Management Principles

Understanding of Management Principles and Their Application to the
Construction Industry and Built Environment Sector Together With Its

Structures and Activities
By
B. Bihan Chathuranga Fernando
Student ID NG/HNDQS10/26
A report submitted in partial fulfillment of the requirements for the
Higher National Diploma in Quantity Surveying
Lecturer: Ms. B.A.Harshi Madubashini
International College of Business and Technology
Nugegoda
July, 2016
Unit/Module Management Principles and Application
Assessment Assignment: Understanding of management principals and their

application to the Construction & Built Environment sector together
with its structures and activities.
Lecturer B.A Harshi Madubashini
StudentName B.B. Chathuranga Fernando ID NG/HNDQS/10/26
DateHandedOver 17/05/2016 DateDue 05/07/2016
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Assessed By(Name): B.A Harshi Madubashini
Signature: Date: / /2016
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ACKNOWLEDGEMENTS
I would like to express my special gratitude and deepest appreciation to The

International College of Business and Technology and most of all, our lecturer, Ms. Harshi
Madubashini, for a successful presentation and report on Management Principles and Its
Application and giving all the required encouragements and unerring guidance.
Furthermore, it is my great pleasure to bestow my sincere thanks to my parents and my

friends specially for encouraging me and the support and knowledge we shared.
Finally, I would like to thank everyone who helped me in various ways to convert this
project into a successful one.
Management Principles and Application ~i~

TABLE OF CONTENT
Acknowledgements ..................................................................................................................... i
Table of content .........................................................................................................................ii
Table of figures ......................................................................................................................... iv
1. Introduction ........................................................................................................................ 1
2. Task 01 ............................................................................................................................... 2
2.1 Established definitions of management....................................................................... 2
2.2 Principles and processes of management .................................................................... 3
2.2.1 Principles of management ........................................................................................ 3
2.2.2 Processes of Management ........................................................................................ 7
2.3 Motivational needs of individuals and groups to take control of behavior, motivation
and leadership performance of staff and labors ................................................................... 11
2.4 Purpose of mission statement, strategy, corporate planning, policy and objectives . 13
2.5 Main markets, activities and services provided by the construction and built
enviorenment sector ............................................................................................................. 16
2.6 Quality standards and statutory compliance.............................................................. 18
2.7 Communication and liason (co-opration) activity need to be organized and
managed in a project ............................................................................................................ 22
2.8 Roles and responsibilities of different professions in construction and main cycle of
work .................................................................................................................................. 24
2.9 Organizational structure ............................................................................................ 28
2.10 Comparison of project based organizational structures ............................................ 35
2.11 Sustainable construction and environmental management and conservation issues
impact on the organization and operation of a project ......................................................... 38
2.12 Application to the scenario of task 01....................................................................... 44
3. Task 02 ............................................................................................................................. 45
3.1 Main procurement methods and methods of tendering ............................................. 45
3.1.1 Main procurement methods .................................................................................... 45
3.1.2 Main tendering methods ......................................................................................... 52
3.2 Constitute of contract and right and obligations of main parties .............................. 54
3.3 Concepts of multi-diciplinery non-adversely working identified in latham report ... 58
Management Principles and Application ~ ii ~

3.4 Difference of estimated and actual cost and application of cost planning, cash flow
and monitoring of construction ............................................................................................ 59
3.5 Concept of sharing best practice and use for benchmarking of the organization ..... 64
3.6 How scale and size of the contracts influence busines practice within the site ........ 67
3.7 Opinion on siyatha tradings new office building ..................................................... 68
4. TASK 03 .......................................................................................................................... 69
4.1 Calculation and finding of critical path ..................................................................... 69
4.2 Methods of work plan, monitoring and progress control used in construction project 70
4.3 Schedule and managing the supply and utilization of resources ............................... 74
4.4 Organizing site layout, resourcing and accomadation contributing to management 77
4.5 Planning for critical activities in a construction project ............................................ 79
5. Conclusion ....................................................................................................................... 80
6. References ........................................................................................................................ 81
Management Principles and Application ~ iii ~

TABLE OF FIGURES
Figure 2.2-1 Maslow's Hirarchy of Needs ................................................................................ 5

Figure 2.2-2 Processes of management ..................................................................................... 7
Figure 2.2-3 Circle of motivation .............................................................................................. 9
Figure 2.9-1 Simple Organizational Structure ......................................................................... 30
Figure 2.9-2 Functional Structure ............................................................................................ 31
Figure 2.9-3 Divisional Structure ............................................................................................ 32
Figure 2.9-4 Matrix Structure .................................................................................................. 33
Figure 2.11-1 Green Roofing ................................................................................................... 41
Figure 2.11-2 Rain Water harvesting ....................................................................................... 42
Figure 4.2-1 Ganett Chart of Work Programme ...................................................................... 72
Figure 4.2-2 Project Control budget ........................................................................................ 73
Figure 4.3-1 Material Procurement Schedule .......................................................................... 75
Figure 4.3-2 Labor Schedule.................................................................................................... 75
Management Principles and Application ~ iv ~

1. INTRODUCTION
The Project Management Institute (PMI) defines project management as the art of
directing and coordinating human and material resources throughout the life of a project by
using modern management techniques to achieve predetermined objectives of scope, cost, time,
quality, and participating objectives. In the case of construction project management, you can
simply take PMIs definition and put it into a construction context for a definition of a
construction project manager.
Construction project management involves the planning, coordination, and control over
the various tasks involved in construction projects. This could include different types of
construction projects, like agricultural, residential, commercial, institutional, industrial, and
heavy civil, and environmental.
It typically includes complex tasks that change dramatically from project to project, and
requires skills like strong communication, knowledge of the building process, and problem
solving.
This report is prepared in structure of the identifying the basic principles of

management and importance and its application to the construction industry.
Management Principles and Application ~1~

2. TASK 01
2.1 ESTABLISHED DEFINITIONS OF MANAGEMENT
Management can be introduced as the discipline of utilizing human, material,

technological and natural resources available, effectively and efficiently in order to achieve the
organizational goals. Since organizations can be viewed as systems, management can also be
defined as human action, including design, to facilitate the production of useful outcomes from
a system. And this view helps in giving the opportunity to manage oneself as a prior
requirement to attempting to manage others.
It is difficult to give a precise definition to the term Management. Many experts

have defined the management in their views and following are 3 of definitions from those
scholars but the common with these definitions is, all aims on providing the guideline or the
disciple to get the work done.
According to F.W. Taylor, "Management is the art of knowing what you want to
do and then seeing that they do it in the best and the cheapest may."
As of the Taylors defining, advising to first set the target clearly and to identify the
best way which is cheapest, efficient and effective of achieving the target pre-
determined.
According to Peter F. Drucker, Management is a multipurpose organ that

manage a business and manages Managers and manages Workers and work.
As of the Druckers defining, management is considered as a key element or an organ

which controls the other units within an organization. The multipurpose does not
have been defined as a certain set but can be considered as its trying to address the
each and every part within a organization.
According to Mary Parker Follett, Management' is the art of getting work done
through people.
And it is a series of continuing and related activities which also involves and
concentrates on reaching organizational goals. It reaches these goals by working with
and through people and other organizational resources.
(Boundless, 2016)

2.2 PRINCIPLES AND PROCESSES OF MANAGEMENT
2.2.1 Principles of Management
Management theories are implemented to help increase organizational productivity and

service quality. Not many managers use a singular theory or concept when implementing
strategies in the workplace: They commonly use a combination of a number of theories,
depending on the workplace, purpose and workforce.
MCGREGORS THEORY
Douglas McGregor's theory of management, often referred to as McGregor's XY

theory, remains a cutting-edge management model though more than 50 years old. His theory
in management changed the relationship between managers and employees, paving the way for
best practices implemented by some of today's most successful companies.
In 1960 Douglas McGregor published the human side of Enterprise, in that book
he defined that the use of traditional management techniques might not be the only way to
motivate the employees. Instead, he advocated a new and different approach, which he claimed
would at least achieve the same if not more motivation.
McGregors theory is called Theory X / Theory Y. Where by:
Theory X (Authoritarian management style)
The assumptions that employees dislike work, are lazy, dislike responsibility, and
must be corrected to perform. Therefore most people must be forced with the threat of
punishment to work towards organizational object.
Theory Y (Participative management style)
The assumption that employees like work, are creative, seek responsibility, and can
exercise self-direction. These people will apply self-control and self-direction in the pursuit of
organizational objectives, without external control or the threat of punishment.
While some people might consider work as a heavy burden loaded on their
shoulders, some might be totally opposite and take great personal satisfaction from it. It is a
matter of motivation where the former lacks and the latter possess. While the above mentioned
two theories can be motivational in their own unique ways, there can be flaws to them as well.
Theory X can bring out the working capabilities in an individual in forceful methods but most
successful and picture perfect outcomes are visible in cases where there is great self-
satisfaction, which is a lacking factor in Theory X. we can pioneer the argument that workers
are not mere cogs in the company machinery, as theory X practiced organizations seemed to

believe. The possibility of meeting the organizational goals in the best way though Theory X
is always lesser than the Theory Y.
MASLOWS THEORY(HIRARCHY OF NEEDS)
Maslow invented the theory that there is an un-dischargeable chain of command of

needs; therefore naming it as 'Hierarchy of needs Theory'. The theory was built on a Hierarchal
scale where it gradually proceeds from the bottom to top as the most motivational factors
occupy the broad base at the bottom. According to Maslow, each of these stages should be
fulfilled to employees to achieve their maximum potential.
Maslow defined five levels of human needs and he had arranged them in a pyramid of
the weight of each need carries. They are;
Physiological needs - The lowest level of needs. Food, water, clothes,

shelter are including in here. Manager focus on these needs to motivate
employees by giving reasonable salary, better working conditions, more
leisure time and other benefits.
Safety needs - A manager is providing this need by giving protection on

job, fringe benefits and employees protection against automation.
Social needs - Love and affection, friendship, need of acceptance and

feeling of belongings are include under this and managers address these
needs by doing extracurricular activities and other things.
Self-actualization needs - This is the highest level of needs. Managers who

emphasize self-actualization may involve employees in designing jobs,
make special assignments on employees' unique skills, or allow work crews
to develop work procedures and plans for implementation.
Esteem needs - This describes the need of an individual has to occupy a

position in time.

Figure 2.2-1 Maslow's Hirarchy of Needs (Source: Google)
HERZBERGS TWO FACTOR THEORY (HYGIENE MOTIVATION)
Frederick Hertzberg took the view that people live at two levels, the physical and the
psychological. He observed two hundred accounts and engineers good and bad experiences at
work and based on his analysis and he set out to determine the effect of attitude on motivation,
according to his study he developed the motivation-hygiene or two factor theory of motivation.
Hence proposing the two factor model of motivation that was based on the concept that
there can be a particular set of factors that can cause satisfaction in the workplace and another
set of factors that can promote dissatisfaction, he also stated that both these satisfaction &
dissatisfaction on the occupation are solely independent of each other. This theory suggested
that it is the administration's job to recognize and attend to both these sets of characteristics
while not forgetting the fact that they are independent phenomena, in order to improve the good
attitude on the job and hence; productivity.
Herzberg identified two factors that to the motivation of a working place.
Hygiene factor - This includes the salary, working conditions, job safety, policies and
technical qualities of supervision.
Motivation/satisfiers factors - Responsibilities, achievements, growth opportunities

and feelings are including under this.

PETER DRUCKERS MANAGEMENT BY OBJECTIVES THEORY
Management by objectives works if you first think through your objectives. 90% of the time
you havent.
Market
Standing
Public Innovation
Responsibility
Worker Physical &

performance & financial human
attitudes resources
Manager
performance &
development Productivity
Profitability
This process will define objectives within an organization, making the management and
employees understand what their role and what they need to do in the organization to achieve
the objectives they agreed to. This theory of peter Drucker's will also compare the standard set
of performance expected from an employee with their actual display of performance. It is a
highlighted fact that the workers were given the opportunity to participate in setting the goals
and also selecting what path of action should be followed. This will serve the purpose of
resulting the workers to fulfill their responsibilities.
SCIENTIFIC MANAGEMENT (TAYLORISM)
Another established theory of management is the 'Taylor's Scientific Management

Theory'. He described how the scientific methods can be applied in managing workers to
improve the productivity or the outcome. It mainly focuses on simplifying the jobs that had
been previously been too complicated, therefore making it only possible for the extremely
specialized and only skilled laborers to indulge in them. By following this theory, workers can
be trained and lead to identify their specialty.

2.2.2 Processes of Management
Management as a process, management refers to a series of inter-related functions.

It is the process by which management creates, operates and directs to the organization goals
through systematic, coordinated and co-operated human efforts. According to George R. Terry,
Management is a distinct process consisting of planning, organizing, actuating and
controlling, performed to determine and accomplish stated objective by the use of human
beings and other resources, as process, management have the aspects, since the human factor
is most important it has the duty of developing the interrelationship between people by acting
as a social process. And its a integrating process as management bringing the human, physical
and financial resources together to achieve the organizational goal and other aspect of
management can be considered as its a continuous process which constantly continuing to
identify the problems and solving them.
Mainly the processes of management consist with following 07 key factors which
have been identified and developed,
Forecasting
Communicating Planning
Co-ordination Organizing
Controling Motivating
Figure 2.2-2 Processes of management

FORECASTING
Forecasting is a decision-making tool used by many businesses to help in budgeting,

planning, and estimating future growth. In the simplest terms, forecasting is the attempt to
predict future outcomes based on past events and management insight. Forecasting provides
information about the potential future events and their consequences for the organization.
Features of forecasting can be brought to light as it shows the probability of happening

of future events. As an example, in a construction project weather plays a major role in the time
period of the construction. By analyzing the past weather data it can be forecasted which time
period that the team needs to be expecting the rain. Financial forecast is another feature which
would determine the cost and how would be the cash flow will be. Like considering the clients
deposits and financial status, forecast will tell when he would need to apply for a bank loan or
when the client would be start making the profit out of his investment etc. Resource forecast is
another important feature that would be requiring to keep a construction process continuing
with the adequate resources of plant, material and man. Workload forecast is another important
aspect. Like when would be the time period that workload will go up and how to manage the
required resources and manpower of that period will be estimated on this.
Essentially forecasting will focus on the events that likely to happen on the future and
to get the team ready to solve the problems to achieve the goal.
PLANNING
Planning means looking ahead and chalking out future courses of action to be followed.
It is a preparatory step. It is a systematic activity which determines when, how, where and who
needs to perform a specific job. Planning is a detailed programme regarding future courses of
action like preparations of construction programs, method statements and drawing schedules.
The planning process; identifies the goals or objectives to be achieved, formulates

strategies to achieve them, arranges or creates the means required, and implements, directs, and
monitors all steps in their proper sequence. Thus, planning is a systematic thinking about ways
& means for accomplishment of pre-determined goals. Planning is necessary to ensure proper
utilization of human & non-human resources. It is an intellectual activity and it also helps in
avoiding confusion, uncertainties, risks, wastages etc.

