Chapter 1 4

Republic of the Philippines
BOHOL ISLAND STATE UNIVERSITY - Main Campus

College of Engineering and Architecture
6300 Tagbilaran City
Vision: A premier Science and Technology University for the formation of world class and virtual human resource for sustainable
development in Bohol and the country Mission: BISU is committed to provide quality higher education in the arts and sciences, as well as in the professional and
technological fields; undertake research and development and extension services for the sustainable development of Bohol and the country.
ORGANIZATION & MANAGEMENT
1.1 INTRODUCTION
The driving force behind every organization is its management team wherein different teams
operate in different ways. There is no universal accurate management to define the one that is
best. Just the concept that explains why some operations were managed successfully in the past
to suggest what can be done for the future success.
The organizational structure of small enterprise may be very simple. The owner is usually the
manager and has daily contact with all the people of his organization. He establishes the policies
and assigns the job to be done and follow up on the job for the purpose of direction and
coordination. As his company grows bigger, the problem of organization for grouping, supervising
and serving operations become more complex.
The company may have the most modern plant and equipment, a highly skilled and experienced
labor force, ample materials and financial resources, yet become failure in its purpose of making
profit. There may be reasons and circumstances responsible behind its failure, and most frequent
reason is POOR MANAGEMENT.
1.2 WHAT IS ORGANIZATION?
Organization is a group of individuals who are cooperating willingly and effectively for a common
goal. It is nothing more than the mechanism by which administration directs, coordinates and
controls its business. It is indeed the very foundation of administration. To be specific,
organization seeks to know who is to do and what is to be done.
Organizations are structured to promote better management. However, it is the performance

of the people who fill the positions that determines the success of the enterprise and not the
organization design itself.
A good executive may be able to secure good results with a poor organization, and a good
organization may produce good results from a poor executive. But the ideal set up is a
combination of a good organization and good executive.
When an organization is structurally ill designed, when it passes for a makeshift arrangement,
administration is made difficult and ineffective. On the other hand, when it is logical, clear cut
and streamlined, the paramount need of administration has been met.
Apparently, there is no ideal organization designed to emulate. A management structure is only

a vehicle used to attain the objectives and goals of an
institution, and therefore, must be realistic and responsive
for the call for a change of those needs.

le development in Bohol and the country

research and
Vision: A premier Science and Technology University for the formation of world class and virtual human resource for sustainab
Mission: BISU is committed to provide quality higher education in the arts and sciences, as well as in the professional and technological fields; undertake
development and extension services for the sustainable development of Bohol and the country.
1.3 THE STRUCTURAL ORGANIZATION
Structural Organization is the formal arrangements that are established to coordinate all
activities in order to implement a given strategy. Thus, structure reflects the anatomy of a firm
through its focus on mechanisms and processes that link both vertically and horizontally the
various parts of an organization.
Structural Elements of an Organization:
1. Men. These are the different members of the organization starting from the very top
of the last workman in the enterprise
2. Materials. Represents the materials necessary in the distribution of functions or in the

attainment of its objectives.
3. Machine. The tools necessary in producing its desired output.
4. Methods. The procedures and ways used in the course of its actions.
5. Money. The financial resources of the organization.
Major Elements of Organizational Structures:
1. Distribution of functions. The functions to be performed, the groupings of functions,

and the vertical and horizontal task relationships among functions.
2. Vertical and horizontal authority relationship (who are the authority to do what).
3. Communication and decision processes. The manner in which formal decisions

