Recent Contributions: A wide range of industrial, commercial and governmental organizations

has adopted project management to handle their many and various projects. Unfortunately many
projects are facing time and cost overruns due to environmental constraints and poor project
management systems. This is true in the case of construction industries as well. Besides, the fact
that construction projects:

 involve almost all industries and sectors in realizing their infra structural needs
 use wide variety of resources and their scarcity
 exhibit fierce competition nationally and globally
 decrease their profit margins to its lowest bottom

and the human, cultural and ecological aspects makes their management complex, risk
undertaking, and working in an uncertain environment.

The Construction industry is the major and direct beneficiary of innovations from the field of
general and project management. For effective and efficient accomplishment of construction
projects and to increase their probability to success, project management concepts are
undoubtedly necessary. The Professional Construction Management (PCM) itself is young and
still is not widely assimilated into the construction industry.

A constant challenge faced by today's project management is change. On the one hand change
represents growth, opportunity and development, and yet on the other hand change represents
threat, disorientation, and upheaval. All management concepts would admit that there is no
single prescription or formula possible for successes of projects. However, by applying the
various new project management concepts, most, if not all, present problems can be solved.

These problems are further intensified with the size and complexity of construction projects. In
such a context, traditional project management principles and tools alone are proving inadequate
assistance to achieve and sustain improvements in the management of construction projects.
These facts, therefore, necessitate the creation and application of new project management
principles. New project management principles includes Total quality management (TQM),
Management by projects (MBP), Business process re-engineering (BPR), Value engineering/
management (VE/ VM), and Concurrent engineering (CE).

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Total Quality Management (TQM): A typical definition for TQM is:

A cooperative form of doing business that relies on the talents and capabilities of labor
and management, using teamwork, to continually improve quality, economy and
productivity, to complete satisfaction and delight of the customer. (Sharad and Sulimani,
1994)

This definition embodies three basic ingredients of TQM: participative management and
teamwork; continuous process improvement; and customer satisfaction and delight (Sharad
and Taher, 1998).

Arditi and Gunaydin also identified the factors that affect quality in each phase of the
construction process as accepted elements of the TQM. TQM concepts first developed for the
manufacturing industries in Japan and wide spread all over the world mainly due to its
application resulted in increased productivity, decreased product cost, and improved product
reliability. In the construction industry quality is defined as meeting the requirements of the
designers, constructors, regulatory agencies and the owner. Quality can be characterized by
meeting the requirements of:

 the owner, including functional adequacy, completion on time and within budget, and life
cycle costs including operation and maintenance
 the design professionals, including provision of well-defined scope of work, budget to
assemble and use a qualified, trained and experienced staff, budget to obtain adequate
field information prior to design, provisions for timely decisions by owner and design
professionals, and contract to perform necessary work at a fair fee with adequate time
allowances
 the constructors, including provision of contract plans, specification, and other documents
prepared in sufficient detail to permit the constructor and prepare priced proposal, timely
decisions by the owner and design professional on authorization and processing of change
orders, fair and timely interpretation of contract requirements from field design and
inspection staff, and contract for performance of work on a reasonable schedule which
permits a reasonable profit, and

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  the regulatory agencies, including public safety and health, environmental considerations,
protection of public property, and conformance to applicable laws, regulations, codes and
policies. (Arditi & Gunaydin, 1997)

These concepts are also applicable and very vital to the construction industry. This is because,
attainment of acceptable levels of quality in the construction industry has long been a problem
and considerable expenditures of time, money and resources, both human and material, are
wasted each year because of inefficient or non-existent quality management procedures. And
therefore, it is argued and believed that TQM application to the construction industry are
necessary and useful to tackle most, if not all, quality problems.

Management by Projects (MBP): Management by projects is a way, an outlook, and an attitude

cultivated to treat any trade of work, undertaking, scheme, assignment or a set of activities, as a
project. What is immediately implied or called for by accepting a trade of work as a project is:
identified scope; required completion time; estimate of cost and other resources inclusive of
manpower; economic quality performance; and review of the work done with follow-up of some
kind (Taher& Sharad, 1998).