Organizing
It is the process of bringing together physical, financial and human resources and
developing productive relationship amongst them for achievement of organizational goals. It
is a function in which the synchronization and combination of human, physical and financial
resources takes place. All the three resources are important to get results. Organizing as a
process involves:
Identification of activities.
Classification of grouping of activities.
Assignment of duties.
Delegation of authority and creation of responsibility.
Coordinating authority and responsibility relationships.
In means of defining the term organization, simply it can be brought as defining and
distributing the responsibilities and duties among the various personnel in the organization.
Motivating
Motivation is a social process the executive function of cultivating morale, inspiring

loyalty to leaders and producing an emotional climate conductive to the proper fulfillment of
all the tasks.
Purpose Needs
Passions Talents
Figure 2.2-3 Circle of motivation
Motivation means needs, desires, wants or drives within the individuals. It is the process
of stimulating people to actions to accomplish the goals. One of the most important functions
of management is to create willingness amongst the employees to perform in the best of their

abilities. Therefore the role of a leader is to arouse interest in performance of employees in
their jobs. And the following motivation factors comes into the play of achieving this
willingness among the workforce of an organization and necessary to address these factors,
Economic Wages, job security and continuity, pensions, future prospect

Social Work environment, relationships with other employees, acceptance
Creative Achievements of individuals, job satisfaction
Controlling
Controlling consists of verifying whether everything occurs in compliance with the

plans adopted, instructions issued and principles established. Controlling ensures that there is
effective and efficient utilization of organizational resources so as to achieve the planned goals.
Controlling measures the deviation of actual performance from the standard performance,
discovers the causes of such deviations and helps in taking corrective actions
Control involves the continuous checking of performance with the plan and taking
correct actions. And also Control is related with planning without controlling is meaningless
exercise and without controlling planning is useless.
Co-ordination
The synchronization and integration of activities, responsibilities, and command and

control structures to ensure that the resources of an organization are used most efficiently in
pursuit of the specified objectives. Along with organizing, monitoring, and controlling, co-
ordination is one of the key functions of Management.
Defining the term co-ordination can be as Unification of effort between the company
personnel to ensure that declared policies are fully implemented. Of a construction project,
namely the 3 parties that were involved are client, consultant and the contractor. Client supply
the brief and funding to create what he needs in working with the consultant and consultant has
the group of architects, Qs, engineers etc. working coordinated to supply the design and
contractor carries out the work and again consultant checks the works to be in comply with the
standard provided. These all parties and persons needs to work in coordinated manner to
achieve the goal successfully.
Management Principles and Application ~ 10 ~

Communication
In business, it is a key function of management. An organization cant operate without

communication between levels, departments and employees. Communication is a crucial factor
that binds every step and stage and every personnel present in a construction process. It is one
of the important functions of a manager. It is their duty to communicate in an efficient way in
order to get the work done through employees. Importance of the communication in some areas
as follows,
Basis for decision making and planning.

Helps in smooth and efficient working of an organization.
Facilitates co-ordination.
Increases the managerial efficiency.
Communication can be in forms of verbally and as well as with tools such as drawings,
BOQs, specifications, construction programmes, Risk registers and method statements to
handle the intended work as it was planned to carry out in the proper way.
2.3 MOTIVATIONAL NEEDS OF INDIVIDUALS AND GROUPS TO

TAKE CONTROL OF BEHAVIOR, MOTIVATION AND
LEADERSHIP PERFORMANCE OF STAFF AND LABORS
Motivation the term derived from the word motive which means needs, desires, wants
or drives within the individuals. It is the process of stimulating people to actions to accomplish
the goals. In the work goal context the psychological factors stimulating the peoples behavior
can be as desire for money, success, recognition, job-satisfaction and team work etc. One of
the most important functions of management is to create willingness amongst the employees
to perform in the best of their abilities. Therefore the role of a leader is to arouse interest in
performance of employees in their jobs.
As described above in the theories of managements, Maslows hierarchy of needs and

Herzbergs two factors theories addressed the motivational needs of employees within an
organization to achieve their best. Human behavior is goal-directed. Motivation cause goal-
directed behavior. It is through motivation that needs can be handled and tackled purposely.
This can be understood by understanding the hierarchy of needs by manager. The needs of
individual serves as a driving force in human behavior.
Lets consider the individual motivational needs of employees in the Green building
company. Once a top of the range construction company dropped suddenly and employees
leaving the company clearly indicates that the company does not fulfill the employee needs. In
contrast with Maslows theory, first is to satisfy the Physiological needs. These are the basic

needs of an individual which includes food, clothing, shelter, air, water, etc. These needs relate
to the survival and maintenance of human life. And clearly once a top company would
adequately provide employees with satisfactory salary and welfare facilities to above needs to
both staff and labors. Then comes the Safety needs- These needs are also important for human
beings. Everybody wants job security, protection against danger, safety of property, etc. as of
the companys today situation, employees may not feel that their job is secured enough. So if
the management could get the company back on its feet and undertake couple of long term
projects employees feel their job is secured and that drives their behavior towards the favor in
company and they are motivated to feel as this is their own work place that they should
improve.
Social needs- These needs emerge from society. Man is a social animal. These needs
become important. For example- love, affection, belongingness, friendship, conversation, etc.
for some time Green was drive in the basis of a family background with traditional rules and
regulations. But in todays fast phased employee oriented management practices this is not a
successful approach. It is said that young and ambitious employees left the company due to
tough management. So as an individual employees should feel they are loved by the company
and that in return motivate them to achieve the goals. Then the Maslow states the Esteem needs-
These needs relate to desire for self-respect, recognition and respect from others. Once 2
employees invented new approaches to the designing and marketing top management rejected
that ideas. Thats not how it needs to be happened. Maybe the ideas were bad, but those
employees should have been recognized and given the credit for the try they have made. And
then even though their idea was rejected they feel that their self-esteem was not damaged.
Human behavior is naturally proud of oneself and does not like to get rejected. So managers
should have identified these facts and could have kept these talented young people leaving the
company. After all these needs are satisfied and fulfilled, then maslows states about the need
of self-actualization. These are the needs of the highest order and these needs are found in those
person whose previous four needs are satisfied. These are the need of employees to know their
potential. Show off their capabilities. It is clear in that Green Company was not given this
opportunity to their employees so the employees feel unsatisfied with the work and leads to
leaving the company.
Maslow theory may state that these are for individual needs but also these could be
applicable to the construction teams. By facilitating the teams with adequate primary
necessities, providing the required safety equipment and work methods for the jobs, assigning
groups that individuals are more comfortable to work together and to make a strong bond within
the team and providing them with difficult but achievable tasks the may motivate them of
giving their best to the work and recognizing the hard work as a team but also as individuals
and rewarding construction team work motivation can be increased and they work towards the
goal while managers looking after that they achieve the organization goal.

2.4 PURPOSE OF MISSION STATEMENT, STRATEGY,
CORPORATE PLANNING, POLICY AND OBJECTIVES
MISSION STATEMENT
According to the BusinessDictionery (Anon., n.d.) Mission statement is defined as a

written declaration of an organization's core purpose and focus that normally remains
unchanged over time.
A mission statement is a used as a way of communicating the purpose of the

organization. Most of the time it will remain the same for a long period of time, but it is not
uncommon for organizations to update their mission statement. Generally happens when an
organization evolves. The mission statement should guide the actions of the organization, spell
out its overall goal, provide a path, and guide decision-making. It provides "the framework or
context within which the company's strategies are formulated." It is like a goal for what the
company wants to do for the world.
The entrepreneur encyclopedia web explains the purpose of a mission statement as The
mission statement reflects every facet of your business: the range and nature of the products
you offer, pricing, quality, service, marketplace position, growth potential, use of technology,
and your relationships with your customers, employees, suppliers, competitors and the
community." (Anon., n.d.) A mission statement defines what an organization is, why it exists,
and its reason for being. At a minimum, mission statement should define who the primary
customers are, identify the products and services produce, and describe the geographical
location in which you operate. Here is a example of a mission statement of well-established
company in construction sector, MAGA Engineering (Pvt) Ltd.
Maga is driven by excellence and is committed to ensure the satisfaction of customer

needs with utmost care by constantly providing quality products and services at affordable
prices. This creates a fair and growing return to our organization, an inspiring workplace and a
continued sense of security to our employees, thereby enabling us to contribute to society by
elevating the quality of life.
Not to be confused with mission is what organization do to achieve their vision which
is the long time target and mission is the way to achieve the target. Simply it can be taken as
the former is the cause and latter is the effect. Likewise vision of Maga Engineering is To be
the most competitive construction firm in Sri Lanka. Which is the long term target achievable
by following the mission practices.

STRATEGY
According to the business dictionary, strategy can be defined as An expression of how

an organization needs to evolve over time to meet its objectives along with
a detailed assessment of what needs to be done. Developing an organizational strategy for
a business involves first comparing its present state to its targeted state to define differences,
and then stating what is required for the desired changes to take place. (Anon., n.d.)
Strategy can be seen as a means of mobilizing an organization to get to its future.

Following are some of the benefits of incorporating strategies in organizations.
Strategy gives an organization purpose and direction, motivating trustees, staff

and volunteers to engage meaningfully with the external environment linking
in to funders and beneficiaries.
Strategy determines how an organization will match its diverse capabilities with
the needs of stakeholders, now and in the future (in order to maximize impact).
An organizations strategy will determine how it relates to the outside world
how it makes the most of opportunities, responds to change, and faces up to
threats: opportunities to innovate, improvise and improve.
A strategy makes it clear what the priorities are, and what the organizations
resources should be concentrated on delivering.
Strategy will emerge from the grassroots of an organization finding ways of
creatively integrating top down from bottom up is vital.
CORPORATE PLANNING
As stated by business dictionary, a multi-tiered approach that represents a company's

goals, objectives and future work activities. The plan expresses the strategies, milestones and
desired outcomes for the company, along with progress review practices and change
management policies can be defined as corporate planning.
Corporate planning is a systematic process used by businesses to map out a course of

action that will result in revenue growth and increased profits in terms of the whole company
rather just focusing on a project or a part of the organization.
Corporate plans are essentially business plans that seek to make improvements and
generate profits by making internal operations more effective and productive. Many corporate
plans have specific action steps that must be taken to achieve certain objectives. These steps
are clearly defined in the corporate plan and can be used as markers to check on a periodic
basis to determine whether or not sufficient progress is being made.

Purpose of setting a corporate plan can be brought as setting the strategy by analyzing
the vision mission markets and threats to the company, based on what the organization needs
to achive planning ahead the operations to achieve the targets, monitoring and controlling the
organizational operations as a whole with reviewing the progress to make amendments how
the organizational operations should change the course to success or the growth.
POLICY AND OBJECTIVES
Again according to the BusinessDictionery.com, policy can be defined as The set of

basic principles and associated guidelines, formulated and enforced by the governing body of
an organization, to direct and limit its actions in pursuit of long-term goals.
Mainly the policies define how the employees together with the organization products
and services should behave to create the expected quality and the uniformity of the delivery.
As an example workplace policy states that they providing the service with the workplace being
friendly, helping neibourhood to employees and customers, it improvise the employees
working to treat each other in friendly manner and treat customers with utmost care.
Purposes of having organizational policies can be as follows,
Convey the organizations mission and enable the execution of its strategy
Ensure employees clearly understand expectations and consequences for
misconduct
Influence employee behavior and support ethical, compliant decision-making
Create a positive and respectful workplace and organizational culture
Improve productivity and business performance
Meet all legal standards required to operate
Protect the organizations people, reputation and bottom line
Organizational objectives are short-term and medium-term goals that an organization seeks
to accomplish. An organization's objectives will play a large part in developing organizational
polices and determining the allocation of organizational resources. Achievement of objectives
helps an organization reach its overall strategic goals.
Business policies are usually guidelines which facilitate the ability of a company or
organization to reach predetermined objectives formulated by top-level management. Business
objectives are generally the endpoints associated with plans designed to reach company goals.
Both policies and business objectives may be formulated into plans as determined by a business
organization. While the objective is the end to a plan, policy is the mode and manner used to
reach each objective.

2.5 MAIN MARKETS, ACTIVITIES AND SERVICES PROVIDED BY
THE CONSTRUCTION AND BUILT ENVIORENMENT SECTOR
MARKETS
A set up where two or more parties engage in exchange of goods, services and
information is called a market. Ideally a market is a place where two or more parties are
involved in buying and selling. The two parties involved in a transaction are called seller and
buyer. The seller sells goods and services to the buyer in exchange of money. There has to be
more than one buyer and seller for the market to be competitive.
Not only the goods that will be sold or hired, they can be services, experiences, and
events and maybe people. According to the products that is selling, markets are categorized as
following,
Customer Market - In here, physical markets exists and the customers who
will be obtaining goods with the exchange of money.
Ownership Market - This type of market has investors who will buy and sell
shares, aiming a certain amount of profit.
Supply Market - Loans and fixed assets are being supplied through these types
of markets.
Labor Market - Instead of goods or services, workers are supplied in order to

obtain labor.
And then the markets can be categorized according to their accessibility,
Open Markets - Each and every personnel interested in the economical aspect can have
free access to the Open Market. But rules set by the Securities and the Exchange
Commission must be followed.
Closed Market - Contrasting to the open market, the closed market can only be
accessed by an insider. The insider and the company that is offering the stock will only
be involved.
With evolve of construction industry with technological advancements, market for

construction industry activities and services were expanded.

ACTIVITIES AND SERVICES BY CONSTRUCTION SECTOR
The construction sector is undergoing a major transformation. Construction companies are

diversifying their business activities, also becoming service providers. In this new business
model, key challenges, in addition to the commitment to sustainability, include: access to
funding sources, ensuring their margins through the efficiency of their operations and the
integration of skills and talent needed to meet the market demand.
Construction is a very diverse industry that includes activities ranging from mining,
quarrying and forestry to the construction of infrastructure and buildings, the manufacture and
supply of products, as well as maintenance, operation and disposal. Now the most of the
construction activities not being limited to building something, following are some key areas
construction and built environment sector market lies on,
Residential - Where settlements such as houses to multi-story apartment

complexes, etc. would be constructed for either private or public sector.
Industrial - It constructs industrial complexes which will manufacture or store

goods later on.
Commercial - Type of construction market is specific in building office complexes,

retail complexes and shopping malls which would have a participation in the
commercial activities of the country.
Repairs & Maintenance - Repairs & maintenances are a major subdivision

belonging to the construction industry. It comes into play at the end point where
every construction marks its completion. Due to natural and artificial reasons, every
building would start to degrade eventually and their maintenance is what will keep
them from further degradation and repairs would fix the degraded sections so the
lifetime of a building is increased.
Demolition - This type of industry will get rid of the no longer needed or no longer
functional constructions so new buildings and establishments can be put up in that
space.
Civil engineering - Civil engineering is involved in the construction industry with

its humongous influence, where, the construction industry would no longer function
without its presence. It specifically deals with the infrastructure development
projects such as roads, dams, tunnels and bridges etc.

