it. He should be able to adapt to change. He should be able to manage the changes and, in the process, recognize the opportunities.
  • Inventiveness: This refers to an ability to discover innovative strategies and solutions either from within oneself or through interaction with other members of the project team, and to identify ways of working with disparate resources to achieve the project objectives.
  • Prudent risk-taker: This refers to a willingness and ability to identify and understand risks but not to take a risky approach in an unwise or reckless fashion.
  • Fairness: This refers to a fair and open attitude, which respects all human values.
  • Commitment: This refers to a very strong overriding commitment to the project’s success, user satisfaction and team coordination.
  • Conflict resolution: The project manager should be able to resolve conflicts arising among his team members.
  • Project manager needs solid basic experience in the relevant field. He should be multidiscipline-oriented. He should also be global-problem-oriented, i.e., he must consider the external, political, legal and environmental aspects.
  • Project manager should have leadership skills. He should be a clear leader and director with sufficient authority. He should have the capability to elicit commitment from his team members. He should be able to identify and solve the problem, and be able to balance technical, economics and human factors. He should also have the spirit of entrepreneurship.
  • The project manager should master the basics of planning, budgeting, coordinating and assessing financial reports, and following up.
  • A good manager and administrator, he should have the knowledge and understanding of estimating systems, cost control, scheduling control, quality and safety. He should be able to develop procedures and be able to implement them.
  • He should be an effective problem solver and decision maker. He should possess good analytical abilities and should be proficient in the social skills.
  • Effective communication skill is identified as one of the most important skills for a project manager. Other researchers such as Goodwin (1993) have also stressed the importance of verbal and written communication skills. The project manager should have the requisite interpersonal and negotiating skills.
  • The project manager should have the right temperament, and should be able to keep his calm. He should be realistic, dedicated, generous, stable, quick-thinking, disciplined and persistent.
  • The project manager should be creative in dealing with information and problems. Information processing skill allows the manager to obtain, use and disseminate information.

Among the various literature cited above, the empirical research has been by Spitz (1982). She concluded that the priority of skills of a project manager vary depending on the phase in which the project presently exists. She has also tried to assess the skill needed in each of the phase of a project.

 

Table 2.1 Glossary of project coordinator’s traits (Katz 1974, Pettersen 1991, Goodwin 1993, Kerzner 2002, El-Sabaa 2001)

Description of Traits Definition

Team-building skills

 

1. Concern for conciliation

The act of placating and overcoming distrust and animosity

2. Concern for other’s ego

Not to remain self-centred; respect other’s individuality; regard for other’s interest, power and happiness

3. Understanding of human psychology

Understanding the science of the human soul, specifically the systematic or scientific knowledge of the powers and function of the human soul

4. Analytical skills

Ability to look logically at a technical situation

5. Motivating skills

Ability to influence others to contribute to attaining firm’s goals

6. Belief in team-playing spirit

The ability to integrate people from many disciplines into an effective team

7. Timeliness

Ability to successfully manage multiple tasks within given time constraints

8. Facilitating skills

Skill to make easy or less difficult the execution of a task

9. Interpersonal skill

Skill to mix in; being friendly; ability to encourage conversation

10. Communication skill

Ability to interact effectively with others at all levels within and outside the organization

11. Technical knowledge of the subject

The capacity to manage the technological innovation and integration of solutions for the success of the project; understanding of complex elements required to effectively complete tasks associated with a given profession

12. Resource-utilization skills

The programme manager needs to work out specific agreements with all key contributors and their superiors on the tasks to be performed and the associated budgets and schedules

Contract-implementation skills

 

13. Reliance on systematic approach

Skill to do things methodically and not in a haphazard manner; a series of orderly actions at regular hours

14. Understanding of contract clauses

The power to understand and rationally approach contract clauses

15. Concern for safety, health and welfare of labour and employees

Interest in safety, health and welfare of labour and employees

16. Monitoring skills

Ability to observe something (and sometimes keeping a record of it), showing quick and keen perception

17. Maintaining records

Skill of keeping a diary and keeping notes

18. Follow-up quality

Pursuance, or skill for the continuance, of something begun with a view to its completion

19. Forecasting skills

Skill of predicting or foretelling about the future by looking at the present status