MBP provided the basis to carry out a business like a project, with a systematized process of
planning, executing and controlling. A project is unique in its character and has a definite
beginning and end together with a completed product of an acceptable quality and economy.
This is what essentially distinguishes Management by projects from general or corporate
management. Professional Construction Management (PCM) is essentially the management of
construction projects, which is analogous, if not synonymous, with MBP as applied to the
construction industry. Planning and scheduling, cost estimating-budgeting-monitoring-
forecasting, contract administration, quality control/assurance, progress measurement and
reporting, and human aspects like teamwork are all as relevant to PCM as they are regular
features of MBP methodology. MBP, therefore; provides the essential project orientation for
managing construction, and advocates employing the project management tools and techniques.

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Business process re-engineering (BPR): BPR is defined as:

An organizational improvement methodology that focuses on redesigning organizational

processes 'from the ground up', using information technology to integrate work, increase
consistency, and dramatically shorten process cycle times. (Mattinsly, 1994).

BPR advocates 'radical improvement', rather than 'continuous improvement', of processes for
better ultimate performance. Key features of BPR includes rapid thinking, creating new
scenario, simplify processes, information technology to reintegrate works, fewer skilled
employees, and flatter organization.

It involves risks, such as: investments in complex information system; potential damage to
organizational culture, and reduced motivation of the few remaining employees. However, it
provides several benefit including simpler and shorter processes, fewer but highly skilled
employees, flatter and more efficient organization, and lower structural costs.

According to Dey (1999) Construction, as a business process, can very well utilize business
process re-engineering improvement techniques. Construction projects have been re-engineered
from earlier times till now. This varies from an engagement of one party to design and build by
the owner to the PCM approach to a stage where construction managers or project managers
undertaking responsibility to develop an overall project plan and monitor its progress.

Besides, the traditional bar chart schedule was re-engineered into CPM and PERT with the
application of computerized aids and its further re-engineering reached today's level of
considering uncertainties in scheduling by the use of stochastic analysis. Therefore BPR is one of
the newly realized and emerging concept of project management, though not entirely a new
concept in practice, that is relevant to the construction industry. To effectively use BPR in the
construction industry the following steps with the recognition of challenges and pitfalls together
with the solutions is recommended:

Steps:
1. Process re-engineering including identification of processes; selection of key
processes; selection of key areas of improvement; and deriving the re-engineered
process.

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 2. Planning information systems in line with the process requirement; and
3. Applying advanced project management tools and techniques including project risk
management.

Challenges / pitfalls:
1. Re-engineering of processes require drastic paradigm shifts which may take a
considerable time for adaptation in the existing system;
2. New processes may require application of some new tools and techniques which may
cause problems during adoption in the existing methods; and
3. Re-engineering processes demand the application of information technology (IT)
tools, which may require additional capital investment.
Solutions:-
Attitude changes, appropriate training, and Cost benefit analysis to justify investment.
(Dey, 1999)

Value Engineering / Management (VE / VM): Value Engineering is a systematic study of

project requirements using a multi-disciplined team to identify and eliminate unnecessary costs
and poor performance by using functions (Sievert, 1991). Analysis of functions is the foundation
of value engineering using a project team approach. Value engineering provides an effective
environment for the project team to cooperate, communicate, resist premature decision-making
that can result in unnecessary costs, and an organized and expedient system for extracting
information from owners and users to make effective project decisions.

Value Engineering is a systematic and organized effort to identify the functions of a product,
system or procedure and to attain that function with minimum cost without jeopardizing
quality, aesthetics, appearance etc.

Value engineering studies may be performed by Consultants during design development or by

the contractor during construction. The most effective time to conduct such studies is during
design development.
The value of a component or system can be defined as its function plus quality divided by its
lifecycle cost.

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  Value of a component = ( Function + Quality )
Life Cycle-Cost
 Life-Cycle Cost = Initial or Construction Cost + Operating Cost+ Maintenance Cost+
Depreciation Cost – any Salvage Value.

Value Engineering seeks the highest value design components by Improving utility with same
cost or maintains same function with less cost.

Accordingly, Sievert developed a job plan approach to the project team for effective application
of VE consisting of five phases: Information, Creativity, Evaluation, Development and
presentation, and Implementation. And he suggested that VE can be applied during any phase of
the project cycle. But he strongly emphasized that the greatest return on the value engineering
investment can be expected when the value study is initiated during the planning and
programming phase of a project, where the ability to influence costs is greatest.

Oftentimes owners commit substantial funds and resources to a construction project prior to
defining the specific need for the project, program requirements and cost management
procedures. It is a risky business and the result could be cost and time overruns, quality control
problems, changes, disputes or an end product that does not function as intended. Construction
projects integrate the principles of multi-dimensional professions: business administration,
engineering know-how, communication skills, and behavioral sciences.