Building Services Installation As of the sustainable construction strategies
evolving and taking place, building services holding great importance and new
markets have been opened for specialized building service installation contractors.
Consultancy Services construction and built environment activities and services

not only consist of building or renovating tangible work but also intangible works
like consultancy services are taken place in new cost effective and sustainable
construction market place.
2.6 QUALITY STANDARDS AND STATUTORY COMPLIANCE
WHAT IS QUALITY?
Construction projects are a balance between cost, time and quality. It is possible to have
high quality and low cost, but at the expense of time, and conversely to have high quality and
a fast project, but at a cost. If both time and money are restricted, then quality is likely to suffer.
High quality is not always the primary objective for the client; time or cost may be more
important. It is only realistic to specify a very high standard of quality if the budget is available
to achieve that standard. Quality in construction is defined as meeting or exceeding the
requirement of client/owners and fit to the purpose.([Online] the constructor).
Quality in construction is related to,
Satisfying the specification mentioned in the contract

Completing the project in time.
Fulfilling the owners requirement within budget.
Avoiding disputes claims
Ensuring the faculties performs its intended purpose.
As an example, Here in sri lanka if a client wants a hotel project to be completed by the
august as he intend to utilize the newly construct hotel at its full potential for the tourist season
upcoming, but contractor is not able to deliver the product in time it cannot be considered as a
quality construction though the contractor may have done a 100% satisfactory job according to
the specifications, but fails to meet the client expectations, it is not quality construction. Which
means that quality is not just building according to the specification, within the budget or just
within the time but to meet the expectations of the client.
The survey on Quality of Construction by FIDIC within Member Associations in 2001

confirmed that failure to achieve appropriate Quality of Construction is a problem worldwide.

Within the traditional processes for the procurement of construction contract, contractors, being
keen to win tenders, can do so by submitting low prices, but at the risk of not being able to
produce construction work which fulfils the specification or meets sustainable standards which
results in low quality. Lack of quality in construction is manifested in poor or non-sustainable
workmanship, and unsafe structures, and in delays, cost overruns and disputes in construction
contracts. To control these situations, methods of quality controlling and assuring have come
into the light.
QUALITY ASSURANCE
Quality assurance is a set of planned and systematic actions to ensure that products and
services comply with specified requirements. Quality assurance (QA) is a way of preventing
mistakes or defects in construction and avoiding problems when delivering solutions or
services to customers; which ISO 9000 defines as "part of quality management focused on
providing confidence that quality requirements will be fulfilled". This defect prevention in
quality assurance differs from defect detection and rejection in quality control.
Two principles included in quality assurance are, "Fit for purpose" (the product should
be suitable for the intended purpose) and "right first time" (mistakes should be eliminated). QA
includes management of the quality of raw materials, assemblies, products and components,
services related to production, and management, production and inspection processes.
The aims of QA are the standardization and auditing processes to help ensure that
products and services meet client expectations, that work is done right the first time, and that a
culture of continuous improvements is introduced which ultimately achieving the highest
quality that meets the customer expectations.
QUALITY CONTROL
Quality control is the part of quality management that ensures products and service
comply with requirements. It is a work method that facilitates the measurement of the quality
characteristics of a unit, compares them with the established standards, and analyses the
differences between the results obtained and the desired results in order to make decisions
which will correct any differences.
One way of quality control is by inspection or verification of finished products. The

aim is to filter the products before they reach the client, so that products that do not comply
with requirements are discarded or repaired. In construction industry, concrete slump tests,
cube tests are carried out for every batch, sand and aggregate crushing tests, CBR, DCP etc.
tests are all carried out before building and after an element was built to ensure its quality.

And then the statistical control can be applied to the final product or while the product
is ongoing. Which would determine the specification of materials, monitoring cost and time to
prevent cost overruns and time overruns etc.
Quality audit is the process of systematic examination of a quality system carried out
by an internal or external quality auditor or an audit team. It is an important part of
organization's quality management system and is a key element in the ISO quality system
standard.
Quality audits are typically performed at predefined time intervals and ensure that the
institution has clearly defined internal system monitoring procedures linked to effective action.
This can help determine if the organization complies with the defined quality system processes
and can involve procedural or results-based assessment criteria.
QUALITY STANDARDS
When the aim is to guarantee the uniformity of a system, process or product, reference
patterns are established in documents called standards or norms.
If some construction company working according to the quality standards then the
customer can trust that construction company that they are doing their construction properly.
And not only that, customer can get many advantages from construction companies who are
working according to the quality standards. Quality standards are most useful thing to build
good understanding with the customer and the construction company. It also will improve the
construction company demand.
Following are some of the standards internationally accepted in terms of quality

management, set by the International Standardization Organization (ISO),
ISO 9000 family standards, are the most widespread and generally accepted quality
standards in developed countries and adapted worldwide.
ISO 9000: Quality management.

ISO 9001: Quality management systems - Requirements.
ISO 9004: Managing for the sustained success of an organization -- A quality
management approach.
ISO 19011: Guidelines on internal and external audits of quality management
systems.
ISO 14001: Gives requirements for an environmental management system, to
enable an organization to develop a policy and objectives that take into
account legislative requirements and information about significant
environmental impacts.

STATUATORY COMPLIANCE
Statutory Compliances implies to fulfillment of the obligations by an individual,

company or firm, as are prescribed under law (enactments, rules, regulations, notifications like
Shops& Establishment Act, Employees Provident Fund, etc.).
Purpose of statutory compliances can be described as safeguarding the employees and

the company from untoward risks by managing and consulting on issues. In contrast of
construction or the buildings, it can be safeguarding the workers, built environment and the
clients.
In Sri Lanka, Urban development Council is the main body governing and monitoring
the statutory compliances of the buildings and there are numerous number of acts which have
been enacted.
Zoning Regulations
Submissions of plans for approval
Planning regulations
Building regulations open spaces, space from rear and front, boundary
clearance
Space inside buildings schools, hotels, hospitals have different set of rules
Lights and ventilation
Sanitary
Likewise almost every aspect of building construction is covered with statutory compliances
to ensure the safety and avoid unnecessary complications. More details on building regulations
in sri lanka can be found by referring to Publication by UDA, Sri Lanka 2005 Planning and
building Regulations Made Easy and online website
http://www.buildsrilanka.com/cdp/Volume%20II.htm.
Here the Green Building Company once was top of the industry who won the national
green award in 2011 can again rise to the fame by implementing proper quality management
system with quality assurance with quality control measures and quality audits to check and
evaluate the performance. As the world is moving forward, management needs to understand
that it is necessary to move forward with the new sustainable technologies if they want to
achieve the quality expected in the projects. And with the proper implication of Quality
Management Systems company can easily obtain the ISO standards for the quality which would
add value to the company name and to the client attraction. And also being comply with the
rules and regulations inside the country and compliance with the labor law, employees working
will be satisfied with their job and by directing their effort through properly implemented
systems and continuous analysis and amendments would drive the company right back to the
top of the competition.

2.7 COMMUNICATION AND LIASON (CO-OPRATION) ACTIVITY
NEED TO BE ORGANIZED AND MANAGED IN A PROJECT
Communication can be described as the act of conveying intended meaning from one
entity or group to another through the use of mutually understood signs and semiotic rules.
Communication can be categorized as verbal communication which uses the voice,

words of a language to convey the message to the receiver and non-verbal communication
which uses signs, body language, facial expressions etc. In business, it is a key function of
management--an organization cannot operate without communication between levels,
departments and employees. To communication be successful it is necessary that sender uses
the right tools to communicate as well as the receiver should understand the message.
Communication plays vital role in any part of a business or an organization as it is the way of
flowing the instructions on what they need to be doing. And also in construction it plays a
major role with a use of specific tools being used in the construction industry.
IMPORTANCE OF COMMUNICATION AND CO-OPERATION IN

CONSTRUCTION INDUSTRY
M.E.L Hoezen the author of the The Problem of Communication in Construction

states that the efficiency and effectiveness of the construction process strongly depend on the
quality of communication. In the literature, author mentions four reasons why improvement
in communication are needed,
Improvement in the communication within the building team, in project teams

and between project manager and contractors, could reduce failure.
More open communication at all levels could lead to innovations and better
technical solutions.
Communication improvements in early phases of projects would positively
influence the quality as perceived by all stakeholders involved.
Improved communication during the briefing might lead to better decision
making, for example less haste in moving to solutions and better ways of
looking at the requirements first.
Construction projects are complex and risky, requiring the active participation of all
contributors such as client, consultant, contractor and community and the authorities. Co-
operation and co-ordination of activities through interpersonal and group communication are
essential in ensuring the project is completed successfully. Poor communication, lack of
consultation and lack of feedback are found as the roots of defects in many construction works.
Poor co-ordination and communication of design information lead to design problems that

cause design errors. Communication is the one aspect of the management of projects that
pervades all others.
COMMUNICATION TOOLS IN CONSTRUCTION
Construction industry uses very specific tools set varying from other trades due to the
above mentioned reasons of construction work being very complex and risky work involving
a number of parties in a project. In regard of this, same information must be flow through each
and every person in common understandable manner which would avoid disputes and claims
for a successful quality construction.
Since the inception of the idea from the client, consultants prepare Drawings based on
the client requirement to convey the message of what it is needed. And preparing BOQs and
Contract Documents to generate the how the work should be done with terms and conditions
and so to select a contractor and to convey the message that this is how the project will be
going. And then the Construction Programmes, Meetings, Site visits, Test results are all
will be used as communication tools in construction industry in order to provide information
about the works and to mitigate if someone complains that work is not upto the standards. And
also the Method Statements, Progress reports etc. too are tools that used in communication
in construction to convey the ideas of what will be doing, how it will be done, what is the
progress, quality compliance to transfer the correct information within each parties such as
Client to Consultant, Client to Contractor, Consultant to Contractor and Sub Contractors to
Contractors and Project Persons to the Community and Authorities.
To improve the effective and efficiency quality of construction, better communication

is essential and Occasional Site visits of top level of officers, Weekly progress meetings,
Monthly Board meetings, Work progress analysis, Instructing to supervisors by high rankings,
Meetings for labors, Workshops on construction processes, new technical introduction etc.
activities can be carried out within the project and organization.

2.8 ROLES AND RESPONSIBILITIES OF DIFFERENT
PROFESSIONS IN CONSTRUCTION AND MAIN CYCLE OF
WORK
The building construction industry is a wide industry that encompasses many

professionals. Most of the building defects like cracks on walls, inadequate and non-functional
facilities, flooding and dampness, poor drainage, poor safety design, poor staircases and even
collapse to mention a few could be avoided. This article analysis the different professionals,
their roles and responsibilities in avoiding defects and more in building construction. The
professionals involved with a construction work can be mainly divided into 3 phases of the
project as Design Team, Construction Team and Installation Teams. This topic will be
described accordance with that categorization,
DESIGN TEAM
The design usually consist of drawings, specifications and bills of quantities for the
relevant project and these documents are usually prepared by a Design Team which would also
be recognized as consultant team including of architects, Engineers, Quantity Surveyors, MEP
engineers etc.
The building consultancy teams bring together all above professionals and other
construction professionals, but his loyalties is with the building owner. To bridge the
knowledge gap, the owner should hire a construction consultant. The consultant should be
engaged early in the project, so the owner can utilize the consultant's services in selecting
construction professionals and contractors and in reviewing plans and budgets.
The construction consultant's role is to represent the owner and give their service of
expertise in the trade. The construction consultant is simply the client representative that there
to ensure owner will achieve what the owner has contracted for from the contractors. He is the
value-for-money bargainer! Working on behalf of the owner, the consultant can identify and
address potential construction problems in the design stages and, as an independent party, may
suggest cost saving or time saving alternatives and to evaluate suggestions made by the other
parties.
The Architect
Person who plans, designs and oversees the construction of buildings called
architect. He is qualified to design and provide advice on both aesthetic and technical on built
objects. Architects are licensed professional trained in the building design and develop the
concept for structures and turn it into images and plans. They create the overall aesthetic look
of the building.

The role of the architect isnt end in the design stage. During the construction
he must visit and look whether the contractors follow the design, use specified materials and
the quality of the work. Architects should provide various designs, prepare drawings and report
presenting ideas to the client based on his needs.
The Clerk of Works
The clerk of works is employed directly by the client, under the direction of
architect, who will want assurance that a contractor is producing a building that meets
specification in terms of both materials and workmanship. The clerk of works also reports to
the architect on progress of the construction works. Clerks of works do not issue instructions
and do not have authority to impose variations or changes to the design but will need to inspect
the works as it proceeds and hence need to visit the site frequently
Consulting Engineer
Due to the high degree of specialist knowledge required in certain areas of

building, and normally a member of the Association of Consulting Engineers (ACE), which is
voluntary and a non- statutory body that regulates and promotes standards of excellence.
Consulting Engineer Responsibilities.
o Provide subject matter expertise to all clients for all engineering

activities and assist groups for same.
o Evaluate all design for subsystem components and monitor all
activities.
o Participate in various design review meetings with engineering
department.
o Minister all complex problems and design effective resolutions for
same and coordinate with customer management foe same.
Structural Engineer
Structural Engineering is concerned with the research, planning, design,

construction, inspection, monitoring, maintenance, rehabilitation and demolition of permanent
and temporary structures, as well as structural systems and their components. It also considers
the technical, economic, environmental, aesthetic and social aspects of structures.
After the architectural design is completed, SE are the next professionals to

work on the design. He designs the structural members (slabs, beams, columns and
foundations), he designs foundations working with the Geotechnical Engineer. He determines
the sizes (thickness span and depth) of structural members and the quality, size, type and
quantity of reinforcements. SE decides on the quality and type of materials used for structural
members and the required concrete strength. He also designs the roof trusses to sustain all

expected loads and forces. He produces the structural drawings which is required for building
construction approval.
During construction he inspects materials and supervise the construction of

structural members, he gives approvals, conduct test on materials and structural integrity test
on the structure as a whole and declares the structure safe or not.
Clients Quantity Surveyor
A Quantity Surveyor is a construction industry professional who specializes in

estimating the value of construction works. This may include new buildings, renovations or
maintenance work, from early design costs to final figures. QS Works on a wide variety of
projects covering all aspects of construction such as civil, commercial, and residential and
infrastructure projects to determine the cost of such facilities.
QS estimates the project budget, analysis the effect of design changes on the budget
and the most noticeable role preparation of Bill of Quantities that assist in the tender process,
produce tender document and manage the tender process, clarify and evaluate tenders,
variations control, contract administration and assessment of claims, negotiate and settlement
of accounts, Valuing completed work and arranging for payments, expert witness report in case
of dispute. And being the clients QS his loyalty lies with the client and always tries to minimize
the cost with balancing the quality to give owner the maximum profit out of the work.
And also design team may consist of building service engineers, special trade engineers such
as electricity, plumbing, wind and civil engineers all ultimate role and responsibility is to make
the client concept a reality by utilizing their expertise effectively.
CONSTRUCTION TEAM
After the design team completed the drawings and contract documents and
necessary details, then the construction team which is the contractor comes into the play for
the production of the project. Construction team also consist of engineers, quantity surveyors ,
Construction manager, site managers etc. to ensure the work will be done accordingly to
achieve a quality outcome comply with the specifications provided and to satisfaction of the
client.
Construction team or the main contractors general obligations are described in

FIDIC document such as in clause 4.1 for the safety, 4.2 regarding safeguarding the work will
be carried out, Clause 4.6 on co-operation, clause 4.8 for safety procedures, 4.9 for quality
assurances.