are made and by whom.
4. Policies. The decision, rules or guidelines established.
The common failure of management is its failure to adopt its organizational structure, policies
and procedures, to the growth in size and complexity of the enterprise.
According to Peter Drucker, traditional structures are no longer adequate for today’s complex
organizations. A management structure is a means of attaining the objectives and goals of an
institution. Thus, should be responsive to respect needs and changes on those needs.
1.4 PRINCIPLES OF GOOD ORGANIZATION
Business organizations has conditions peculiar to itself. A set of rules cannot be laid down that
would be applicable to organizations of all enterprises. However, certain underlying principles can
be given and among them are:
1. Principle of Objective. A clear and compete definition of the objective must be known.
Any business concern or any individual must adhere to a definite purpose or aim.
For example, if the aim is to make plans and construct a project, then, the entire organization
must be built with that idea, and those in the company must think and act in terms of the quality
of work. The objectives serves as the guide to future planning and action. It integrates policies,
projects, and programs. It enables everybody to act consistently according to a common goal.
2. Analysis. A sound business judgment attempts to build an organization through full

knowledge of the requirements of the business. There should be a study as to whether the
project could be finished at the right time and at the right price the client will be able to pay.
3. Simplicity. The simplest organization that will serve to attain the desired objectives is
considered the best. All activities which are not absolutely necessary, should be eliminated, and
those retained should be handled in the simplest practical way. Creation of position should be
based on paramount necessity and all activities which do not pay in terms of pesos and centavos,
should be eliminated.
4. Functionalism. The organization should be built around the main functions of the
business and not around the individuals. A function is a normal or characteristic way of doing a
task that stands out distinctively by itself. If an organization of any concern is built around the
functions, proper distribution of work could easily be done, thus, eliminating any one man to
become so powerful and so dependable upon to be indispensable.
5. Departmentalization. In big organization, the scope of operations can be very broad,

necessitating departmentalization to achieve a smoother flow of operations. Departmentalization
can be through functions, products, location or by projects of the organization.
6. Centralization of Authority and Responsibility. In every organization there should

be centralized executive control or command authority. This is necessary in order to have
authority and responsibility definitely fixed. When there is unity of command, every person knows
what he can perform within his scope of authority, knows the things for which he is responsible
of, and also whom to report to or consult in case of problems or doubts.
7. Limited Span of Control. The number of subordinates an executive can manage

effectively.
1.5 ORGANIZATION AND BUSINESS
BUSINESS has been defined as an organization of people with varied skills, which uses capital
and talents to produce goods or services, which can be sold to others of more than their costs,
or it may be considered as; the system through which the economic activity was organized by
those who seek to make profit.
Fundamentally, most construction enterprises are selling the time of their workers, their
machineries, plant, equipment and money. The efficient use of the time and these assets will
le development in Bohol and the country

research and
determine the amount of profit to be realized, which is the primary goal of investing efforts and
capital in construction business.
To be effective, human activities can be coordinated. Efficient coordination requires much more
than an organizational framework. At the top of the foundation is coordination. This is the
attribute that integrates all the elements of an organization into an operating unity.
Experienced proved that higher accomplishment is dependent upon the interest and willing
cooperation of both the project supervisor and the workers.
CONSTRUCTION METHODS & PROJECT MANAGEMENT
Module No. 2
Objective: Students will be able to know what is Organization and Management and how
are they related to each other.
ORGANIZATION & MANAGEMENT
1.6 WHAT IS MANAGEMENT?
Management is a process. It is 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 is a function. It is the function of getting things done through the efforts of
others. It is the application of authority and the assumption of responsibility. It is an art, the art
of handling people. Management properly applied, gives individuals in the same organization the
feeling of security, of recognition, of opportunity and of belonging.
1.7 MANAGEMENT CONCEPT
Management to be effective must be systematic. Things can be done better by means of

plan of action. The plan is a step by step outline of what is to be done and who does what. Good
decisions and actions are based on the systematic application of sound principles of complete and
reliable facts, and of good practice. When management is systematic, there can be no room for
personalities, prejudices, and unfair judgment.
Management to be effective must be scientific. Scientific management is a theory of