20. Planning skills

This involves the preparation of a project summary plan before the project starts, and requires communication and information processing skills

Project-organization skills

 

21. Relationship with client, consultant and contractor

Skill in maintaining good human relations with client, consultant and other contractors

22. Coordination for achieving quality

Ability to manage production of goods or services within a clearly defined set of expectations

23. Liaison skill

Ability to channelize communication between groups

24. Knowledge of project finance

Ability to understand financial statements and financial ratios, and to deal with accounting firms and financial institutions

2.7.1 Strategies for Enhancing the Performance of a Project Manager

Tarricone (1992) believes that although some are born leaders, most managers are actually created. Some of the ways in which a future project manager can be groomed start right from undergraduate training, continuing through graduate training, employer in-house training programmes, and by seat-of-the-pants experience. Some of the strategies identified by Anderson (1992) in enhancing the performance of project manager’s effectiveness are presented in the following paragraphs.

To Increase the Pre-appointment Training

At the entry level, potential project managers have only a technical background in areas such as civil engineering, mechanical engineering and electrical engineering. Most of the times, they are supposed to be learning the required managerial skills in ‘on-the-job training’ and ‘sink or swim’ mode. It is desirable to begin the induction of project managers after providing them with ‘in-house’ training or sending them to some specialized project management training institutes.

To Establish a Mentor System

The potential project manager should be attached to a good role model in the organization who may be from the middle to upper management. This way, he or she can learn the requisite project management skills.

Careful Selection of Potential Project Manager

Successful project managers have a good blend of technical and managerial skills. Concentrating fully on one aspect and overlooking the other can be disastrous for the project. Successful companies do have different schemes to identify potential project managers suitable for project management.

To Identify the Career Path Requirement Early

Depending on the skills possessed by an individual, the organization should identify his or her career path commensurate with the skills. Putting wrong men at wrong positions may not be good for either the organization or the individual.

Determining Which Key Skills to Foster

There are different aspects in project management skills, under the broad heads of human skills, administrative skills and leadership skills. It would not be appropriate or even necessary to impart training in all the aspects. The organization must make an effort to identify the key skills that the individual should be trained in for successful management of the project.

2.8 IMPORTANT TRAITS OF A PROJECT COORDINATOR

As discussed earlier, a number of studies have been undertaken to address the skill requirements of a project manager. However, very few studies have been undertaken to explore the skill requirements of a person coordinating a construction project. Although a project manager is also responsible for project coordination to an extent, in a large project, the project manager needs assistance from a project coordinator to take care of coordination aspects of the project. Past studies have also recognized the need for a project coordinator, and authors have tried to distinguish the roles and responsibilities of a project manager from that of a project coordinator (Forsberg et al. 1996, Kerzner 2002).

Any typical, large multidisciplinary project needs coordination among the personnel of different departments such as civil, electrical, mechanical, plant and machinery, HVAC, accounts, materials, design, construction method, quality, safety and HRD, totalling at least 12. Besides, a number of designers, subcontractors, construction managers, consultants and specialists from different disciplines are also involved in these projects, making coordination even more complex. To coordinate among the intra-organization departments with the above-mentioned 12 function lines, there will be 12 3 (12 2 1) possible coordination routes, i.e., 132 routes, and the difficulty any project manager would have in coordinating resources for sites can easily be imagined. The complexity of the task will be demanding and the project manager may not be able to attend to important project requirements. It is in these circumstances that the role of a project coordinator is considered vital.

In terms of hierarchy, Kerzner (2002) places project coordinator in between project administrator and technical assistants, and locates planning, coordinating, analysing and understanding of organization as the required skills to carry out his responsibility. In the subsequent sections, the skill requirement of a project coordinator has been examined.

Jha (2004) identified 24 attributes (refer to Table 2.1) of a project coordinator. These attributes were then ranked based on the responses of a questionnaire survey conducted among top Indian construction professionals. It was found that distinct differences existed between the attributes of the project coordinators in projects that were considered successful and that were considered failures. Project coordinators of successful projects were found to excel in certain important attributes such as relationship with client, consultant and contractor; timeliness; technical knowledge of the subject; belief in team-playing spirit; and coordination for achieving quality. Interestingly, the required attributes remain the same for project coordinators whether they work for the contracting organization or the owner’s organization.