Construction Manager
The construction manager is a specialist who is appointed by the contracting firm

who is in charge of all construction activities. The construction manager is responsible for;
o Plan of the works for day to day to achieve the time target.
o Organize and Resource management for the works such as the required
material will be available to the site and check their compliance with
specifications.
o Develop contacts with the staff and higher management to analyst the
project progress.
But not limited to these, all the managing works and act as the head of the
construction team will be his role.
Site Engineer
Site manager is the main body of control on site. He will be resident on the site and
deals with the actual management, supervision and control of budget, labor plants
and request for materials and personnel will be handled by him.
Civil Engineer
Civil engineers on contractors side main role is to engage in the works on site to
ensure that it will be carried accordance with the drawing and specification and
counter the issues arising while the works going on.
Contractors Quantity Surveyor
Contractors quantity surveyor loyalty lies with the contractor and he tries to
maximize the profit. He is responsible for all the financial aspects of the job from
inception to completion for the contractor.
He is responsible for all the valuation of the works and variation and all relating to
the construction and work in conjunction with client and consultants,

INSTALLATION TEAM
These are the real workmen on site. They are mostly technicians that have acquired
various skills either on the job or in various skill acquisition institutes. They have improved
skill on- the -job. They work with the various professionals carrying out their duties based on
instructions though imputing their skills.
There are various professions in the construction industry considered as skilled

labor for example masons, carpenters, electricians, iron fixers, tillers, and plumbers etc.
There are other workers that are non-skilled labors. But they are actually skilled. The
nature of their job requires little skill and they are usually non-persistence on the job. Their
range of jobs include site clearance, minor excavation and other petty site jobs.
2.9 ORGANIZATIONAL STRUCTURE
An organization is a group of people who together work to achieve a common goal. In

order to work together efficiently, the group must find the best way to organize the work that
needs to be done in order to meet the goals of the organization. Organizational structure defines
how tasks are divided, grouped, and coordinated in organizations. Organizational structure
determines how the roles, power and responsibilities are assigned, controlled, and coordinated,
and how information flows between the different levels of management and to everyone to
understand their responsibilities to the organization.
The formal structure of an organization provides two important roles for organizational
members. The structure of an organization clarifies roles for organizational members, so that
each member knows what they are supposed to do and who they report to. The structure also
dictates the amount of control an organizational member has regarding his job in the
organization.
As an example, a group when a group was appointed to make a wood shed as a storage,
if the leader would not appoint people to different jobs like to sawing of wood, polishing,
excavating roof materials, roof structure according to their expertise, a lot of time will be
wasted each and every one trying to figure what to do and job will be undone mostly and not
up to the quality. Thats what organizational structure defines. Who will do what.

KEY ELEMENTS OF SELECTING ORGANIZATIONAL STRUCTURE
The structure of an organization consists of a combination of six different elements.

Each of these elements has an impact on how the tasks are carried out in an organization.
Following is a brief description of each,
1. WORK SPECIALIZATION
How tasks are divided into separate jobs. Is a job completed by an individual,
or is it broken down to separate steps and completed by several individuals? The more
a task is broken down into small jobs, the more specialization is required by each
individual worker. High specialization results in high efficiency, but can lead to
boredom too.
2. DEPARTMENTALIZATION
Establishes how jobs are grouped together. Jobs can be grouped in many ways,
including by job function, product line, or territory.
3. CHAIN OF COMMAND
Provides a line of authority that reaches from the top of the organization to the
bottom and spells out who reports to whom in the organization.
4. SPAN OF CONTROL
Determines how many individuals a manager can efficiently and effectively

manage. Companies with wider spans of control require fewer managers and are more
efficient than companies with narrow spans of control,
5. CENTRALIZATION AND DECENTRALIZATION
This element determines where the decision making authority lies. If all the
decisions are made by top level management it is considered a centralized structure and
more the low level movement is involved with decision making, its more
decentralized.
6. FORMALIZATION
This determines to what degree that the jobs in the organization is standardized. It is a
process which managers specify in writing the responsibilities of the individual and the
organization as a whole, which leads to development of processes, relationships and
operating procedures.

ORGANIZATIONAL STRUCTURE TYPES
SIMPLE STRUCTURE
A simple organizational structure is the default operating system used by most small
businesses because it centralizes decision-making with the owner. Unlike other organizational
structures, the simple, or flat, structure doesnt have formal departments and layers of
management.
Advantages of Direct line organization
Simple to understand
It promotes fast decision making.
Tend to simplify authority, responsibility and accountability relationships.
Strong discipline.
Very flexible.
Disadvantages of Direct line organizational structure
Lack of specialization.
Concentration of authority.
Lack of communication.
Heavy burden of work.
This structure is suitable for small business where there are few subordinates.
Figure 2.9-1 Simple Organizational Structure

(Source: Google)

FUNCTIONAL STRUCTURE
A functional organizational structure is one in which an organization is divided into

different departments or functional work activities. Common functions include operations,
accounting, marketing, information technology and human resources. A level of top managers
typically oversees the work carried out in each functional area.
Advantages of functional structure
One member can work on several projects.

Simplifies training.
This structure follows principle of occupation specialization.
Disadvantages of functional structure
Reduce coordination between functions.

Over specialization.
Difficult for general manager to coordinate different departments.
Figure 2.9-2 Functional Structure (Source: Google)

DIVISIONAL STRUCTURE
A divisional organizational structure usually consists of several parallel teams focusing

on a single product or service line. Examples of a product line are the various car brands under
General Motors or Microsoft's software platforms.
A divisional organizational structure gives a larger business enterprise the ability to

segregate large sections of the company's business into semi-autonomous groups. These groups
are mostly self-managed and focused upon a narrow aspect of the company's products or
services.
Advantages of divisional structure
Performance can be directly measure.

That results in high morale among workers.
Failure of a one division would not affect others.
Greater operational flexibility
Disadvantages of divisional structure
Inter divisional co-operation is minimized

Increased operational cost
Can lead to compartmentalization which would make conflicts between subsidiaries.
Figure 2.9-3 Divisional Structure (Source: Google)

MATRIX STRUCTURE
The matrix structure is a type of organizational structure in which individuals are

grouped by two different operational perspectives simultaneously. In matrix management, the
organization is grouped by any two perspectives the company deems most appropriate.
Common organizational perspectives include function and product, function and region, or
region and product. In an organization grouped by function and product, for example, each
product line will have management that corresponds to each function.
Advantages of matrix structure
Flexible use of resources.

Fast response to change.
Efficient use in support system.
Decentralized decision making.
Improved environmental monitoring.
Disadvantages of matrix structure
High cost for administrating.

High prospect of conflict.
Excessive focus on internal relations.
Figure 2.9-4 Matrix Structure (Source: Google)

TEAM BASED STRUCTURE
The team structure in large organizations is considered a newer type of organization

that is less hierarchical, less structured, and more fluid than traditional structures (such as
functional or divisional). A team is a group of employees ideally with complementary skills
and synergistic efforts, working toward a common goal. Teams are created by grouping
employees in a way that generates a variety of expertise and addresses a specific operational
component of an organization. These teams can change and adapt to fulfill group and
organizational objectives.
Advantages of team based structure
Less management.
Improved Productivity.
Better inter relationship.
High moral of working
Decision making involves all the members. So employees feel more involvement.
Disadvantages of team based structure
Individual performance may not be recognized well.

Being decentralized, may lead to problems of management and chain of command
BOUNDRYLESS STRUCTURE
Boundaryless organizations transcend the rigid lines of bureaucracy and divisional

boundaries within a corporation and ignore the borders where the corporation itself is
separated from its markets, customers and 'stakeholders'" defines QFinance. Focusing on
fluid and adaptive behavior, these organic structures welcome and thrive on change. The
informal managerial style is well suited for intricate and non-standard work.
A boundaryless organization is a contemporary approach in organization design. It is

an organization that is not defined by, or limited to, the horizontal, vertical, or external
boundaries imposed by a predefined structure. This term was coined by former General
Electric chairman Jack Welch because he wanted to eliminate vertical and horizontal
boundaries within the company and break down external barriers between the company and
its customers and suppliers.

STRUCTURE FOR GREEN BUILDING COMPANY
Since the inception Green building company can be described as family based more
traditional approach structured company. It can be assumed that at the earlier times this was a
boundryless approached that maybe the reason of rapid growth to be one of pioneer
construction in Sri Lanka. But then with the expansion it should have followed the same path
as it is accepted in the modern world boundryless approach does work but it may seem that
they have adopted a more traditional structure as it was indicated that the top management was
very tough and not listening to new ideas of employees. This management structure is a one
aspect of the company dropping on profit.
For a suitable organizational structure for the green building project, Functional
Organizational Structure can be suggested. Due to; Green company is a construction
company which undertakes projects. And functional structure is being on of project based
structure, it allows company to deliver more quality product. As an example, concrete
department hires concrete specialized employees who would excel in concreting works of a
one project and then can be transferred to another once it is finished. And being a leading
sustainable construction company, they can implement Research and development Department
to innovate new techniques or improve the already using ones. Thats the whole function of
RnD department and employees can be specialized in the area. And also being a moderate scale
company compared to world they would not need a more complex structures as of the time
being.
2.10 COMPARISON OF PROJECT BASED ORGANIZATIONAL

STRUCTURES
Project-based organizational structures borrow from those based on hierarchies,

functions and operations. They use a matrix organization where essential company functions
are maintained in a management structure, while the work is carried out in project-based
groups that have a hierarchical structure. An employee can have one boss for project-related
work but another for promotions and benefits.
Mainly there is two types of project based organizational structures,
1. Functional Organizational Structure

2. Matrix Organizational Structure
As described in above chapter these both are used to increase the efficiency and
effective of how the resources are utilized and both have their own advantages and
disadvantages for the work.

1. FUNCTIONAL ORGANIZATIONAL STRUCTURE
In a functional structure, the functional units will undertake the various components of
a project once it is started and each of these units will be held responsible for the specific
components. Project's co-ordination will be done by the senior managers. Personnel with great
flexibility would be involved in the project, with specialized skills, depending on the capability
of the departments heads in choosing the right person most suitable for the job. Same talented
characters as technical experts can be used in several projects and after the completion of his
work in a project, he can always return to his original work. It is also an advantage for the
professionals due to the receiving of a normal career path by the functional departments.
But, due to the units having its own degree of original work, the projects can be lacking
focus. The need to fulfill the basic needs will result in neglecting the responsibilities of the
project. Adding to this, the participants will lack in motivation, leading them to conclude that
a new project will be a burden on them, where they will not benefit personally for their carrier
development.
2. MATRIX ORGANIZATIONAL STRUCTURE
Matrix organization can be defined as a hybrid format, which also adopts some of its
features from the functional organizational structure. When it concerns the project based
organizational structures, the matrix structure will adopt another facade as "Project Matrix". In
here, the project managers will have high power than the functional managers.
It is beneficial that same resources can be shared in multiple projects in this

organizational structure. It can be effective positively for the problem in having redundant staff.
Secondly, unlike in the functional organizational system, the major focus would be on project
and excelling it, due to having a formally designated project manager. This type of an
organizational structure will be much suitable when there are multiple projects to handle
because the company can make sure the resources are balanced and taken the best advantage
of, in every project simultaneously.
Following is a comparison of these 2 organizational structures.

Functional Structure Matrix Structure
Allows the employees to focus Allows high levels of knowledge

on what they are best at doing. sharing.
Simplicity High cooperation between divisions.
One employee can work in Each person will be supplying their
several positions. service for both product and
Flexibility functional divisions.
Comparably easy managing. Flexible use of resources.
Comparably less operating cost. Decision making involves lower
As a result, the organization will levels can be effective.
be highly efficient. High cost in administration.
Does not encourage knowledge Conflicts in duties.
sharing. Suit for large scale company.
Difficult for top management to
co-ordinate different sectors.
Suit for medium sized
companies.
Same as in the above chapter, based on reasons mentioned on the subject of Green Building
Company, and also accordance with the above comparison, Functional Organizational
Structure is recommended.

2.11 SUSTAINABLE CONSTRUCTION AND ENVIRONMENTAL
MANAGEMENT AND CONSERVATION ISSUES IMPACT ON
THE ORGANIZATION AND OPERATION OF A PROJECT
The worlds population continues to grow creating an increased need for more houses,
buildings, and public infrastructure. Energy consumption, waste production and water
consumption continues to increase. If resources are miss used the ability of future generations
to adequately meet their needs will be significantly reduced.
Since the industrial revolution, the world has seen rapid advancement in technology,
population growth and increase in resource use. In this century, we are recognizing the side
effects of development such as landfills, flood, global warming and others. All this happens
cause to the lack of proper planning in development stage. All this are straining the earths
capacity and ability to sustain the life on it.
The construction industry is responsible for the intensive use of energy both directly,
in the creation of buildings and infrastructure, and indirectly, in the operational phase. As well
as the carbon dioxide which is produced, a variety of other pollution is caused by construction
processes and buildings in use.
Thoughtful planning and design can have a major impact on reducing energy use and
pollution over a buildings entire lifetime. The number of more sustainable solutions is growing
rapidly and many of these can provide substantial financial savings, as well as environmental
benefits. This is particularly the case when they are considered at the earliest possible stage of
a project and where long term benefits are fully taken into account.
SUSTAINABLE CONSTRUCTION
There are many definitions for sustainable development. The world Commission on
Environment and Development (WCED) had defines the sustainable development is
development which meets the need of the present without compromising the ability of future
generation to meet their own needs (Bourdeau, 2000)
Based on above definition of development, Charles J. Kibert defines sustainable

construction as creation and responsible management of a healthy built environment based on
resource efficiency and ecological principles (Malik et al, 2002)
Sustainable construction is generally used to describe the application of sustainable

development in construction industry.

KEY PRINCIPLES OF SUSTAINABLE CONSTRUCTION
There are 6 key principles for sustainable construction, presented by Charles J.