management that analyzes and synthesizes workflows. Its main objective is improving economic
efficiency, especially labor productivity. It was one of the earliest attempts to apply science to the
engineering of processes to management. By the application of scientific method to the study and
analysis of the operations of a particular job, men have discovered the best known methods of
performing the operation. They will develop better methods of increasing production without
increasing work time and operating cost.
Management must be humanistic. Where machines may have standard of efficiency and be
set to run at a given speed, human beings, whether manager or workers, cannot be so easily
regulated to a pre-determined point of accomplishment. Humanistic management is an
approach to management theory based on the idea of human needs and human values.
Employees are seen not merely as economic assets valued primarily for their productivity but as
people with complex needs and a desire for meaningful and varied daily tasks. Human being
preferably should be led by goals they accept as justifiable, worthy and fair to all concerned.
1.8 MANAGEMENT STRUCTURES
The primary objective of management structure is to facilitate the coordination and control over
the activities of the company. No two company are identical. Thus, each company should be
studied in terms of its purpose, size and the nature of its business. In a sizable organization, there
should be a delegation of responsibility because of the following:
1. It is physically impossible for one person to control effectively all the works of a large
organization through personal contact with it.
2. No person possesses the skills necessary to guide personally the highly specialized
activities in a modern construction business. An expert on every line of activities must be
responsible of such department. An architect assumed the responsibility of planning, Civil Engineer
for civil works, Electrical Engineer for electrical work, etc.
Top management should segregate these highly specialized activities and get someone with the
knowledge and skill to coordinate and be responsible for them. The principles of delegation of
authority must extend all the way through the company from the president and general manager
to the supervisors, foreman, down to the utility workers.
Line of authority must be fixed. Everyone in the company should know to whom they are
responsible with. It must be kept clear at all times in order to facilitate the ready flow of
communication.
Line of Responsibility works in two (2) ways:
1. From the executive to the supervisor down to the workers under his jurisdiction and
conversely,
2. From the workers to those who are in authority over him.
1.9 MANAGEMENT CONTROL
Control as a verb is defined by Webster’s dictionary as to “check or regulate...to keep within

limits.” Yet, managerial control carries with it a much broader interpretation to apply; not only to
check nor command, but also to whip. Not only to regulate, but also to stimulate.
Control also includes activities that require restrictive or corrective action. For example, matters
like excessive labor cost, undue equipment failure or disproportionate fuel and maintenance costs
and the like are points that requires management action and will be accomplished only if
management is aware that the condition exist. Control however, only lead up to specific
management action specifying the necessity for action and variation from routine.
To have effective control, the manager must know by heart the reasons why his business or
enterprise exists. He must have a clear perception of the needs of the business.
A manager should be a good organizer. The organization serves as the framework for delegating
the authority and fixing responsibility from a higher to a lower executive level. Thus, the manager
should stress on getting the right men for the right job.
Effective Communication System

An effective communication system is an important element of executive control. Under this

system, adequate and reliable data are collected and disseminated to the proper persons and units
at the right time.
To the manager, information has four purposes to serve.
1. It must answer the questions what are we going to do?

2. How well are we doing?
3. How can we do better?
4. Does it serve as an aid to coordination?
1.10 THE MANAGER
The manager is a person responsible for controlling or administering all or part of a company
or similar organization. The manger as executive is the most difficult and with the highest
degree of responsibility.
Quality of an Effective Manager
1. He studies, analyzes and dissects his job.

2. He knows how to delegate the administrative details of his job.
3. He is willing to delegate to and share with his subordinates the credit of a job well done.
4. He trains and develops his men to prepare them to assume delegated work.
5. He knows how to control and plan his time.
6. He institutes controls for effective performance.
1.11 EXECUTIVE FUNCTIONS
1. To Plan
2. To Organize
3. To Direct
4. To Control
PLANNING. Is the job of making things happen that would otherwise not occur. It is an
intellectual process, the conscious determination and direction of action. Planning is economic
and essential control necessary because of uncertainty and change.
Plans may be classified as:
1. Objective of the enterprise