Jha (2004) further classified the 24 skills needed of a project coordinator in terms of the following three categories.

2.8.1 Team Building Skill

It can be observed from any construction project site that a project coordinator has to carry out his work within limited authority. Unless his team members have confidence in him, things are not likely to work for the coordinator. Traits emerging under this skill group encompass the human relationships skill suggested by Katz (1974) for the project manager. This skill involves the ability to communicate effectively, maintain a harmonious working group and the ability to motivate employees. The ability to motivate employees also falls in human relationships skill as suggested by Katz.

Team building requires a conciliatory approach rather than a confrontational approach. A coordinator needs to show concern for the other person’s ego and should have a sound understanding of psychology.

Most importantly, a coordinator must believe in the team spirit; must be able to communicate properly, both through verbal and written communication; and must be proficient in interpersonal skill.

It is to be kept in mind that in the course of fulfilment of his/her duties, a coordinator has to interact with different departments that may not be under his/her direct control, and in such situations, he/she must demonstrate team-building skills and project himself or herself as a team member.

2.8.2 Contract Implementation Skill

Contract-implementation skill is one of the major requirements for a project coordinator. A coordinator is supposed to assist the project manager in fulfilling the contractual promises. Reliance on a systematic approach and a sound understanding of contract clauses make a project coordinator understand his responsibilities towards fulfilling this duty.

A project coordinator with monitoring and forecasting skills can keep a close watch on schedule and cost of the project, and apprise the project manager of any deviation from the same. Subsequently, with follow-up skill, he can push his team members to correct the deviations to bring the project back on track as far as time and cost requirements are concerned.

Safety, health and welfare of employees are one of the important contract requirements, and the project coordinator’s concern for the same cannot be underestimated. Maintaining records of all important events is also an important function and it helps in reducing disputes at a later date.

2.8.3 Project Organization Skill

The project coordinator must be able to perceive the project as a system by keeping a global perspective and not thinking about one aspect at a time. The project coordinator must be good at keeping good working relationships with client and consultants. A project coordinator has to work with many different groups or departments to perform his duties, and this requires a cordial and cooperative relationship, which can be achieved through good interpersonal and communication skills.

The project coordinator must be good at liaison and he should also ensure proper quality of workmanship. The project coordinator must be able to plan, should have requisite knowledge of project finance, and should be able to ensure timeliness.

2.9 ETHICAL CONDUCT FOR ENGINEERS

In day-to-day life, an engineer faces a number of situations in which he has to choose between the well-being of the project he is working on and the well-being of the society at large. An action taken by him may be beneficial for the project but it may endanger the ecosystem. For example, the alignment of a highway may be passing through a dense forest and construction may harm the trees, animal lives, etc. In such cases, he will be in a dilemma regarding the well-being of the project versus the well-being of the entire ecosystem. Should the engineer emphasise on project at the cost of different forms of life and the environment?

In some situations, he may be advised to expedite the construction works even at the cost of compromising on sound engineering practices. As another example, let us take the case of a transit mixer full of concrete reaching the concrete location after initial setting time of the concrete is over. Should the concrete be poured or should it be thrown out? There may be situations in which some of the construction materials have been rejected by the client. In such situations, should you try to use them in the project in a clandestine manner or should you waste the money of your employer?

Consider another situation in which you have to choose, from your project team, between a stronger colleague and a weaker colleague in terms of their positions in the hierarchy. In that situation, let us assume that the stronger colleague is at fault. Should you be aligning with the stronger colleague or with the weaker colleague?

In delicate or confusing situations, the concerned engineer may have the option to consult some experts and act on their recommendations, or he may act according to the wishes of the superior ignoring the ethical part of the problem, or he may himself weigh different arguments for and against, and take a decision.

The decision taken by an engineer has far-reaching consequences and, therefore, he should be even-handed in taking different points of view into consideration. Many temptations come in the way of discharging duties in the course of one’s career. The engineer should be able to resist these temptations by controlling his desires in view of the larger public interest and the welfare of mankind.