Kibert, University of Florida,
1. Minimization of resource consumption
2. Maximize of resource reuse
3. Use Renewable and recyclable resources
4. Protect the natural environment
5. Create a healthy and non-toxic environment
6. Pursue quality in creating the built environment
As a conclusion, sustainable construction principles can be defined as the way of

creation and responsibilities management in order to achieve a healthy built.
Buildings are need for our lives. Creating a better built-environments for human life
is one of us construction professionals mission. However in order to achieve this, we need to
be paying the serious attention about the sustainability principles. It is to make our built
environment will last for centuries not decades like past few years. One of the way is to change
the linear construction process to a cyclical process as it increases the reuse and recycling and
renewed resources.
Besides that, restoring damaged and polluted environments is another way of

achieving sustainability. The idea behind improving arid lands is to improve large-scale arid
environments like deserts and making them habitable for plants, animals and human beings.
Sustainable construction also involves considering the entire life cycle of the
building, taking environmental quality, functional quality and future values into account. Also
sustainable construction also involves that allow user to continue enjoying the standards of
living that we experience today. While at the same time ensuring future generations will have
access to the goods and services needed for their survival.
Sustainable construction also promotes efficient use of resources in the design,

construction and use of building by using recycle, reuse, ecology materials and others. It
focuses on minimizing waste production, minimizing energy consumption, conserving water
resources and respecting people and the environment.

MODERN SUSTAINABLE CONSTRUCTION
Modern methods of construction are high tech and complex and need a workforce capable
of adapting to new technologies that are rapidly evolving the construction industry. Everywhere
you look in the built environment whether it is new housing developments using modern
methods of construction, such as timber frame or flat pack construction, or the rapidly
developing new clean energy systems such as solar panels or wind turbine energy production.
Modern methods of construction have developed over time due to a number of contributing
factors. And now main target of introducing the new methods is to have a faster, low cost, high
efficiency, durable and sustainable construction of buildings. Main advancement of the new
method is moving to pre fabrication process from in situ fabrication.
Moving to pre fabrication processes allows great number of benefits to construction works
such as,
Reduce the effect of weather that has the effect on the time of the construction
The need to delivery of materials is less, therefore it reduces the disruption and the
fuel consumption.
Controlled manufacture
Less defects
High quality
Less energy use
Reduced wastage
Reduced labor requirement
Improved safety
More accurate costs forecast
Use of high quality materials
Faster construction
And new emerging trend is prefabricated modules of building that would increase up the
time of construction significantly.
Moreover, new MMC are concerned with sustainable construction and the buildability to
reduce the energy consumption and reduce the construction waste.
Sustainable construction is the act of using recycled materials or replenishable resources in

the construction process. Advances in technology allow devices such as solar panels and wind
turbines to be incorporated within the design process. This provides eco-friendly solutions to
the worlds high demand of non-renewable sources of energy. A good sustainable building is
one that lasts for a long time. It must be very efficient in the way it uses resources, both in the
construction and in the energy that it consumes. For a building to stay sustainable it must be
built in a way that makes it versatile and adaptable to its desired use over its lifetime.

Following are some of the sustainable construction practices commonly used,
Green roof concept
Usage of natural insulation materials
Using lime in building techniques
Rain water harvesting systems
Usage of non-toxic paints
Reclaiming of materials
Rehabilitation of old buildings
Use of buildability techniques
Green Roofing Concept

Green roofs are the roofs that has been planted with a specific vegetation with a well-
designed sustainable method.
Figure 2.11-1 Green Roofing
Benefit of having a green roofing can be listed as,
Increasing energy efficiency. (Cooling in summer and insulation in winter)

Filtering and cooling toxins from air.
Reducing carbon dioxide emissions.
Reduce urban temperature and associated smog.
Preserving and enhancing bio-diversity.
Providing aesthetic appeal and green space using recreational opportunities.
Usage of natural insulation methods
Properly insulated building reduces the energy consumption by keeping the warm in
winter and cool in the summer. For the sake of energy efficiency, installation of insulation
materials for the building is more cost effective than the installation and the maintenance of
heating and cooling systems.

Many people tends to use insulation materials that are made from petrochemicals
including, fiberglass, mineral wool, polystyrene, polyurethane foam and multi foils because
they are inexpensive to buy and install. But they contain a wide range of chemical fire
retardants, adhesives and the energy needed in the manufacturing process is also very high.
As a sustainable alternative for insulation there are natural materials such as,
Sheep wool
Flax and hemp
Cellulose
Wood fiber
Expanded clay aggregate
Rain water harvesting systems
In houses, apartments or even in commercial buildings such as hotel widely use this
technique to collect the rain water as it can be used to cover certain water needs of the day such
as washing, watering plants, for bathrooms, etc. This technique saves a considerable amount
of water.
Figure 2.11-2 Rain Water harvesting
Usage of non-toxic paints

All the paints contain the three components, pigment, binder and a carrier. Many modern
paints are made using toxic chemical that are harmful to the environment and also to the health.
Cadmium, lead and chromium are used as the pigments, petrochemicals solvents such as
benzene, formaldehyde are used as the carriers and binders. These are very harmful to the outer
environment and also for the health of the living beings.
To overcome this issue natural paints are the only true non-toxic paint as those natural
paints does not contain VOC. Natural paints are made from the materials such as water,
vegetable oils, plant dyes and natural minerals. The binders that are used are linseed oil, clay,
lime. Chalk is used to thicken the paint and essential oil from citrus fruits are taken as the
solvents.

BENEFITS OF SUSTAINABLE CONSTRUCTION
By applying the sustainable construction, there are many benefits and advantages that
can be achieved in environmental, economic, social and health aspects. In terms of
environmental benefits, includes to improved air and water quality, reduced energy and water
consumption and reduced waste disposal. The economic benefits are arising in the long run
including, reduction in operating cost, maintenance cost and help in increasing the sales price
and rent. While the health and community benefits are achieved with enhanced occupant
comfort and health and reduced liability. To list out some of the benefits in simple manner is
as follows,
Resistance to the climatic changes
By insulating the buildings properly the heat exchange from the walls of the
buildings could be minimized. For this purpose as explained above natural materials such as,
sheep wool, wood fiber, etc. can be used.
Increase in energy efficiency
Less energy consumption, when the building is properly insulated, the need of
mechanical heating and air conditioning is minimal.
The reusing of materials also helps to reduce the consumption of energy, as the
need of manufacturing of materials of decreases.
By using of green materials also helps to save the energy as in the manufacturing
process of green materials less energy is embodied.
Use of solar panels and many open areas in buildings natural light and good
natural ventilation could be used.
Increase in Water efficiency
Through the method of rain water harvesting the rain water can be used for
washing purposes and also to water the plants, etc. From this method it reduces the amount of
water that is wasted.
Materials
Promoting use of sustainably source materials helps to conserve the environment and also for
good health
Less wastage
Reduced wastage through reuse and recycling of demolition and construction waste.

2.12 APPLICATION TO THE SCENARIO OF TASK 01
As it is stated, once a top of the line construction company currently experiencing a

huge drop in market share, employees leaving the company and due to this pushback
management getting more and more stressed and it adversely effect on the performance of the
workforce and ultimately the organization.
In the process of taking back the company up on its feet, first rule is that top
management needs to drop their traditional family based management approach and need to
have a proper understanding of modern concept of the management which were described in
foremost chapters. And then, it is said that employees leaving the company due to the tough
management and not allowing workers to be freely work, to achieve their goals. This is also
due to the traditional family based management style and Green management needs to identify
the needs of employees and get the performance organization required by the fulfilling the
basic motivational needs of employees. Which would be the application of management
theories of Maslow, Herzbergs etc. management theories. Management needs to understand
that all of these theories does not work in manner of individual but as a whole together to
achieve the goals. And then company has gone back already, so they need to incorporate proper
management process and think through what they need to be done to get back to the top. They
need to forecast, plan, organize, coordinate, control and communicate properly what they need
to do on future.
And Green Construction Company is said to be a family based traditional approached

company. They now need to drop this traditional structure and need to adapt new functional
organizational structure or suitable project based structure to maximize their managerial efforts
and maximize the work force outcome. Bring out the true potential of the loyal workforce they
already have. And being a sustainable construction company, this is one of most important
aspect of managing the workforce and bring out the creativity and potential of employees.
Basically as it seems from the past events, reason of the company falling behind the competition
is due to the bad management. If they undertake these changes, they its not impossible to climb
back up to the top position they were.

3. TASK 02
3.1 MAIN PROCUREMENT METHODS AND METHODS OF

TENDERING
3.1.1 MAIN PROCUREMENT METHODS
Procurement is the process that is used to deliver construction projects. The

procurement system establishes the roles and relationships which make up the project
organization. It establishes the overall management structure and systems. It helps shape the
overall values and style of the project. The choice of procurement system is a critical strategic
decision equaled only by the establishment of the clients objectives and deciding the nature of
the project.
A plethora of methods for procuring building projects are available to meet the needs
of clients. Deciding what method to use for a given project is a difficult and challenging task
as a clients objectives and priorities need to comply with the selected method so as to improve
the likelihood of the project being procured successfully. The decision as to what procurement
system to use should be made as early as possible and underpinned by the clients business
case for the project. The risks and how they can potentially affect the clients business should
also be considered.
In this report it is mainly focused on the procurement methods that are available and its
advantages and disadvantages. Among the various diverts of from the main procurement
methods, there is plethora of options to choose for clients requirement. Upon deciding on a
method to be used following factors are taken into the account,
External factors consideration should be given to the potential impact of

economic, commercial, technological, political, social and legal factors which
influence the client and their business, and the project team during projects
lifecycle. For example, potential changes in interest rates, changes in legislation and
so on.
Client resources a clients knowledge, the experience of the organization with
procuring building projects and the environment within which it operates will
influence the procurement strategy adopted. The degree of client involvement in the
project is a major consideration.
Project characteristics The size, complexity, location and uniqueness of the
project should be considered as this will influence time, cost and risk.
Ability to make changes Ideally the needs of the client should be identified in
the early stages of the project. This is not always possible. Changes in technology
may result in changes being introduced to a project. Changes in scope result in
increased costs and time, especially they occur during construction. It is important

at the outset of the project to consider the extent to which design can be completed
and the possibility of changes occurring.
Cost issues An assessment for the need for price certainty by the client should be
undertaken considering that there is a time delay from the initial estimate to when
tenders are received. The extent to which design is complete will influence the cost
at the time of tender. If price certainty is required, then design must be complete
before construction commences and design changes avoided.
Timing Most projects are required within a specific time frame. It is important
that an adequate design time is allowed, particularly if design is required to be
complete before construction. Assurances from the design team about the resources
that are available for the project should be sought. Planning approvals can influence
the progress of the project. If early completion is a critical factor then design and
construction activities can be overlapped so that construction can commence earlier
on-site. Time and cost tradeoffs should be evaluated.
Main procurement methods used are as follows,
Traditional Method and its variations

Design and Build and variations
Management Contracts and its sub deviations
TRADITIONAL PROCUREMENT
In the traditional approach, the employer accepts that design work will generally
separate from construction, consultants are appointed for design and cost control, and the
contractor is responsible for carrying out the works. This responsibility extends to all
workmanship and materials, and includes all work by subcontractors and suppliers. The
contractor is usually selected by competitive tendering on complete information provided by
the client, but can be appointed earlier by negotiation on the basis of partial or notional
information.
The traditional method, using two-stage tendering or negotiated tendering, is sometimes

referred to as the Accelerated Traditional Method this is where the design and construction
can run in parallel to a limited extent. Whilst this allows an early start on site, it also entails
less certainty about cost.

KEY POINTS TO CONSIDER IN TRADITIONAL SYSTEM
A traditional lump sum contract requires the production of a complete set of documents
before tenders are invited. Adequate time must be allowed for this.
The traditional procurement method assumes that design will be appointed by

consultants, and it does not generally imply that the contractor has any design
obligations. If this is to be the case, express terms should be included in the contract.
As the employer appoints consultants to provide advice on all matters of design and
cost, they thereby retain total control over the design and quality required.
The contractor depends heavily upon the necessary information and instructions from
the architect being issued on time. There is a risk of claims if they are delayed.
The employer decides which specialist firms the contractor is to use, although the
contractor may require certain safeguards relating to performance.
All matters of valuation and payment are the responsibility of the employers
consultants.
If it is impossible to define precisely the quantity or nature of some of the work, it is

still possible to adopt a traditional method on the basis of approximate quantities,
provisional sums, or cost reimbursement.
ADVANTAGES AND DISADVANTAGES OF TRADITIONAL METHOD
The main advantages of using a traditional approach to procurement are:
Accountability due to a competitive selection.

Competitive equity as all tendering contractors bid on the same basis.
Design lead and the client is able to have a direct influence which can
facilitate a high level of functionality and improve the quality in the overall
design.
Price certainty at the award of the contract.
Variations (changes) to the contract are relatively easy to arrange and
manage.
A tried and test method of procurement which the market is very familiar
with.

The main disadvantages of using a traditional approach to procurement are:
Can be a timely process to produce the full contract documentation. Tenders

documents from an incomplete design can be produced but can lead to less
cost and time certainty, and may lead to disputes.
Overall project duration may be longer than other procurement methods as

the strategy is sequential and construction cannot be commenced prior to the
completion of the design.
No input into the design or planning of the project by the contractor as they
are not appointed during the design stage.
WHEN IT IS USED,
A programme allows sufficient time.
Consultant design is warranted.
A client wishes to appoint designers and contractors separately.
Price certainty is wanted before the start of construction.
Product quality is required.
Balance of risk is to be placed between the client and constructor.
DESIGN AND BUILD PROCUREMENT
With design and build procurement a contractor accepts responsibility for some or all
of the design. There should be express reference to this in the contract, and the extent of design
liability should always be set out as clearly as possible. Unless the contract states otherwise, it
seems that the liability for design is an absolute liability under which the contractor warrants
fitness for the purpose intended.
There are many variations to Design and Build procurement is available tailored to meet
the demands, following are brief of them,
Direct in this case no competition is obtained in tenders. Some appraisal of the

possible competitors may be made before tendering but only one tender is obtained.
Competitive tenders are obtained from documents that are prepared to enable
several contractors to offer competition in designs and in prices.

Develop and Build consultants design the building required to a partial stage,
often referred to as scope design, then competitive tenders are obtained from a
select list of contractors to develop and complete the design and construct the
building. The amount of consultant design can vary depending on the clients needs.
Package deal this method is often used where the contractors competing will use
a significant part of their own or another proprietary building system or they will
be constructing variations of a repetitive theme. There is limited scope for
innovation when this method is used. Some contractors may offer to find a site, to
sell, mortgage or lease their product, obtain approvals etc. at a risk to themselves or
at a charge to the client.
KEY POINTS TO CONSIDER

In design and construct contracts, in theory, there is usually a single
point of responsibility. The employer therefore has the advantage of
only on firm to deal with and one firm to blame if things go wrong.
The employer lacks control over the detailed design.
Construction work can be started early as a great deal of detailed
design can proceed in parallel.
Responsibility for completing on time rests wholly with the contractor.
There should be no risk of claims because of the allegations that
information from the employer is late.
There is greater certainty of cost.
It is always advisable to ask for information about who the contractor
intends using as a designer. Adequate professional indemnity insurance
should always be a requirement.
The employer should be advised to appoint consultants to provide
advice on the preparation of the requirements.
The requirements might include specific items or provisional sums, bit
generally it is prudent to prescribe performance criteria, so that a high
degree of reliance is placed on the contractor.
In the absence of any stipulations to the contrary, the contractors
design obligations are absolute.
It is difficult to evaluate competitive tenders realistically. Tenderers
should be informed of the criteria to be used, and whether price is
likely to be the prime consideration.
Benefits can arise from designers and estimators having to work
closely together.