2. Policies
3. Procedures
4. Budget and
5. Programs
ORGANIZING. Organizing involves assigning tasks, grouping tasks into departments, delegating
authority, and allocating resources across the organization. During the organizing process,
managers coordinate employees, resources, policies, and procedures to facilitate the goals
identified in the plan. Organizing is highly complex and often involves a systematic review of
human resources, finances, and priorities.
DIRECTING. Directing is said to be a process in which the managers instruct, guide and oversee
the performance of the workers to achieve predetermined goals. It is said to be the heart of
management process. Planning, organizing, staffing have got no importance if direction function
does not take place.
In directing, two process enter the picture, leadership and coordination. Leadership and
coordination are intimately bound together. Without effective leadership, coordination cannot be
achieved.
➢ Leadership has been defined as; the process by which an executive imaginatively directs,
guides or influences the work of others in choosing and attaining particular ends.
➢ Coordination is the process whereby an executive develops an orderly pattern of group
effort among the subordinates, and secures unity of action in the pursuit of common
purpose.
How can executive coordinate efforts in their organization?
➢ Clarifying authority and responsibility

➢ Careful checking and observation
➢ Facilitating effective communication
➢ Utilizing leadership skills
CONTROLING. Controlling is one of the important functions of a manager. In order to seek

planned results from the subordinates, a manager needs to exercise effective control over the
activities of the subordinates. In other words, the meaning of controlling function can be defined
as ensuring that activities in an organization are performed as per the plans. Controlling also
ensures that an organization’s resources are being used effectively & efficiently for the
achievement of predetermined goals.
Policies and Procedures
➢ Policies are general statements, which guide or channel the thinking and action of
members of an organization.
➢ Procedures are reflection of policy. It involves the selection of a course of action and
applied to future activities. Procedures also detailed the manner in which a certain activity
must be done or accomplished.
1.12 EXECUTIVE LEADERSHIP

Executive leadership is the ability of those who manage or direct employees in an organization to
influence and guide these individuals. Those leading executive leadership processes typically
oversee such business activities as fulfilling organizational goals, strategic planning development
and overall decision making.
As a leader, the leader should be an exemplar of good personal appearance, pleasant mannerisms,
friendliness, and cheerfulness and good health so that he can command respect among his
subordinate. He must be a paragon of honesty, intelligence, enthusiasm, aggressiveness, loyalty,

vision, initiative, perseverance and decisiveness.
A leader who desires to serve, leads by example. He must possess at least a certain degree of
imagination and vision. He must have the ability to motivate and influence subordinates towards
the achievement of organizational objectives
He must have a goal, which is practical and right.
1.13. DELEGATION OF AUTHORITY

Delegation of authority is the key to effective management. Authority is the power of an
administrator to delegate functions to the next ranking executive who in turn transmit it to the
employees who are charged with the actual operations.
Delegation of a task to a subordinate is a manifestation of faith and confidence towards the ability
of a subordinate. It gives the subordinate an added responsibility and authority, which will be his
tools for growth and improvement.
1.14. RESPONSIBILITY AND AUTHORITY

DEFINED
One famous professor on administration defines responsibility as ‘Hell’ without authority. There
are people who constantly seek authority but evade responsibility. This is called buck passing.
Authority and responsibility must go together. But authority cannot be delegated completely. It
can only be shared.
The president may delegate any or part of his authority because he must share if he expect to get
the necessary council of experienced or specialized workers in the company.
Yet, even with the aid of responsible consultants, there is always that element of risk in decisions.
The true experts will be the first to admit the possibility of error in his recommendations. Who will
assume the risk? And who will make the decisions? Probably the best answer is that; decision
should result from the pooling of judgment of those who share in the responsibility and authority
under the situation in question. The president or manager is still held responsible for the action
and liabilities of the company, including the cause of strikes due to labor disputes.
Reference Book:
Project Construction Management
Second Edition by Max B.
Fajardo, Jr.
Note: Please read with comprehension