It is of no value therefore, if the project result does not meet the customers' requirements
regardless of its price. Besides, as change and modification are facts of management, plans must
be made not only to provide us with the management of change, but also with the insurance that
this constant change is used to our advantage (Mudge, 1989 in Sievert's article). This major
advantage to us is the removal of unwanted and unnecessary factors from our business
environment. Value engineering facilitates planning for a positive course of action to remove
these factors, and bring in better results at total lower costs.

Concurrent Engineering (CE): Concurrent engineering is defined as:

A systematic approach to the integrated, concurrent design and their related processes,
including manufacturing and support. This approach is intended to cause developers from

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 the outset, to consider all elements of the product life-cycle from conception through
disposal including quality, cost, schedule, and user requirements (Winner, 1988).

CE bases its concepts on the development of Partnership, Design-and-Construct, Build-Own-

Operate-Transfer (BOOT), Design-Build-Finance-Operate (DBFO) and Management
Contracting and Construction Management methods of Procurement. CE is conceptually an
effort to effectively integrate all aspects of product development, by performing simultaneously a
variety of activities that used to be done sequentially.

The construction process has been heavily criticized for its fragmented approach towards the
delivery of construction projects. This has affected project effectiveness in as much as traditional
practices do not effectively encourage the integration, coordination and communication between
participants. This inhibits the scope for creativity and innovation throughout the project cycle.
CE has great potential in overcoming these problems and may significantly improve the way in
which construction projects are realized, specifically in eliminating the procurement gap existed
between design and construction. This gap contributed to major behavioral, cultural and
organizational differences between project individuals and groups, and perhaps most of all, the
communication process. Therefore, CE is expected to satisfy the need for procurement strategy
that can effectively coordinate and integrate individuals and groups for construction projects
leading to inter-organizational communication and team building to thrive and become a normal
practice.

2.2 BASIC FUNCTIONS OF MANAGEMENT AND ROLES OF

MANAGERS

FUNCTIONS OF MANAGEMENT

Functions of management can be described in four major elements. These are:

Planning
Organizing
Implementing, and
Monitoring
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PLANNING: Planning involves setting visions, missions and goals of organizations or projects or
programs together with the activities to achieve them. All levels of managers develop goals that
corresponds to the efforts of the top management overall goals and strategy. This requires
operational plan aimed at administration and coordination of Stakeholders, Processes and
Resources. Planning is beneficial in that it makes better coordination, focuses on forward thinking,
and creates participatory work environment and good for effective monitoring and feedback
systems.
ORGANIZING: It is the process of arranging people and physical resources to carry out plans and
accomplishes organizational objectives. This helps how responsibilities of individuals who are
required to execute the works are defined and staffing and directing can be performed. Such things
can easily be shown by the use of Organization Chart. Organization makes sure the flow of
information resources and tasks logically and efficiently. Besides, the organization of sites,
specifically to construction, together with the physical resources is also considered as the part of the
organizing functions of management.

IMPLEMENTING: It is the process whereby the actual work is executed. This helps in executing
the task defined in the planning stage with proper organization system together with monitoring
quality, time and cost of the works. Proper inspection and supervision, recording data of executed
works, availing all necessary resources at the right place and at the right time with their proper
coordination are necessary to achieve the required goal efficiently and successfully. The most
important aspect in implementation of works is leading / directing. Leading is the act of motivating
or causing people to perform certain tasks intended to achieve specified objectives. In general, it is
the art of making things happen. Leading requires understanding the dynamics of individual and
group behaviors, motivation of employees, effective visionary and effective communication
capabilities.

MONITORING: Monitoring is the process by which executives and legislatives determine or

evaluate whether organizational objectives are being achieved and actual operations are in
consistent with plans or not. This helps for checking mechanism and used as a feedback for future
planning. Such things are done against the planned data with the help of communication in the form
of reporting, assessment and checking mechanism of any kind which is suitable for the purpose of
the executed works.

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Effective management can take place when proper planning, organizing, implementing, continuous
communication, feedback for monitoring purpose and future planning are carried out successfully.

MANAGERIAL ROLES

According to widely known references, Henry Mintzberg brought forward three primarily
managerial roles: Interpersonal, Informational and Decision Making Roles.

