Construction Management

I. Organization

 A group of individuals who are cooperating willingly

and effectively for a common goal.
 Directs
 Coordinates

 Controls

 Organizations are structured to promote better

management.
 The Structural Organization

 The formal arrangements that are established to

coordinate all activities in order to implement a
given strategy.

 It reflects the anatomy of a firm through its focus on

mechanisms and processes that link to the various
parts or an organization
 Structural Organization

Structural Elements of Major Elements of

an Organization: Organizational
Structures:
 Men
 Materials  Distribution of
 Machine functions
 Methods  Authority relationships

 Money  Communication and

decision process
 Policies
 Principles of Good Organization

 Principle of Objective – there should be an objective

that serve as the guide to future planning and action.
It should integrate policies, projects and programs
that enable everybody to act consistently according
to a common goal.

 Analysis – a sound judgment that attempts to build

an organization through full knowledge of the
requirements of the business.
 Principles of Good Organization

 Simplicity – the simplest organization that serve to

attain the desired objective is considered the best.
 Eliminate & retain

 Functionalism – The organization should be built

around the main functions of the business and not
around the individual.
 Principles of Good Organization

 Departmentalization – done through functions,

products, location or by projects of the organization.

 Centralization – centralized executive control or

command authority

 Limited Span of Control – pertains to the number of

subbordinates an executive can manage effectively.
 Organization and Business

 Business had been defined as an organization of

people with varied skills, which uses capital and
talents to produce goods or services.

 The system through which economic activity was

organized by those who seek to make profit.
 Management

 It is the conduct of affairs of business, moving

towards its objective through a continuous process of
improvement and optimization of resources.
 It is the process of designing and maintaining an
environment in which individuals, working together
in groups, efficiently accomplish selected aims.
 A process consisting of planning, organizing,
actuating and controlling performance to determine
and accomplish the objectives by use of people and
resources.
 Management

Summary:
Management is a systematic
program implemented to achieve
certain objectives or goal

Planning
Controlling Organizing

Directing Staffing
 Management

 Management as a process
 The process of directing and facilitating the work of people
who are organized for a common purpose.
 It is the process of combining the efforts and resources of
individuals with a common interest to achieve a desired
objective.
 Management as a function
 Application of authority

 The art of handling people

 The function of getting things done through the efforts of

others.
 Concepts of Management

1. Systematic
 by means of a “plan of action”

2. Scientific
 developing better methods of increased efficiency

3. Humanistic
 cooperation and coordination leading towards greater
accomplishment
 “human relations” (HR)
 Management Control

 Control
 To check or regulate

 To keep within limits

 Control also include activities that require restrictive

or corrective action.
 Excessive labor cost
 Equipment failure
 Disproportionate costs
 Management Control

 Also involves setting overall objective or

measurements to serve as a yardstick for allocating
resources and for evaluating performance
 Management control = executive control
 Getting the right men for the right job

 Effective communication system

 What are we going to do?

 How well are we doing?

 How can we do better?

 The Manager

 Executive Functions
 To plan – making things happen that would otherwise not
occur. It is an intellectual process, the conscious
determination and direction of action.
 To organize – improving the organization will always
improve performance.
 To direct – guiding and supervising

- Leadership and Coordination

 To control – evaluation of results vs. established standards,
and measures to correct discrepancies.
 “Success is the result of good management. And
management is the effective, efficient, economical,
utilization of the resources of man, money, materials,
machine, methods and memoranda”
 1. Decision Making

 Decision making is the fundamental process of

management.
 Decision is a judgment
 One of the main tasks of a manager

 Decision Process
 Identify the problem

 Specify objectives and goals

 Develop solutions

 Analyze and compare solutions

 Select and implement solution

 Monitor results
 2. Budgeting Time

 Time is a limiting factor, the scarcest resource, and

in the process, we call accomplishment as time.