ACTIVITY: TEST YOUR

UNDERSTANDING
I. There are four (4) Executive Functions of management, Planning, Organizing, Directing and
Controlling, give a scenario that best describe these functions. Imagine yourself as the manager
of your own company. You can think of a certain project and or events you want to accomplish.
(ex; Your company won a contract to build a private pool which cost Php5,000,000 with a
contract duration of 90 calendar days. What will you do as a manager or owner during
planning, organizing, directing and controlling stage of the project? How will you utilize and
maximize your manpower, material, equipment and money for the accomplishment of your
goal?). You can write
your answer in paragraph form or tabular form or whichever way you find comfortable.
gated work if he believes that he is not prepared for the new task.
Justifiable praise and commendation should be given the
deputy for a work well done. Recognition is a basic human desire
and is an incentive for further achievement. This is one of the
means for executive development and or building morale.
1-14 Responsibility and Authority

Defined
One famous professor on administration defines responsibility
as "'Hell" without authority. There are people who constantly seek
for authority, but evade responsibility. This is called buck passing.
Authority and responsibility must go together. But authonty cannot
be delegated completely. It can only be shared.
The president may delegate any or part of his authority because

he must share if he expect to get the necessary counsel of
experienced or specialists workers in the company. On the other
hand, advises which are feed by persons who do not share in the
responsibility is of questionable value.
pROJECT CONSTRUCTION MANAGEMENT
Scanned with CamScanner
ORGANIZATION AND MANAGEMENT
Yet. even wfth the aid of responsible consultants: there is always

that element of risk in decisions. The true experts will be the first to
admit the possibility of error in his recommendations. Who will
assume the risk? And who will make the decisions? Probably the best
answer is that; decisions should result from the pooling ofjudgment
of those who share in the responsibility and authority under the
situation in question. The president or manager is still held
responsible for the action and liabilities of the company, including
the cause of strikes due to labor disputes.
1-15 Personnel Coordination

The company organization is also dependent upon the special
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abilities and skills of personnel to perform the work. This is true
particularly in the establishment of leaders, supervisors and foremen.

Two factors are significant.
l, The need for close supervisions as judged by the skill Of the workers
and the difficulty of the operations.
2, The availability of experienced and trust worthy personnel capable
of acting in supervisory capacity.
The shortage of people who are capable of leadership and supervision

of other is one of the biggest diffculties encountered by companies, and
this may be due to:
l. Lack of incentive in the supervisory positions.

2. Inadequate or ineffective recruitment of those possessing potential
leadership ability.
3. Insuffcient training of present and potential supervisory personnel.
Virtually, project construction brmg together people with
diverse knowledge and skills. Most of the workers associate with
the project for less than its work duration. Some go from one project
to another as their services is needed while others are on loan either
on a full time or part time basis from their regular job.
This is usually the case when special projects exists within the framework of
a more traditional orgamzations.
People with special knowledge and abilities are selected to work
on special project. Some workers on the other hand, are not so eager
to join a project because it may mean working for two bosses,
disruption of friendship and daily routine and risking he possibility
of being replaced on the project job. Aside from these, there is a fear
of bemg connected with unsuccessful project which might affect
adversely their career advancement. On several instances, when a
project is phased out and the project team disbanded, team members
tend to drift away from the organization for lack of new project and
the difficulty is returning back to the former jobs.
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Some workers want to associate with more dynamic envi_

rcnrnents. They like challenges of working under pressure and
solving new problems. To them, project offers an opportunity to
meet new people and increasmg future opportunities specially if
the project is a successfill one. And being connected with the
project they gained status among fellow workers aside from the
increased of their tag price. Finally, working on projects ine
saires a tcam spirit, increasing their morale and motivation to
achieve successful completion of project goals.
1-16 Scientific Management

The root of management science extend to the work of
Frederick W. Taylor, who propounded the machine model or
scientific or task management theory with the following
peculiarities:
l. Division of labor and specialization
2. Unity of command and centralization of
decision making
3. One way authority 4. Narrow span of
control.
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The origin of management science, have started from the

works of Frederick W. Taylor, an Engineer who was accredited
the title of father of scientific management. Some of those early
contributors to scientific management principles were
graduates in engineering schools but many were practitioners
who make industry a working knowledge of engineering
principles. Associated with Taylor in those early years were,
Carl G. Barth Henry L. Gantt, Stanford E. Thomson and many
others.
Barth introduced to the world the use of research