Interpersonal Roles These roles are related to formal authority base of managers.
Figurehead Roles related to ceremonial in nature.
Leadership Roles related to ensuring achievement of goals.
Liaison Roles related to communication with internal and external
stakeholders to develop favorable relationships and networks.
Informational Roles These roles are related to availing sufficient information to
carryout jobs effectively. Because they are information centers
for information and communication source.
Monitor Roles related to scanning internal and external environments of
their organizations for selecting useful information.
Disseminator Roles related to sharing and distributing useful information to
Spokesperson employees.
Roles related to information communications to external
stakeholders.
Decision Roles These roles are related to processing information to reach
Entrepreneur conclusions.
Disturbance Handler Roles related to initiating new developments.
Resources Allocator Roles related to conflict resolution and problem solving.
Negotiator Roles related to distribution and assignment of different
resources to projects.
Roles related to win comparative & competitive advantages to
achieve goals.

Besides, recent trends enlarged managerial roles due to changed environments such as:
 Globalization of markets

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 Increasing predominance of Entrepreneurial Firms
 Growth in Service - based organizations
 Increasing Diversity
 New organizational Model, and
 Increasing customer focus

2.3 MANAGEMENT SCOPES AND LEVELS

Managers could be classified into different categories depending upon the scopes and levels of
management they are involved in. Depending on the nature and scope of the job managers are
performing, they can be classified under either functional or general managers. While functional
managers are responsible for a work group segmented according to functions; general managers
involve in managing several different functions or departments which are responsible for
different tasks. While Functional managers greatest challenge is lack of communication skill;
that of General Managers is technical skills.

Managers exist at various levels in the organizational hierarchy but are dependent on their sizes
and forms. That is, while small organizations may have only one, big ones may have several
layers. Generally speaking, a relatively large organization possesses three levels of managers:
Top, Middle and First – line or Lower managers and could resemble pyramidal shape as shown
in the figure below. These levels of managers do perform certain job or level – specific skills
which are more important to their respective levels.

Top
Top
Mangt
Mangt
Top Middle Lower
Management Management Management
Middle
Middle
Management Conceptual Conceptual
Management
Human
Conceptual
First – Line or Human
First – Line or
Lower
Lower Human
Management Technical
Management
Technical
Technical

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From the figure above, Technical skills are more important to lower management levels; Human
skills are more important to middle management levels and Conceptual skills are more important
to top management levels.

2.4 STRATEGIC MANAGEMENT

ORIGINATEGIC MANAGEMENT
The increasing importance of strategic management may be a result of several trends. Increasing
competition in most industries has made it difficult for some companies to compete. Modern and
cheaper transportation and communication have led to increasing global trade and awareness.
Technological development has led to accelerated changes in the global economy.

Many perspectives on strategic management and the strategic management process have
emerged. Some of these perspectives are: (1) the traditional perspective, (2) the resource - based
view of the firm, and (3) the stakeholder approach, which are outlined in the Table under.

Traditional Resource-Based View Stakeholder View

Perspective
Origin Economics, other Economics, Business ethics and
business disciplines, distinctive social responsibility,
and consulting firms competencies, and
general management
capability
View of An economic entity A collection of A network of
Firm resources, skills, and relationships among
abilities the firm and its
stakeholders
Approach Situation analysis Analysis of Analysis of the
to Strategy of internal organizational economic power,
Formulation and external resources, skills, and political influence,
environments abilities rights, and
leading to Acquisition of demands of various
formulation of superior resources, stakeholders
mission and skills, and abilities
strategies
Source of Best adapting the Possession of Superior linkages
Competitive organization to its resources, skills, and with stakeholders
Advantage environment by abilities that are leading to trust,
taking advantage valuable, rare, and goodwill, reduced
of strengths and difficult to imitate uncertainty,
opportunities by competitors improved business
and overcoming dealings, and
weaknesses and ultimately higher
firm performance

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The key activities in the strategic management process are shown in Figure below and begin by
providing:

1. A situation analysis of the broad and operating environments of the organization,

including internal resources and both internal and external stakeholders
2. The establishment of strategic direction, reflected in mission statements and
organizational visions
3. A formulation of specific strategies
4. Strategy implementation, which includes designing an organizational structure,
controlling organizational processes, managing relationships with stakeholders, and
managing resources to develop competitive advantage

Strategic Management Processes

Reading assignment on the above outlined three perspectives of strategic management and
on the importance of strategic management!

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