 Characteristics of time
 Unique resource – short in supply

 Irreplaceable
 3. Employee Discipline

 Discipline is a means that the management uses to

bring employees’ behavior under control.
 It is the action of the employer against an employee
for infraction of company policies.

3 dimensions of control
a. A means of establishing awareness of the employees
regarding the proper behavior, attitude and conduct in
their jobs.
 3. Employee Discipline

3 dimensions of control
b. A means of establishing an atmosphere conducive to
working together efficiently.

c. A means of correcting or reforming employees who

commit any infraction or violation of company rules
and regulations.

*it should be made to realize that rules and regulations

are for their own benefit and not to punish them.
 3. Employee Discipline

Principles of discipline:
 Disciplinary action should not be taken unless there is an
obvious necessity for it
 Reason for disciplinary actions should be made clear
 Give the man a chance to present his side of the story
 There should be no favoritism or discrimination
 Reprimand should be given right after the occurrence of the
act.
 Forgive and forget
 Never discipline anyone in the presence of others
 The discipline that is inflicted must be just
 3. Employee Discipline

Principles of discipline:
 Disciplinary measure should be applied by the immediate
superior of the employee affected

 II. Construction Pre-planning

The pre-planning stage establishes and determine the

direction and success of any construction project.

Basic rules for construction:

1. Start before and start early
2. Make a job breakdown into components
3. Construction documents are there for your perusal
4. Take advantage of new tools which have demonstrated in
saving resources
 Planning Functions

Basic dimensions of planning:

1. Planning is a philosophy
 Looking ahead is a way of thinking, a concern about the future
effects of today’s action.
 Planning involves a state of mind that recognizes the need for
orderliness and value of direction.

2. Planning is integration
 Both long and short range plans provides a unified structure to
give purpose to the organizational units involved.
 Planning Functions

Basic dimensions of planning:

3. Planning is a process
 Goals and objectives are the most obvious consequences of the
planning process.
 The strategy that defines how much has to be done to achieve the
objectives
 The sequence of events that satisfies those strategies
 The assignment that lead to the accomplishment of the events

4. Planning is collection of procedures

 Make plans ahead, applying certain and even unique methods.
 Project Construction Management

Project construction management differs much from

management of more traditional activities. It is a unique
one-time operation with one major objective – to
accomplish a specified task in a limited time framework.

The main feature in project construction is the project

manager who oversee a variety of operations that involves
repetitive activities.
 Project Construction Manager

- Bears the ultimate responsibility for the success of the

project.
- The central figure in a project

Generally, construction projects have some elements in

common. There are problems of planning and
coordinating project activities which can be quite
formidable for large projects, which typically have
hundreds or even thousands of activities.

The project manager’s mission is to plan, coordinate,

control and accomplish
 Gantt Chart

 A Gantt chart is a horizontal bar chart developed as a

production control tool in 1917 by Henry L. Gantt.
Frequently used in project management, a Gantt chart
provides a graphical illustration of a schedule that helps to
plan, coordinate, and track specific tasks in a project.

 The Gantt chart is one of the most popular scheduling tools

in project management. It’s a horizontal bar chart that
shows progress on a project schedule.
 Gantt Chart

 Tasks are arrayed on the vertical axis while the horizontal

axis represents time. Tasks may be rolled up into summary
elements, which constitutes a number of subtasks and
represents a phase of project work.
 PERT - CPM

 PERT and CPM are the two network-based project

management techniques, which exhibit the flow and
sequence of the activities and events. Program (Project)
Evaluation and Review Technique (PERT) is appropriate
for the projects where the time needed to complete
different activities are not known.

 On the other hand, the Critical Path Method or CPM is apt

for the projects which are recurring in nature.
 PERT - CPM

 PERT and CPM are the two network-based project

management techniques, which exhibit the flow and
sequence of the activities and events. Program (Project)
Evaluation and Review Technique (PERT) is appropriate
for the projects where the time needed to complete
different activities are not known.