An engineer should not only be having expertise in his/her professional field, but also be familiar with ethical rules and codes of conduct of his/her profession. Ethical rules and codes of conduct vary across business organizations. What is acceptable in one organization may not be acceptable in another. This may even vary with time and culture. Some of the keywords included in newly drafted ethical rules pertain to environment and sustainable development. The commonly preached ethical rules extracted from American Society of Civil Engineers (ASCE), Japan Society of Civil Engineers JSCE, German Engineering Association, and International Association for Bridge and Structural Engineering (IABSE) are given below:

  • The engineer should contribute to the development of the nation and the promotion of human welfare through their professional knowledge. He/she should honour human life without discriminating against cast, creed, social position and religion. He/she should serve the society and should not have any intention adverse to the national development and public welfare. He/she should hold paramount the safety, health and welfare of the public in performance of their professional duties.
  • The engineer should aim at development of technology and should strive to improve his/her techniques and put the results into wide practice. He/she should continue their professional development in research field and practical utilization throughout their careers, and should contribute to the engineering society through the publication of their results. He/she should evaluate the works of his/her colleagues in the same way as he/she wants to be evaluated himself/herself.
  • The engineer should support the professional and technical societies of his/her disciplines. The engineer should issue public statements only in an objective and truthful manner. He/she should act according to well-balanced reasoning as regards their social, ecological and economic responsibilities. He/she should endeavour to conserve limited natural resources and reduce harmful pollution. He/she should obtain a comprehensive education, learn how to work with complex relationships, and acquire the ability to participate in interdisciplinary discussion. The engineer needs to develop and promote a sustainability ethics.
  • The engineer should act in a manner to uphold and enhance the honour, integrity and dignity of the engineering profession above the economic advantages. He/she should not make excessive design or excessive cost-cutting at the cost of safety. He/she should not damage the prestige of the profession.
  • The engineer should be honest and impartial, and should not behave suspiciously. He/she should avoid associating himself/herself with dubious work or lending his/her name to such work. He/she should perform services only in areas of their competence.
2.10 FACTORS BEHIND THE SUCCESS OF A CONSTRUCTION ORGANIZATION

Construction is a risky business and a large number of organizations go bankrupt every year. The construction industry is often characterized as having low entry barriers. So, every year more and more construction industries are entering the market and then, after a few years, go bankrupt because of one or the other reason.

Traditionally, construction companies completing projects in time within an established budget and meeting required quality considerations have been considered as successful companies. But if construction projects are successful, then it is not always necessary that the construction organization will also be successful. It can even fail and go bankrupt in near future. So, a shift in emphasis from project success to corporate success should be examined for construction organizations. A number of studies are needed to understand the sector completely. Although a great deal of work has been carried out in the area of construction project success factors, very few studies are reported about understanding the success parameters applicable in case of construction organizations. In this section, we present the findings of the study conducted by Garg (2007) to identify and evaluate the parameters affecting the success of a construction organization.

A total of 38 success parameters were listed out through literature survey and interviews with selected professionals from construction industries, and a set of questions was formulated. Pilot survey was then undertaken and necessary modifications in the questionnaire were carried out. A six-point scale was used in the questionnaire, intended to measure the level of importance of organizational success variables. In the scale, 0 represented ‘Insignificant/Not at all required’; 1 represented ‘marginal’;2 represented ‘significant’;3 represented ‘desirable’; 4 represented ‘essential’; and 5 represented ‘Vital/Most critical variable’.

A total of 600 questionnaires were mailed to top Indian construction industry professionals covering large- and medium-size organizations, in both private and government sectors, selected randomly from across the country. A total of 111 completed responses were collected, including 63 responses from government and 48 from private professionals. From the six-point scale used in the questionnaire, relative importance index (RII) was calculated for each of the success variables in order to know their rank based on their criticality. The RII was evaluated using the following expression:

where   w is the weight given to each variable by the respondents and ranging from 0 to 5,

           A is the highest weight (i.e., 5 in this case) and N is the total number of respondents.

Table 2.2 shows the success variables arranged in the descending order of RII values. The highest RII indicates the most critical variable with rank 1; the next indicates the next most critical variable with rank 2; and so on.