ADVANTAGES AND DISADVANTAGES OF DESIGN AND BUILD
METHOD
The main advantages of using a design and construct approach to procurement are:
Client has to deal with one firm and reduces the need to commit resources and time
to contracting designers and contractors separately.
Price certainty is obtained before construction commences as clients requirements
are specified and changes are not introduced.
Use of a guaranteed maximum price with a savings option split can stimulate
innovation and reduce time and cost.
Overlap of design and construction activities can reduce project time.
Improved constructability due to contractors input into the design.
The main disadvantages of using a design and construct approach to procurement are:
Difficulties can be experienced by clients in preparing an adequate and sufficiently

comprehensive brief.
Client changes to project scope can be expensive.
Difficulty in comparing bids since each design will be different, project programme
will vary between bidders, and prices for the project will be different for each
design.
Client is required to commit to a concept design at an early stage and often before
the detailed designs are complete.
Design liability is limited to the standard contracts that are available.
WHEN IT IS USED,
Building is functional rather than prestigious.

Building is simple rather than complex, is not highly serviced and does not require
technical innovation.
Brief for scope design is likely to change.
Programme can be accelerated by overlapping design and construction activities.
Single organization is required to take responsibility and risk for design and
construction.

MANAGEMENT CONTRACTING
Several variants of management procurement forms exist, include; management

contracting, construction management and design and manage.
Based on the concept that the contractor can not only work according to a set of
drawings or produce his own drawings and precede the construction, but also has the capability
of managing the whole project from its design to the end of the finished project. Although, he
does not involve himself in design and construction process directly.
MANAGEMENT CONTRACTING
The client appoints an independent professional team, and also a management

contractor. Their involvement at pre-construction stages will be as adviser to the team, and
during construction they will be responsible for executing the works using direct works
contracts. With this type of contract it is possible to make an early start on-site and achieve
early completion. Because of its flexibility, it allows the client to change the design during
construction because drawings and matters of detail can be adjusted and finalized as the work
proceeds.
CONSTRUCTION MANAGEMENT
The management contractor is selected after a careful selection process and is paid
a management fee. The basic difference is that works contracts, although arranged and
administered by the management contractor, are direct between the client and works contractor.
Although in a sense this gives the client a greater measure of control, it also means that the
client accepts a considerable amount of risk. The management contractor is simply an agent,
and usually cannot guarantee that the project will be finished to time and cost.
CONSTRUCTION MANAGEMENT
A design and manage strategy is similar to management contracting. Under a design

and manage contract, the contractor is paid a fee and assumes responsibility, not only for works
contractors, but also for the design team.

ADVANTAGES AND DISADVANTAGES OF MANAGEMENT
PROCUREMENT
The main advantages of using a management approach to procurement are:
The client deals with only one firm, which enables improved coordination and
collaboration between designers and constructors.
Potential for time savings for the overall project as design and construction
activities are overlapped.
Under a design and manage form, the contractor assumes risk and responsibility
for the integration of the design with construction.
Works packages can be let competitively at prices that are current.
Improved constructability through constructor input into the design.
Roles, risks and responsibilities for all parties are clear.
Flexibility for changes in design.
The main disadvantages of using a management approach to procurement are:

Price certainty is not achieved until the final works package has been completed.
Informed and proactive client is required.
Poor price certainty.
Close time and information control required.
Client must provide a good quality brief to the design team as the design will not
be complete until resources have been committed to the project (Construction
management and management contracting)
Client loses direct control of design quality which is influenced by the
constructors (design and manage).
3.1.2 MAIN TENDERING METHODS
Identification of the best procedure to select the most eligible contractor is a must in
any construction process. This is termed as "Tendering" where there is not one, but a several
methods to choose the most eligible and suitable contractor to hand over the project.
The tender request document outline the organizations needs that are requesting and
interested suppliers will make a tender document to outline the offer that they are making and
by including price, schedules and their eligibility for the project or the procurement. They
also will outline the advantages over their competitors; provide information on qualifications,
competencies and experience.

There are mainly four methods of Tendering.
1. Open Tendering
2. Selective Tendering
3. Negotiated Tendering
4. Serial Tendering
OPEN TENDERING
Under open tendering the employer advertises his proposed project, and permits as
many contractors as are interested to apply for tender documents. Sometimes he calls for a
deposit from applicants, the deposit being returned on receipt of a bona fide tender.
Open tendering has been criticized for attracting tenders / expressions of interest from
large numbers of suppliers, some of whom may be entirely unsuitable for the contract and as a
result it can waste a great deal of time, effort and money. However, open tendering offers the
greatest competition and has the advantage of allowing new or emerging suppliers to try to
secure work.
SELECTIVE TENDERING
Under selective tendering the employer advertises his project and invites contractors to
apply to be placed on a selected list of contractors who will be invited to bid for the project.
Contractors applying are given a list of information they should supply about themselves in
order to pre-qualify.
The advantage to the employer is that he can select only those contractors, who have
adequate experience, are financially sound, and have the resources and skills to do the work.
Also, since only half a dozen or so contractors are selected, each contractor knows he has a
reasonable chance of gaining the contract and therefore has an incentive to study the tender
documents thoroughly and put forward his keenest price.
NEGOTIATED TENDERING
Negotiated tenders are obtained by the employer inviting a contractor of his choice to
submit prices for a project. Usually this is for specialized work or when particular equipment
is needed as an extension of existing works, or for further work following a previous contract.
Sometimes negotiated tenders can be used when there is a very tight deadline, or
emergency works are necessary. A negotiated tender has a good chance of being satisfactory
because, more often than not, it is based on previous satisfactory working together by the
employer and the contractor.

SERIAL TENDERING
Serial tendering involves the preparation of tenders based on a typical or notional bill
of quantities or schedule of works. The rates submitted can then be used to value works over a
series of similar projects, often for a fixed period of time following which the tendering
procedure may be repeated.
Serial tendering can reduce tender costs, and may encourage suppliers to submit low
rates to secure an ongoing programme of work.
3.2 CONSTITUTE OF CONTRACT AND RIGHT AND

OBLIGATIONS OF MAIN PARTIES
CONRACT
At law, a contract is a binding legal agreement voluntarily entered into by two or more
parties. Each contractual party must be a "competent person" having legal capacity. The parties
may be natural persons ("individuals") or juristic persons ("corporations"). An agreement is
formed when an "offer" is accepted.
Derived from the above section, it can be construed that a legally binding contract must
consist of six of the following elements:
1) Offer
2) Acceptance
3) Consent
4) Competency
5) Consideration
6) Legality
OFFER AND ACCEPTANCE
The word agreement means that there must be an offer by one side and an acceptance
of the offer by the person to whom the offer was made. Without both an offer and an
acceptance, there can be no consensus ad idem or a meeting of the minds which is essential to
form a contract.

CONSENT
Another key element to a contract is consent. Contracts are to be formed by the free
consent of parties. Voidability of agreement can happen when consent to an agreement is
caused by coercion, fraud, or misrepresentation, the agreement is a contract voidable at the
option of the party whose consent was so caused.
COMPETENCY
Every person is competent to contract who is of the age of majority according to the
law to which he is subject, and who is of sound mind, and is not disqualified from contracting
by any law to which he is subject. As an example a person under 18 years and a mentally insane
person cannot enter a legal contract.
CONSIDERATION
Consideration as described as ...for a lawful consideration.... in the definition is

another essential element of any valid contract. Consideration consists of either a benefit to the
promisor or a detriment to the promisee. It is a present exchange bargained for in return for a
promise. It may consist of some right, interest, profit, or benefit that accrues to one party, or
alternatively, of some forbearance, loss or responsibility that is undertaken or incurred by the
other party. It is not necessary for a contract to be supported by a monetary consideration.
LEGALITY
The Act also require a contract to be of a lawful object, which means that the objective
of the contract must be for a legal purpose. For example, a contract for illegal distribution of
drugs is not a binding contract because the purpose for which it exists is not legal.
The main parties involved in a contract can be brought as the client or the employer
and the contractor which who deliver the products. The rights responsibilities obligations on
all of these parties need to adapt are clearly identified in the contract documents and FIDIC
conditions of contracts. Following are some of the clauses of it,

EMPLOYERS RIGHTS
An employers general right in a project is to get his necessary work done through the
contractor he appointed, within the agreed time frame and with the desired quality and cost.
The employer is having the right to get notified of any project delays or disruption of
work. (FIDIC 7.1)
The employer has the right to access the site of construction and inspect works any time
with a 24 hour notice to the contractor. (FIDIC 37.1, 37.2, 37.3)
The employer has the right to decide on any additional tests than the ones provided in
the contract. (FIDIC 36.4)
The employer has the right to decide whether such tests would warranty time extension
of cost provision. (FIDIC 37.5)
The Employer has the right to issue instruction to remove, replace materials or plants
or workmanship if he thinks they are not in accordance with the contract. (FIDIC 39.1)
EMPLOYERS OBLIGATIONS
The client is mainly responsible for the information he provided to the contractor in the
tender stage. The specifications should be accurate.
To agree to test results if instructed the Contractor to carry out any test without his
presence. (FIDIC 37.3).
To give notice of any delegation of testing and inspection to any third parties. (FIDIC
37.5)
To respond to notices by the Contractor of any delay or disruption due to some drawing
or instruction from the Employer and determine time extension or cost provision for
any delay in providing necessary drawing or instruction. (FIDIC 6.3 and 6.4).
To inspect and measure works once the Contractor gives notice of readiness of the work
or part of it for inspection and measurement.
The Employer cannot delay such inspection unreasonably. (FIDIC 38.1).

CONTRACTORS RIGHTS
A contractor is having a general right to receive payment upon finishing of the project or the
scheduled work amount due. And the contractor is also having a right to obtain necessary
information from the client or clients consultant regarding the project.
To extension of time or provision of cost if any delay in delivery of drawing or

instruction from the employer due to employers negligence. (FIDIC 6.4)
If the Employer or its representative instructs the Contractor to carry out any test
without their presence, then the results of such test must be accepted by the Employer.
(FIDIC 37.3).
To obtain notice of any delegation of testing and inspection to any third parties by the
Employer. (FIDIC 37.5).
CONTRACTORS OBLIGATIONS
The Contractor will not release or communicate the drawings, specifications and other
documents to any third party without the consent of the Employer or his representative.
(FIDIC6.1)
One copy of the drawing shall be kept by the Contractor on the site and shall make it
available to Employer or his representatives at all reasonable time for inspection.
(FIDIC 6.2)
The Contractor must notify the Employer of any delay in work. (FIDIC 6.3)
The Contractor must carry out works according to any supplementary drawings or
specifications issued by the employer or its representative. (FIDIC 7.1)
Any works designed by the Contractor must be submitted to the Employer and get
approved before execution (FIDIC7.2a). Such approval shall not relieve the Contractor
of any of his responsibilities under the contract (FIDIC7.3)
The operation and maintenance manual along with drawings of completed permanent
works must be submitted to the Employer for the latters approval and use. (FIDIC7.2b)
The Contractor shall carry out the works and remedy any defects thereof with utmost
care and diligence. (FIDIC 8.1).

The Contractor shall provide all materials, plants and workmanship as specified in the
contract and in accordance with the instruction of the Employers representative.
(FIDIC 36.1 and GOB 11)
The Contractor shall supply necessary assistance, labor, electricity, fuels, apparatus and
instruments for the purpose of testing as required by the Employer at the place of
manufacture, fabrication or preparation, or on the site or at such other places as
specified in the contract. (FIDIC 36.1)
3.3 CONCEPTS OF MULTI-DICIPLINERY NON-ADVERSELY

WORKING IDENTIFIED IN LATHAM REPORT
Upon the discovery of the arising problems regarding the systematic failures and lack of growth
in construction industry of early 90s, United Kingdom Government and construction
industries commissioned Sir Michal Latham to review procurement and contractual
arrangements in the UK construction industry, aiming to tackle controversial issues facing the
industry during a period of lapse in growth as a whole. In July, 1994 he presented his findings
concerning the matter in the form of a report title Constructing the Team also known as
Latham Report'.
His findings specifically reported the inefficiencies within the industry & made a point in
showing that 'Team Work' is the best discovered solution.
His report introduced the concept of "Multi-Disciplinary Favorable Working" due to the
lacking of respect for the employees in the industry. He made his own recommendations to
make a change in the traditional practices in the industry at that time, which summed up to 53
recommendations that would increase the efficiency of the industry and minimize the wasteful
adversarial atmosphere in construction projects.
In order to make the above named changed to take place, he specifically named the
characteristics that should be present within the employees such as;
Openness.
Corporation.
Trust.
Honestly.
Commitment
Mutual understanding among team members.

The 15 recommendations of Latham Report are as below;
The government should commit itself to being a best practice client.

The private sector should get together to establish a construction clients forum.
The CIC should issue a guide to briefing for clients.
The Department of Environment should publish a simply worded construction strategy
code of practice.
A checklist of design responsibilities should be prepared.
The use of co-ordinate project information should be a contractual requirement.
The responsibilities for building services design should be clearly defined.
A set of basic principles is required on which modern contract should be based.
A complete family of interlocking contractual documents is required.
The role and duties of project managers requires to be more clearly defined.
The DoE should develop quality registers of approved contractors, sub-contractors and
consultants.
Guidance should be issued on rationalizing tender list arrangements and on partnering.
The specific efforts of BS5750 in the construction process require further investigation.
Adjudication should be the normal form of dispute resolution.
3.4 DIFFERENCE OF ESTIMATED AND ACTUAL COST AND

APPLICATION OF COST PLANNING, CASH FLOW AND
MONITORING OF CONSTRUCTION
ACTUAL COST
Actual cost is the total amount of labor costs, material costs and any directly associated
overhead cost that can be charged to a specific project and after finishing the construction
project, quantity surveyor or project manager or any team member go to the site and prepare
the actual cost of construction project.
ESTIMATED COST
Estimated cost is an expense that has been forecast and which pertains to a given
business or a project. Estimated cost is also known as the planned cost or projected cost.
Estimator is the professional who prepares cost estimates. There are different types of
estimators, whose title may be preceded by a modifier, such as building estimator, or electrical
estimator, or chief estimator. Other professional titles may also prepare estimates or contribute
to estimates, such as quantity surveyors, cost engineers.