 On the other hand, the Critical Path Method or CPM is apt

for the projects which are recurring in nature.
 Players

 Owner – owns project upon completion of

construction
 Private – owner owns land and pays for construction of facility
 Able to accept/reject bids based on many parameters including
cost, quality, reputation
 Public – owner is government agency, public pays for facility
 Very strict method of soliciting bids, accepting bids, writing specs
 Design Professionals
 Architects, Engineers, design professionals
 Assist owner in developing plan for facility
 Make sure it is structurally sound
 Make sure all systems, utilities, facilities are integrated into design
 Responsible for applying for and obtaining all necessary permits
 Contractor
 Contracts to build project to the specs set forth in the
contract for a contracted price
 Contract will subcontract to specialty firms
 Subcontractors may subcontract further
 Project Management
 Acts as owners agent and works with designers and contractors
to insure high quality and lower cost
 Construction Project

 Has following characteristics

 Defined goal or objective

 Specific tasks not routinely performed

 Defined beginning and end

 Defined deliverables

 Resources being consumed

 To build a project on time and at cost need a good
map to get thru project
 Steps
 Establish project plan/objectives
 Do research into materials and design
 Design, estimate and schedule
 Present design to owner
 Analyze project for viability
 Adjust project plans as needed and go back to beginning
 As the project progresses more information is known
and needs to be considered
 Good early decisions provide significant benefits.
Ability to influence the project costs decreases as the
project is built
 Construction Project Categories

 Residential
 Condos, town houses, apartments, single family homes
 Owners may be development companies or individual owners
 Fairly low tech

 Building Construction Projects

 Office buildings, large apartment buildings, shopping malls,
theaters
 Dependent on economy
 Designed by architects with engineering support
 Construction Project Categories

 Heavy Construction
 Roads, bridges, dams, tunnels, water & waste water systems
 Designed by engineers
 Usually public projects

 Industrial Projects
 Steel mills, petroleum refineries, chemical processing plants, auto
production facilities
 Specialized design and construction
 Limited companies do this work
 Chronology

 Conceptual Planning
 Owner makes decisions on designers, site, and project cost and
schedule
 Iterative process – add in and delete items to get desired final
product
 Need to gather as much info as possible
 Rehab work uncovers many unknowns
 Permits are started and applications made
 Estimate +/- 25%, Schedule +/- month
 Chronology

 Schematic Design
 Actual design begins

 Looking at method and materials to use

 Value engineering

 Begin setting up work packages

 Id long lead time items

 Preliminary estimate (+/- 10%) and schedule are completed

 Chronology

 Design Development
 Final design phase

 Make system choices based on cost and schedule

 Prequalification process for bidders

 Contract documents and determination of work packages –

Woodrow Wilson Bridge
 Fair cost estimate and schedule developed
 Chronology

 Construction
 Mobilization

 Milestones

 Substantial completion

 Punchlist items

 Project Close out

 Project Risk

 Bid depends on amount of risk contractor is willing to take

 Risks
 Project Site – Neighbors, Regulatory environment, Subsurface
conditions, Economic climate
 Project – complexity, planned technologies, degree of finishes,
materials, mechanical/electrical systems
 Process – Project funding, timetable, preconstruction info,
project unknowns
 Owner Org – sophistication, org structure, decision making

 Contingency takes some of risk out

 Contract Types

 Fixed Price (Lump Sum)

 Do work for a set price
 Must have an accurate estimate for bid
 Provides owner and contractor with a number
 Risk to contractor is great, to owner minimal

 Unit Price
 Price is per unit of each item. Price includes all O&P
 Designer estimates quantities
 Contract Types

 Cost Plus Fee

 Owner reimburses actual costs plus a fee to cover O&P
 Good when scope of project is unclear

 GMP
 Owner knows max price for financing
 Clause provides a split of money if contract comes in under budget