 

Table 2.2 Success variables for construction organization

The columns 2 and 3 in Table 2.2 show the most important variables to be supportive top management with RII = 0.863, followed by acquiring proper and adequate equipments for construction, acquiring new and up-to-date technology for construction, availability of resourceful project managers/project leaders, and effectiveness of the project management in improving schedule, cost and quality of the construction output. The importance of the variable supportive top management can be gauged from the fact that the dynamic, project-based nature of the construction industry results in extreme fluctuations in organizations’ workload and requires teams to form, develop and disband relatively quickly. Thus, the importance of efficient management of employee resourcing activities cannot be understated. Moreover, timely help from top management in getting the resources or arriving at critical decisions can have far-reaching implications on the performance of the organization as a whole.

The reason why the variables acquiring proper and adequate equipments for construction and acquiring new and up-to-date technology for construction are given importance is that most of the times they affect the schedule and cost of the projects and the quality of the constructed facility, and these, in turn, affect the performance of a construction organization. It is due to the same reason that the variable effectiveness of project management in improving schedule, cost and quality of the construction output is given high rank (in top 5).

The success variable, availability of resourceful project managers/project leaders, getting high rank (in top 5) implies its importance for an organization. Leadership seeks to lay the foundation for the transformation of the construction organization, particularly in relation to the creation of a culture for continuous improvement and customer/market focus.

REFERENCES

 

1. Adams, J.R. and Barndt, S.E. 1978, ‘Organizational life cycle implication for major projects’, Project Management Quarterly, 9(4), pp. 32–39.

2. Anderson, S.D., 1992, ‘Project quality and project managers’, International Journal of Project Management, 10(3), pp. 138–144.

3. El-Sabaa, S., 2001, ‘The skills and career path of an effective project manager’, International Journal of Project Management, 19(2001), pp. 1–7.

4. Enshassi, A., 1997, ‘Site organization and supervision in housing projects in the Gaza Strip’, International Journal of Project Management, 15(2), pp. 93–99.

5. Fryer, B., 1979, ‘Management development in the construction industry’, Building Technology and Management, May, pp. 16–18.

6. Gaddis, P.O., 1959, ‘The project manager’, Harvard Business Review, May/Jun, pp. 89–97.

7. Garg, S., 2007, ‘Factors for the success of a construction organization’, Masters dissertation, Indian Institute of Technology, Delhi, India.

8. Goodwin, R.S.C., 1993, ‘Skills required of effective project managers’, Journal of Management in Engineering, ASCE, 9(3), pp. 217–226.

9. Goodwin, R.S.C., 1993, ‘Skills required of effective project managers’, Journal of Management in Engineering, ASCE, 9(3), pp. 217–226.

10. http://www.en.wikipedia.org, viewed on 14 September 2009 (for information on Indian construction industry).

11. http://www.History1700s.com (for definition of corporation by Chief Justice John Marshall in 1819) viewed on 07.03.2010.

12. Jha, K.N., 2004, ‘Factors for the success of a construction project: An empirical study’, Doctoral dissertation, Indian Institute of Technology, Delhi, India.

13. Katz, D. and Kahn, R.L., 1978, The Social Psychology of Organisations, John Wiley, USA.

14. Katz, R.L., 1974, ‘Skills of an effective administrator’, Harvard Business Review, September/October, pp. 90–102.

15. Kerzner, H., 2004, Project Management: A Systems Approach to Planning, Scheduling and Controlling, CBS Publishers & Distributors, New Delhi, India.

16. Laufer, A. Woodward H. and Howell, G.A., 1999, ‘Managing the decision-making process during project planning’, Journal of Management in Engineering, ASCE, 15(2), pp. 79–84.

17. Newcombe, R., Langford, D. and Fellows, R., 1990, Construction management organization systems, Mitchell, London, p. 219.

18. Odusami, K.T., 2002, ‘Perceptions of construction professionals concerning important skills of effective project leaders’, Journal of Management in Engineering, ASCE, 18(2), pp. 61–67.

19. Ofori, G., 1994, ‘Construction industry development: Role of technology transfer’, Construction Management and Economics, 12, pp. 379–392.

20. Ogunlana, S.O., Li, H. and Sukhera, F.A., 2003, ‘System dynamics approach to exploring performance enhancement in a construction organization’, Journal of Construction Engineering and Management, 129(5), pp. 528–536.