The difference between actual cost and the estimated cost.
Actual cost Estimated cost
Making after the construction Making before start the

construction
Accuracy is 100% Accuracy is not that much
Making use of measurements Making use of architects drawings

after the site visit
Based on actual price during the Based on charges moment of

project tender
Main purpose of standard costs Estimated costs are normally used
is to serve as a tool for cost as guideline for price
control. determination, quoting the selling
price etc.
Estimated costs are the Standard costs are based upon
expressions of opinion based standard rates that are carefully
upon experience. developed and set as scientifically
as possible.
Estimating the cost of the project in the initial stage plays a major role in construction
industry. Generally today world construction projects are multibillion high rise buildings that
even the clients who are investing also take loans to invest. So everybody needs to know and
have a target of what it will be the cost of the project and needless to say money is the vital
part in the world. So saving as much as it is very important. Actual cost may differ to the
estimated cost due to the numerous reasons such as weather conditions, price fluctuations,
political instability, variations to the works etc. it is essential to identify and project future in
the estimation stage and implement a proper cost planning to the project.
APPLICATION OF COST PLANNING, COST CONTROL AND CASH FLOW

WITH CONSTRUCTION MONITORING
The cost controls starts in the businesses identifying what their costs are and evaluate
whether those costs are reasonable and affordable. Then it can look for ways to cut costs
through methods. Cost plan is document that provides to determine the accurate budget for the
custom building or renovation project.

Cost plans are generally prepared by cost consultants (often quantity surveyors). They
evolve through the life of the project, developing in detail and accuracy as more information
becomes available about the nature of the design, and then actual prices are provided by
specialist contractors, contractors and suppliers:
Initial cost appraisals (studies of options prepared during the feasibility study
stage).
Elemental cost plan (prepared during the project brief stage and carried through
to detailed design).
Approximate quantities cost plan (from the end of detailed design through to
tender).
Pre-tender estimate (prepared alongside tender documentation).
Tender pricing document (strictly speaking this is not a priced document, but is
part of the tender documentation issued to the contractor for pricing).
Contract sum (agreed with the contractor during the tender period and adjusted
during the construction period).
Contract sum analysis (a breakdown of the contract sum prepared by the
contractor on design and build projects).
Final account (agreed during the defects liability period).
Advantages of cost planning.
Reduce the unnecessary quantities Forecasting the expenses that need to spend for
the project.
Cost effectiveness.
A balanced distribution of expenditure.
Preparation of BOQ coming easier.
Enable to take more decisions earlier.
Design control benefits Save the time, money and give opportunity to suit your budget
without having any risks.
Finance made easier Cost plan is a transparent document and it gives a realistic
estimate for the project and so that we can arrange finance.
Control our costs We can measure and manage that whether the cost is below or above
the budget and avoid from the cost over runs.
Site management benefits.
Better tender selection cost plan will provide valid bench mark and save the
construction of choosing the wrong builder.

The purpose of the cost plan is to allocate the budget to the main elements of the project
to provide a basis for cost control. The terms budget and cost plan are often regarded as
synonymous. However, the difference is that the budget is the limit of expenditure defined for
the project, whereas the cost plan is the definition of what the money will be spent on and
when. The cost plan should, therefore, include the best possible estimate of the cash flow for
the project and should also set targets for future running costs. The cost plan should cover all
stages of the project and will be the essential reference against which the project costs are
managed.
The objective of cost control is to manage the delivery of the project within the
approved budget. Regular cost reporting will facilitate, at all times, the best possible estimate
of:
Established project cost to date.
Anticipated final cost of the project.
Future cash flow.
In addition cost reporting may include assessments of:
Ongoing risks to costs.

Costs in the use of the completed facility.
Potential savings.
Monitoring expenditure to any particular date does not exert any control over future
expenditure and, therefore, the final cost of the project. Effective cost control is achieved when
the whole of the project team adopts the correct attitude to cost.
The cash flow sets out when costs will be incurred and how much they will amount to
during the life of the project. Predicting cash flow is important in order to ensure that an
appropriate level of funding is in place and that suitable draw-down facilities are available.
Until the main contractor has been appointed, cash flow projections are likely to be
based only on agreed fee payment schedules for consultants and a simple division of the
construction cost over the likely construction period (or perhaps an allocation of construction
cost over an s-curve distribution). It is only when the main contractor is appointed, a master
programme prepared and some form of payment schedule agreed that cash flow projections
become reliable.

MONITORING OF CONSTRUCTION
Construction monitoring is a service that provides to the client to complete the works
in accordance with specified requirements.
These are factors that influencing the level of construction monitoring for a project.
Size of the project.

The Construction environment.
Quality Control.
Timeliness and meeting targets.
Negotiations, suppliers and supplier performance.
Health and Safety.
Costing.
Materials.
Importance of the project.
Complexity of the work.
Experiences and skills of the quality management of the constructor.
Following professionals are actively engaging in the monitoring process,
The architect.
Quantity surveyor.
Project Manager
Construction Managers
Accountants monitoring the general expenses.
Engineering consultants etc.
Monitoring Techniques.
Work Breakdown Structure (WBS)
Gantt chart
Arrow diagram or critical path analysis
Progress curves.
Progress Reports.
Monthly Work Done
Test Reports
Specification Compliance Reports

3.5 CONCEPT OF SHARING BEST PRACTICE AND USE FOR
BENCHMARKING OF THE ORGANIZATION
CONCEPT OF BEST PRACTICE
Best practices is defined as the policy, systems and procedures that, at any given
time, are generally regarded by peers as the practice that delivers optimal outcome, such that
they are worthy of adoption.(Constructor, n.d)
Best Practice is the knowledge that underpins examples of achievement. We can take
this knowledge, share it and implement it throughout the construction industry. Over the last
decade has been a huge change in the way construction activity is being undertaken. This is not
only in the form of new technology, but also into way that construction projects are procured
and managed. This new thinking has been very successfully applied in other industries
throughout the world.
A best practice is as a standard-operating method that produces the best performance

and results. Best practices are not rules or laws. They are bendable, adaptable to individual
needs and systems. They are learning tools.
The construction Industry Institute (CII) consortium of leading owners, contractors,

suppliers, and academia interested in improving the constructed project and the capital
investment process and their mission is to improve the business effectiveness of the capital
facilities lifecycle, including safety, quality, schedule, cost, security, reliability and operability.
The CII developed many best practices. They are;
Pre-project planning.
Alignment.
Constructability.
Design effectiveness.
Materials management.
Team building
Planning for start-up.
Partnering.
Quality management
Change management.
Disputes resolution.
Zero accidents techniques.
Implementation of products.
Benchmarking.
Project delivery method.
Contracting Strategy.


There are many ways to strengthen commitment to a best-practices culture;
Incorporate strategic communications from company leadership.

Reduce the potential for conflict.
Improve Safety.
Develop good project practices.
Integrate this commitment into key messages.
Celebrate best practices.
Integrate best-practice sharing into all formal and informal meetings.
Be open to changing the operations manual to incorporate best practices.
BENCHMARKING ORGANIZATION
Benchmarking compares the standards achieved by the best & most successful
organizations to one's business, analyzing how they reached it and adopt the best practices they
have been using to achieve it. The true aim of benchmarking is to understand the company's
current position and evaluate it by relating the best practices. This will lead to identify the areas
within an organization which are not performing as expected or planned and improve them
Best practice bench marking is the process is used in management and construction
industry to evaluate various aspects of their processes in relation to best companies processes.
Dimensions typically measured are quality, time and cost. In the process of best practice
benchmarking, management identifies the best firms in their industry, or in another industry
where similar processes exist, and compares the results and processes of those studied (the
"targets") to one's own results and processes. Benchmarking should not be a one-time process.
It must be a continuous, ongoing process and benchmarking can be recognized as a tool of
measuring the performance.
Three Primary Classifications of Benchmarking
Although there are many different types of benchmarking methods such as Strategic
bench marking, Performance/Competitive bench marking, Process bench marking, Functional
bench marking, Internal bench marking, External bench marking, International bench marking,
following 3 can be set out as the primary classifications,
Internal Benchmarking
Competitive Benchmarking
Strategic Benchmarking

Internal benchmarking is used when a company already has established and proven
best practices and they simply need to share them. Again, depending on the size of the
company, it may be large enough to represent a broad range of performance (i.e., cycle time
for opening new accounts in branches coast to coast). Internal benchmarking also may be
necessary if comparable industries are not readily available.
Competitive benchmarking is used when a company wants to evaluate its position

within its industry. In addition, competitive benchmarking is used when a company needs to
identify industry leadership performance targets.
Strategic benchmarking is used when identifying and analyzing world-class

performance. This form of benchmarking is used most when a company needs to go outside of
its own industry. Six Sigma often uses Hoshin to ensure that all employees are knowledgeable
about the strategic direction for the company. Within a companys Hoshin plan, goals are
established relative to benchmarks set by world-class organizations. Often, these benchmarks
are obtained from outside industries.
Benefits of bench marking.
Becoming competitive.
Better performance in meeting customer needs and requirements.
Measuring true productivity.
Identify best practice in business process.
Establishing effective business goals and objectives.
Better performance in meeting customer needs & requirements.
Establishing effective business goals and objectives.
Measuring true productivity.
Becoming competitive.
Identifying & implementing best practice in business processes.
Bench marking examines the impacts of best practices provides the maximum opportunity to
achieve an improved return to investment. Well defined bench marking examine that best
practices provide the greatest potential for gaining break through strategies which can in turn
improve the companys competitive position.

3.6 HOW SCALE AND SIZE OF THE CONTRACTS INFLUENCE
BUSINES PRACTICE WITHIN THE SITE
The scale and the size of contract highly influence the business of this sector. The size
and complexity, type and the location of the contract influences the entire business sector. The
size of the contract majorly develops the strategy for the execution of the project. If a company
is having two projects one is of high value and the other one is of lower value. Then the
company will imply more control on the high value project rather than on the lower value
project. The main reason behind this is that if the high value project gets delayed or any
unfavorable conditions rises during the project it will have higher financial impact on the
company.
To get a clear idea, lets take an example of a housing project and a road construction
project of 100km. housing project being 200 million rupees in value and road project is 2 billion
in value. Both need to be delivered in 18 months time.
The influence on the contract size for the business practice adopted by an organization
regarding above two project mainly based on the amount of works that needs to be done. Which
will directly impact on the labor and material sourcing. And on above 2 projects, definitely the
organization who does the housing project only need to handle comparably small amount of
labor and materials. So for a housing project they may adapt a team based management system
that would manage by itself and they would handle all the material requirements and labor
requirements within the site. While the road construction project also may handle by a team
based management but in a very larger scale. So they may incorporate a number of teams
dividing the sectors and there will be a higher management to oversee these teams working on
site while separate departments to supply the materials and labor. And obviously larger the
contract more work and more control more management practices an organization needs to
adapt for the very reason that same as they are doing the project, if they could not achieve the
time quality and cost constraints required to deliver the project, the damage to the organization
will be massive. Larger the contract, larger the profit but likewise larger the penalties like
liquidated damages, quality standards, labor material costs, managing cost and more over the
bad reputation if not completed properly.
And then same as in construction process, the size of the contract influence the bidding
and procurement process. Some companies only operate within a budget they pre-determined.
A well-established construction company would not try to go bidding for a contract of 10 20
million rupees. Because the revenue they get from allocating their resources to that size of a
project is simply not feasible for them. They would rather sit that out and invest in a larger
project to achieve their maximum capacity. And also same as a small starting company would
not try to apply for a multibillion rupees worth project due to the fact that they wouldnt have
the capacity to handle the required material and labors. More precisely they wouldnt have the
resources to manage it. These are only a few facts that how the size of a contract affecting the
business practice of an organization.

3.7 OPINION ON SIYATHA TRADINGS NEW OFFICE BUILDING
As of the scenario, the client which is Siytha Trading Company want to build up a new
office building on the premises they owned. The main requirement of client can be identified
as the TIME and they need the building as soon as possible in acceptable quality of course.
And it can be identified as that the client is not much worried about the cost constraints.
First of all what Siyatha trading should have done is to hire a consulting firm for the
job. That may extend the time for like week or so but hiring the consultant would have avoid
the issues they had at the end of the regarding the quality and the billing to variations and they
could had the confidence that work was followed in a standardized manner.
Regardless the Siyatha trading wanted the construction to be start early as possible in
order to achieve early delivery. So they should have adopted a procurement method for the
works. Which would minimize the risk to the client and achieve proper delivery of the building.
As of the scenario, this new building will be used as an office facility. Which would not require
much of a designing works to look prestigious but its more leaning towards the functioning.
And scenario also tells that client made various changes to the building while construction was
on going. Even its not stated, given the fact that construction was started without a drawings
or the BOQs and other cost planning and controlling procedures, changes are to be expected.
And the client largely worried about the time but not the cost. And then the client already knows
a contractor who they believe to be having the capacity and capability to construct the new
building. So when choosing the procurement method, requirements can be stated as needs to
be fast construction, should have flexibility to changes easily, and reduce the risk for the
clients side. Considering these facts compared to the above mentioned advantages and
characteristics of different procurement methods, Management Contracting Procurement
with contractor handles the design and construction is more suitable. More over reasons for
disqualifying the traditional method was that almost every traditional method involves of 3rd
party consultation which would require additional time and money for managing and time is of
the essence here. And management contracting allows more flexibility in changes within the
contract than traditional and design and build procurement methods as of cost is no issue it is
favorable to the client to have a only one company to deal with and its easier. And management
contract conditions would clearly state the responsibilities that each party should take on the
contract.
As for the tendering method or the method of offering the works, Negotiated
Tendering is more suited as the time is being the essence and company already knows a
contractor who they trust and believe to be capable of handling the works.
Combining these 2 procurement and tendering, firm would achieve faster initiation of
the project as design and construction can be parallel under go and eliminate the time and cost
requiring to hire consultants, design and tender, tender evaluation. Which is the requirement of
client.

