CHAPTER 2:

Organizing for Project Management

Prepared by:
DUMAGUING, Julius Dean B

Organizing for Project Management

2.1 What is Project Management?
2.2 Trends in Modern Management
2.3 Strategic Planning and Project Programming
2.4 Effects of Project Risks on Organization
2.5 Organization of Project Participants
2.6 Traditional Designer Constructor Sequence
2.7 Professional Construction Management
2.8 Owner-Builder Operation
2.9 Turnkey Operation
2.10 Leadership and Motivation for the Project Team
2.11 Interpersonal Behavior in Project Organizations
2.12 Perceptions of Owners and Contractors

2.1 What is Project Management?

Application of knowledge skills, tools, and techniques to project
activities to meet the project requirements/goals.
Project management is 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 participation satisfaction.

Supporting
Disciplines

Project
Management
General
Management

Special
Knowledge
Domains

Basic Ingredients for Project Management

 Functions of Project Management for construction:

Specifies project objectives and plans.
Maximize the efficient resource utilization.
Implementation of various operations through proper coordination and
control of planning, design, estimating, contracting and construction in the
entire process.
Development of effective communications and mechanisms for resolving
conflicts among the various participants.

 9 Distinct Areas requiring Project Manager Knowledge and Attention:

Project integration management

Project scope management
Project time management
Project cost management
Project quality management
Project human resource management
Project communications management
Project risk management
Project procurement management

2.2 Trends in Modern Management

Major developments in management reflect the acceptance to
various degrees of the ff. elements:

The Management Process Approach

The Management Science and Decision Support Approach
The Behavioral Science Approach for Human Resource Development
Sustainable Competitive Advantage

 The Management Process Approach

emphasizes the systematic study of management by identifying management
functions in an organization and then examining each in detail.
Planning, Organizing, and Controlling

President

Vice President

Vice President

Vice President

Marketing

Production

Finance

Forecasting

Sales

Tooling

Manufacturing

Fabricating

Assembling

Purchasing

Shipping

Accounting

Expediting

Receiving

Illustrative Hierarchical Structure of Management Functions

Treasury

 The Management Science and Decision Support Approach

contributes to the development of a body of quantitative methods designed
to aid managers in making complex decisions related to operations and
production.
Decision Support System: emphasis is placed on providing managers with
relevant information.
Management Science: a great deal of attention is given to defining objectives
and constraints, and to constructing mathematical analysis models in solving
complex problems of inventory, materials and production control, among
others.

 The Behavioral Science Approach for Human Resource Development

It gave importance to attitudes, behavior and performance of individuals and
groups in the organizations.
Human Factors
Needs, motivation, leadership, personality, behavior, and work groups.

 Sustainable Competitive Advantage

occurs when an organization acquires or develops a combination of attributes
that allows it to outperform its competitors.
primarily from good management strategy.

2.3 Strategic Planning and Project Programming

Strategic Planning
organization's process of defining its strategy, or direction, and making
decisions.

 Project Programming
finalize the project objectives, determine the building and user requirements,
establish a total building area, and set the scope of work.

2.4 Effects of Project Risks on Organization

Socioeconomic factors

Environmental protection
Public safety regulation
Economic instability
Exchange rate fluctuation

 Organizational relationships
Contractual relations
Attitudes of participants
Communication

 Technological problems

Design assumptions
Site conditions
Construction procedures
Construction occupational safety

2.5 Organization of Project Participants

Project Stages:
Sequential processing
Parallel processing
Staggered processing

 Two Basic Approaches to organize for project implementation:

Separation of Organization
Traditional Sequence of Design and Construction
Professional Construction Management

Integration of Organization
Owner Builder operation
Turnkey operation

 Management styles
Matrix Organization
Project Oriented Organization

 Matrix Organization
each project may be staffed by existing personnel in the functional divisions
of the organization.

 Project Oriented Organization

each project manager has autonomy in managing the project.

2.6 TRADITIONAL DESIGNER CONSTRUCTOR SEQUENCE

Used for Projects of moderate size.
Owner employs a designer (Architectural/Engineering firm) which
prepares the detailed plans and specification for the constructor
(general contractor)
Owner may select a general contractor either through competitive
bidding or through negotiation.
General contractor is responsible for the construction itself even
though the work may actually be undertaken by a number of
specialty subcontractors.

2.7 Professional Construction Management

Used for very large Projects.
Professional Construction Manager
Work with owner and the A/E firms from the beginning and make
recommendations on design improvements, construction technology,
schedules and construction economy
Propose design and construction alternatives and analyze the effects of the
alternatives.
Monitors succeeding developments of project.

2.8 Owner Builder Operation

Owner may choose to subcontract a substantial portion of the project
to outside consultants and contractors for both design and
construction.

2.9 Turnkey Operation

Owner entrust all responsibilities of design and construction to
outside consultant.
Contractor agrees to provide the completed facility on the basis of
performance specifications set forth by the owner.

2.10 Leadership and Motivation for Project Team

Project Manager
Creates an inspiring vision of the future.
Motivates and inspires people to engage with that vision.
Coaches and builds a team, so that it is more effective at achieving the vision.

Drives employees
Knows how its done
Uses people
Takes Credit
Commands
Places blame for the breakdown
- Coaches Employees
- Shows how its done
- Develops people
- Gives Credit
- Asks
- Fixes the breakdown

2.11 Interpersonal Behavior in Project Organization

Interpersonal Behavior
behavior and actions that are present in human relationships.
affects the relationships between coworker and coworker, coworker and
supervisor, and even worker and customer.
work achievement, overall happiness, and even success.
poor work performance and can hinder problem solving and conflict
resolution.

2.12 Perceptions of Owners and Contractors

Owners
All owners have the same perception of their own role, but they differ
significantly in assuming that role in practice.
The owners also differ dramatically in the amount of early planning and in
providing information in bid packages.
There is a trend toward breaking a project into several smaller projects as the
projects become larger and more complex.
Most owners recognize the importance of schedule, but they adopt different
requirements in controlling the schedule.
All agree that people are the key to project success.

 Contractors

well defined scope

extensive early planning
good leadership, management and first line supervision
positive client relationship with client involvement
proper project team chemistry
quick response to changes
engineering managers concerned with the total project, not just the
engineering elements.

 Different perception on construction project management

Common interest in creating an environment leading to successful
projects