21. Pettersen, N., 1991, ‘Selecting project managers: An integrated list of predictions’, Project Management Journal, 22(2).

22. Pettersen, N., 1991, ‘What do we know about the effective project manager?’, International Journal of Project Management, 9(2), pp. 99–104.

23. Poirot, J.W., 1991, ‘Organising for quality: Matrix organization’, Journal of Management in Engineering, ASCE, 7(2), pp. 178–186.

24. PMBOK, 2001, A guide to the project management body of knowledge, Project Management Institute, http//www.pmi.org.

25. Spitz, C.J., 1982, ‘The project leader: A study of task requirements, management skills and personal style’, Doctoral dissertation, Case Western Reserve University, USA.

26. Stuckenbruck, L.C., 1976, ‘The ten attributes of the proficient project manager’, Proceedings of the 8th Project Management Institute Seminar/Symposium, Montreal, Canada.

27. Tarricone, P., 1992, ‘Portrait of a Manager’, Civil Engineering, ASCE, 62(8), pp. 52–54.

28. Tenah, K.A., 1986, ‘Management level as defined and applied within a construction organization by some US contractors and engineers’, Butterworth & Co. (Publishers) Ltd, 4(4), pp. 195–204.

29. Thomas, R., Keating, J.M. and Bluedorn, A.C., 1983, ‘Authority Structures for Construction Project Management’, Journal of Construction Engineering and Management, 109(4), pp. 406–422.

30. Uher, T.E. and Toakley, A.R., 1999, ‘Risk management in the conceptual phase of a project’, International Journal of Project Management.

REVIEW QUESTIONS
  1. State whether True or False:
    1. The amount of authority given to a project manager can be related with the organizational structure.
    2. Project manager has maximum authority in matrix organization structure.
    3. Project manager has least authority in pure project organization.
    4. Authority is the power granted to individuals so that they can make final decisions for others to follow.
    5. Responsibility is the obligation incurred by individuals in their roles in the formal organization in order to effectively perform assignments.
    6. Accountability is the state of being totally answerable for the satisfactory completion of specific assignments.
    7. The main advantage of sole proprietorship is its unlimited personal liability for debts and the ease in obtaining a large sum of money for the business.
    8. The major advantage of partnership organization is that of impermanence, the ease in transferring ownership, and its limited liability.
    9. A corporation is a real being, visible, tangible and existing as per the law.
    10. Private limited company is a type of incorporated firm and offers limited liability to its shareholders.
    11. Public limited company is an incorporated, limited liability company having tradable shares, etc.
    12. Limited liability companies are a combination of corporation and partnership.
    13. Project management can be divided into three categories—matrix, functional and project forms of organization.
    14. Matrix organization has three different forms—functional matrix, balanced matrix and project matrix.
    15. Project manager’s effectiveness can be ensured by three essential skills—technical skills, human relationship skills and conceptual skills.
    16. Ethical conduct and professionalism are not required for the success of a construction project.
    17. Important traits required for project coordination are—team-building skills, contract-implementation skills and project-organization skills.
  2. What do you mean by a construction company? Distinguish between authority, responsibility and accountability.
  3. Discuss different forms of business organization firms.
  4. Comment on the joint venture form of businesses. What are the merits and demerits of such forms?
  5. Why is structuring required for a construction company? Discuss different structures of a construction company.
  6. Differentiate between centralized and decentralized forms of a construction company.
  7. What are the key features of the matrix organizational structure?
  8. What are the important factors for choosing a particular project management authority structure?
  9. Distinguish between vertically and horizontally structured organizations.
  10. The common bond between individuals and their supervisors will enhance cooperation and effectiveness of an individual group. Discuss in the context of the functional organization.
  11. What do you mean by steady flow of projects?
  12. Why are pure project organizations least common nowadays?
  13. Discuss partial projectization.
  14. Matrix organizations are a blend of functional and projectized characteristics. Explain.
  15. Discuss different hierarchies of management level.
  16. Discuss different functions and skills required of a project coordinator.
  17. Discuss strategies for enhancing the performance of a project manager.
  18. Discuss the important traits of a project coordinator.
  19. What are the essential ethical conducts expected from project engineers?
  20. Define organization, management, levels and roles of management, and types of information required at different levels of management.