4. TASK 03
4.1 CALCULATION AND FINDING OF CRITICAL PATH
ES(A
) 3 7 7 9
LF(A 7 9
3 7
)Aaa B \ D
A 4d 2d
0 3 9 14
A 9 14
0 3 14
A 6 9 E
3 6 5d
3d
C
3d
FF
Duration EF LS TF
Tasks ES LF (ESn
(Days) (ES + D) (LF D) (LF EF)
EFf)
A 3 0 3 3 0 0 0
B 4 3 7 7 3 0 0
C 3 3 6 9 6 3 0
D 2 7 9 9 7 0 3
E 5 9 14 14 9 0 0
For a critical activity,
ES = LS, EF = LF, Total Float = 0
So critical path is A B D E

4.2 METHODS OF WORK PLAN, MONITORING AND PROGRESS
CONTROL USED IN CONSTRUCTION PROJECT
Construction planning is a fundamental and challenging activity in the management and

execution of construction projects. It involves the choice of technology, the definition of work
tasks, the estimation of the required resources and durations for individual tasks, and the
identification of any interactions among the different work tasks. A good construction plan is
the basis for developing the budget and the schedule for work. Developing the construction
plan is a critical task in the management of construction, even if the plan is not written or
otherwise formally recorded. In addition to these technical aspects of construction planning, it
may also be necessary to make organizational decisions about the relationships between project
participants and even which organizations to include in a project. For example, the extent to
which sub-contractors will be used on a project is often determined during construction
planning.
In construction planning, primarily it will be focused on cost or the time. And there are
several programmes held from the initiation of a project to the completion to carry out the
works according to the plan. Brief description of these programmes are as follows,
Pre-tender Program.
Pre tender programmes takes place before the commencing of the project. At this stage of the
project, the contractors competing to get the contract and collect as much as possible
information regarding the contract and also about the site. It will outline the procedure in which
the project would take path in and discussions about the various conditions of the contract and
the site.
E.g: Open tendering (Design-build procurement method)
Pre-construction Program.
The pre-tender program would lay the path for the pre-construction program which would start
preparing the site for the upcoming construction work. After the contract being awarded
contractor may enter the site to make the necessary arrangements. It would be done according
to the contract documents and the drawings would supply an upper hand. The processes such
as; the site visit, the desk study and testing of soil would be conducted in this particular pre-
construction stage.
E.g: preparation of site layout plans, apply for infrastructure services, access roads etc.

Overall Program.
This program concentrates on the entire project. With the progress made in the previous two
programs (Pre-tender/Pre-construction), the newly made amends and changes would be taken
into proper consideration in this program and listed them appropriately. Planning would not
stop with just the completion of a single stage or process; thus its a continuous process.
E.g: Monitoring of cost, quality, progress, making amendments to the programme etc.
Stage program.
Program to plan which only targets one single stage. It can be a complex stage or a very simple
one and the time consummation would differ accordingly.
Eg: Demolition of the pre-existing structures within the site.
Weekly Program.
Weekly/Monthly meetings are being held with the responsible parties (client, consultants) not
limiting to those with site supervisors, foremen with the management of site. This will update
the responsible parties with the newly made changes or decisions and in result will increase the
accuracy and the effectiveness of the project.
Eg: Weekly meetings. Monthly progress meetings, special meetings on variations
MONITORING AND PROGRESS CONTROL
Construction Progress Monitoring is an inspection that ensures that proposed

construction is consistent with the funds that are being requested from the contractor.
Construction Progress Monitoring also verifies that work completed is consistent with plans
and specifications. Construction Progress Monitoring is done in conjunction with the general
contractors pay application request, prior to any disbursement. A physical site observation is
needed in order to independently verify the line item percentage completion of the construction
performed during the draw request period.
Project monitoring involves collecting the actual-progress data, and comparing them
against the relevant planned-progress data to evaluate the overall project progress at specified

cut-off dates. Inevitable issues including variations in reporting skills as well as the willingness
to record accurate data impact on the quality of the collected data. And as of these inevitable
events happens, it needs to be controlled to take the project in right track to achieve the time,
quality and cost targets to delivering the satisfactory product to the client.
PROGRESS MONITORING AND CONTROLING TOOLS USED
GANETT CHARTS
Also known as Master work programme, mainly these are time charts which indicates
which work to be completed in what time frame. It can be used to monitor the work progress
and accordingly control the work. i.e. if its indicative that concrete works are lagging behind
in the progress, manager can allocate more resources to the concreting to get the progress up
and likewise if something is overdone, resources available of that task can be distributed to
others. And these time based charts can be developed to various activities in construction.
Figure 4.2-1 Ganett Chart of Work Programme

PROGRESS REPORTS
Progress reports are another important tool which monitor the works on going and can
be used to control same as with Gannett charts. But more over progress reports may include
all the details such as cash flow details, income expenditures, and progress on a specific
activity (culverts, bridges) that can used to fully utilize the monitoring and controlling works.
INITIAL PROJECT CONTROL BUDGET
These can be mainly described as a S curves for budget controlling and distribution of
cost according to the time and tasks.
Figure 4.2-2 Project Control budget
TEST RESULTS
Various tests are carried out on a construction site to ensure the quality assurance and
monitor of the quality.
EG. Cube tests, Slumps, CBR, Asphalt Tests, DCP

4.3 SCHEDULE AND MANAGING THE SUPPLY AND
UTILIZATION OF RESOURCES
Resource requirements are usually estimated for each activity. Since the work activities
defined for a project are comprehensive, the total resources required for the project are the sum
of the resources required for the various activities. By making resource requirement estimates
for each activity, the requirements for particular resources during the course of the project can
be identified. Potential bottlenecks can thus be identified, and schedule, resource allocation or
technology changes made to avoid problems. In order to achieve this resource schedules are
being used in the construction site for the managing the supply and utilization,
1) Construction schedule
It is the format prepared for the execution of operation in the construction of a certain
project. Before the preparing the schedule charts the following calculations are done as
regards.
Various operations
Amount of work
Rate of completing work, making allowance
Weather conditions
Number of labors required
Correlations of various operations
2) Material schedule
Material schedule is schedule for material involves moving and storing of material in
any form. Construction schedule is used as a guide for preparing a material schedule
keeping in view that the material schedule be delivered at site well in advanced before
under taking a particular operation and material should not be arrange for in advance as
it may not be deteriorated damage or loss.

Figure 4.3-1 Material Procurement Schedule
3) Labor schedule
Schedule for labor will indicate the nature and quality of labor required for the
execution of different operations of different days. The advantages of preparing it are
to reduce the labor cost. This schedule is delivering from the construction schedule.
Figure 4.3-2 Labor Schedule

1) Equipment schedule
This schedule is prepared before the project is started to establish the types, quantities
and dates on which equipment needed. Therefore the same may be arranged as when
required. This is also prepared with the help of construction schedule. The construction
engineers use the maximum use of the construction equipment when reach and take out
of the project at the earliest to avoid the financial loss.
Advantages of scheduling
It will give the clear idea about the type and quantity of the material required stage of
execution of work and the duration of supply material.
It will also show the quantities and duration of various operation for which plant or can
arranged well in time so as to avoid unnecessary expenditure for keeping the plant ideal
for dates on which it may not be required.
It will help in arranging labor, both skill and unskilled as regards quantity and period
for which it may not be required.
The money required at different stages will also be known from the different dates.
The total time to complete the project from actual progress chart it can be known
whether the work is lagging behind or not it a progress is slow speeding up of the
activities can be arranged.
Can identify problems before they arise.
Provide structured approach to planning.
Forecast cash flow.
Assess resource requirements.

4.4 ORGANIZING SITE LAYOUT, RESOURCING AND
ACCOMADATION CONTRIBUTING TO MANAGEMENT
Site layout and organization are important management functions which influence all
aspects of work on a construction site - from construction methods and sequence to health,
safety, and productivity. The design of site layouts is often arbitrarily carried out without a full
evaluation of all the relevant factors. The organizational framework within which many
projects are carried out also leaves much to be desired with lack of adequate structures and
facilities for managing safety. In many cases, site and project managers tend to focus on
considerations such as optimizing productivity without adequately taking into account the
health and safety implications. This is despite the fact that there is major scope for preventing,
or minimizing, the effects of many construction site accidents through appropriate site layout
design and organization.
Techniques used to organize the layout.

Analyze the drawings deeply.
Determine the sizes of buildings and correct location..
Select necessary services for the project.
Temporary water supply.
Temporary Electrical supply.
Waste and storm water drainage.
Select necessary temporary buildings.
Site management office
Stores and deposits
Wood yard and steel yard
Changing room
Batching plants
A detailed planning of the site layout and location of temporary facilities can enable the
management to make considerable improvement by;
Minimizing travel time
Waiting time
Increasing worker morale by showing better and safer work environment.

Resources are the mean of production needs to complete a project and the resourcing
of labour, material, plant, and management must be employed efficiently to ensure a
satisfactory conclusion to a project. Effective resourcing contributes to project success in
Project Management. Management should get the right determination on resourcing.
Identifying project resource requirements at an early stage helps to ensure the smooth running
of a project.
Techniques that can use to controlling the resources.
Get a good understand about the roles and responsibilities between the parties that
involved at each stage of the construction project.
Understand the functions of management in the organization of the production stage.
Ability to identify the resources required to complete the project.
Ability to produce and interpret the bar charts and schedules used by the construction
team.
In carrying out the resourcing works, it essential to pay attention to pre order and specify
the quality required to the suppliers and minimize the travel cost.
Providing accommodation for labor and if its may for the staff would highly benefit the
work efficiency of the project. As the traveling time for worksite will be drastically reduced
and workers can commence the work immediately. And also it makes the managing of the
accommodation easier than a scattered around the site such as managers would know the
operating costs and what needs to be provided, whats broken and repairs required and
identification of health and safety risks.
As of organizing all these site management facilities, special attention needs to be

provided for prevention of health and safety risks and also vandalism and theft. Fencing, site
security huts, lighting, alarm systems needs to be provided and also safety measure needs to be
taken for fire prevention, and accommodations and other facilities should be placed in safety
manner.

4.5 PLANNING FOR CRITICAL ACTIVITIES IN A
CONSTRUCTION PROJECT
With all the planning and scheduling tools, it is vital to identify the critical activities
within a construction project and make plan for how to achieve. Usually 5 to 10% of activities
of a construction project may on the critical path where these needs to be executed and
completed within the given time frame to be on the planned work of the construction project.
Critical activities heavily depends on numerous factors such as project type, location, time of
the year, material sourcing, labor sourcing etc. it is not always the major activities that will be
critical like concreting of foundation, or laying of asphalt. It maybe the laying of geofabric to
prevent ground water or priming the road before asphalting due to time constraints. And also
critical activities are not fixed things. With the project progressing on, and with the updating
of the programmes critical tasks may be changing. Such as addition of a variation may change
the project course drastically.
Planning for these critical activities carry a same weight as well as the identification.
As an example, if its coming to the rainy season, then finishing up the foundation work is
essential and for that managers needs to plan for it since the construction beginning. Like
excavations should do rapidly, and required materials needs to be on the site in timely manner
and keeping like extra 10% of day to day material requirement is a planned work because if a
days target was achieved, but if there is more time, more work shall be done.
Likewise if considered with a road construction, as in above example, if the laying of

asphalt concrete which is basically a finishing task identified as a critical activity, managers
may plan to finish up the structural works as soon as possible and they may adapt a plan of
starting from one end appointing a structural works team to construct and then once they
progress on road works are started and the plan of tackling the project is to form a another
structure team and putting them on the other end to work from there.
As in above examples, if these critical activities were not achieved as planned, as with
concreting of foundation, once the rainy season comes the ground will be over flowing with
ground water and it may be impossible or costly to work in that condition. Which ultimately
causing the project target of delivery in time, quality and cost. Same as with without the asphalt
concrete being laid, road marking works cannot be done and same as other finishing works
which may extend the time. These examples are for the identification of the importance of the
critical activities and the importance of plan for them in a successful project completion.

5. CONCLUSION
This report developed on the subject of management principle and application in
construction industry was targeted on reaching out to basic idea of the management and what
it is importance and role in construction industry.
From the basics of what is management means to the demonstrating the application of
the theories and knowledge to construction works enlighten the true value of management.
Everyday new construction techniques will emerge, new theories of management will emerge.
Everyday new projects may start and construction works may going on. But whats truly
challenging task is to managing this vast resources available to achieve the target within a
limited time, with the quality and in the budget with complying to all health safety and legal
bounds.
Primary target of a construction is to deliver the project in satisfaction to the client.

Construction technology is the way of works are doing but the management is the core of
delivering the project.

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Available at: http://www.managementstudyguide.com/management-basics-articles.htm
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Available at: http://www.whatishumanresource.com/management-definitions-by-great-
management-scholars
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Management Principles

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Understanding of Management Principles and Their Application to the

Construction Industry and Built Environment Sector Together With Its

B. Bihan Chathuranga Fernando

A report submitted in partial fulfillment of the requirements for the

Higher National Diploma in Quantity Surveying

Lecturer: Ms. B.A.Harshi Madubashini

International College of Business and Technology

Assessment Assignment: Understanding of management principals and their

Lecturer B.A Harshi Madubashini

StudentName B.B. Chathuranga Fernando ID NG/HNDQS/10/26

DateHandedOver 17/05/2016 DateDue 05/07/2016

Assessed By(Name): B.A Harshi Madubashini

Signature: Date: / /2016

I would like to express my special gratitude and deepest appreciation to The

Furthermore, it is my great pleasure to bestow my sincere thanks to my parents and my

Management Principles and Application ~i~

Management Principles and Application ~ ii ~

Management Principles and Application ~ iii ~

Figure 2.2-1 Maslow's Hirarchy of Needs ................................................................................ 5

Management Principles and Application ~ iv ~

This report is prepared in structure of the identifying the basic principles of

Management Principles and Application ~1~

2.1 ESTABLISHED DEFINITIONS OF MANAGEMENT

Management can be introduced as the discipline of utilizing human, material,

It is difficult to give a precise definition to the term Management. Many experts

According to Peter F. Drucker, Management is a multipurpose organ that

As of the Druckers defining, management is considered as a key element or an organ

Management Principles and Application ~2~

2.2.1 Principles of Management

Management theories are implemented to help increase organizational productivity and

Douglas McGregor's theory of management, often referred to as McGregor's XY

McGregors theory is called Theory X / Theory Y. Where by:

Theory X (Authoritarian management style)

Theory Y (Participative management style)

Management Principles and Application ~3~

MASLOWS THEORY(HIRARCHY OF NEEDS)

Maslow invented the theory that there is an un-dischargeable chain of command of

Physiological needs - The lowest level of needs. Food, water, clothes,

Safety needs - A manager is providing this need by giving protection on

Social needs - Love and affection, friendship, need of acceptance and

Self-actualization needs - This is the highest level of needs. Managers who

Esteem needs - This describes the need of an individual has to occupy a

Management Principles and Application ~4~

HERZBERGS TWO FACTOR THEORY (HYGIENE MOTIVATION)

Herzberg identified two factors that to the motivation of a working place.

Motivation/satisfiers factors - Responsibilities, achievements, growth opportunities

Management Principles and Application ~5~

Worker Physical &

SCIENTIFIC MANAGEMENT (TAYLORISM)

Another established theory of management is the 'Taylor's Scientific Management

Management Principles and Application ~6~

Management as a process, management refers to a series of inter-related functions.

Figure 2.2-2 Processes of management

Management Principles and Application ~7~

Forecasting is a decision-making tool used by many businesses to help in budgeting,

Features of forecasting can be brought to light as it shows the probability of happening

The planning process; identifies the goals or objectives to be achieved, formulates

Management Principles and Application ~8~

Motivation is a social process the executive function of cultivating morale, inspiring

Figure 2.2-3 Circle of motivation

Management Principles and Application ~9~

Economic Wages, job security and continuity, pensions, future prospect

Controlling consists of verifying whether everything occurs in compliance with the