mathematics, which he merged with his knowledge of machine
tools. Gantt contributed to the recognition of worker psychology,
the development of bonus plan, and the charts used in production
scheduling. Engineering thus come to be closely associated with
the management of various enterprises. Out of this, Industrial
Engineering was bom. Today, it is a descriptive of the work of
functional staff responsible for activities such as:
I i Incentive standard
2. Methods analysis
3, Quality control
4. Production control
5. Material handling
The obvious strength of management science is its objective,

quantitative treatment of management problems. The treatment is
characterized by:
l. A statement of the problem in a mathematical form.

2. Reliance on measurable quantities such as costs and income
3. Use of computers
4. Dedication to rational decision making
Busmess capital have long accepted the benefits of engineering

expertise in connection with construction and production operations.
They have started to call engineering to supply the same scientific
approach to problems in:
l. Organization
2. Financing
3. Offce and field operations
4. Inventory and control and in fact almost all phases of the business
History has proven that Engmeers were .effective executives. This is due
to their inherent analytical mind, creativeness, conceptual, and mathematical
perceptions as their jumping board in rendering effective decisions. By
nature, Engineers are not talker, just doers. As effective executive, engineers
do not make many decisions because a decision on principle does not
as a rule take longer than a decision on symptoms and expediency.
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PROJECT CONSTRUCTION
MANAGEMENT
As an effective executive, Engineer do not need to make

many decisions because he solves generic situations through a
zule md policy. He can handle most events as cases under the
rule. nnt is by adaptation.

Engineers as executive are not paid for doing things they like
to do. They are paid for getting the right things done and most of
ad! in their specific task, that is, the making of right decisions.
To be effective is the job of the executive. He is first of all

expected to get the right things done. And this is Simply that he
is expected to be effective.
To be effective executive, Engmeers has five habits in nund.
l. They loow where their time goes. They work systematically at

managing the little of their time.
2. They focus on outward contribution. They gear their efforts
to results rather than to work.
3. They build on strengths. They do not build on weakness.
They do not start out with the things they cannot do.
4. They concentrate on a few major areas where superior

performance will produce outstanding results. They force
themselves to set pnorities. They have no choice but to do
first thing first and second things not at all.
5. Engineers finally make effective decisions. They know that
this is above all a matter of system of the right steps in the
right sequence. And they Imow that to make many
decisions fast means to make the wrong decisions. What is
needed are few. but fundamental decisions.
Over the many years smce scientific management was

introduced, specialization has certainly raised efficiency and
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productivity, although in some other ways it has also created
problems. However, in recent years, it has been proven that better
technology alone cannot produce all the needed solutions. More
reliance must be placed on people.
Work Simplifications
Rank and file employees are frequently called upon to

tribute. The term simplification is often used to designate the
cooperative project. Workers acceptance of methods
improvement activities is essential to any program, if their
enthusiastic participation can be obtained, results and savings will
be felt.
Companies, who fail to call on employees and workers for

improvements, overlook the fact that the persons who spend eight
hours or more a day on a job is perhaps the one best informed
about and most interested in the job and how it is performed.
Frequently, he can suggest changes that would elude even the
trained method person. The more people in the organization
thinking about new methods and techniques, is the better.
1-17 Humanistic Management

In this topic, the management philosophy adopted by
Konosuke Matsushita, the founder of Panasonic Corporation of
Japan was presented to know the secret of his business success.
Mr. Matsushita was asked; what is the key, to the success of

your management? Matsushita answered, there is no magic phrase
that will answer your question, our management is an chored on
the following principles:
1. We have a good staff.
2. Our policies were clear.
3. We upheld an ideal to be striven for.
4. Our chosen field of business was appropriate at the time. 5. We
did not allow factions to form within our company,
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6. We regarded the company as a public institution.
7. We followed a policy of open management.
8. We worked towards a system of management by all employees.
The first and the most important requirement for a good

management according to Matsushita, is to clarify the manage.
ment philosophy, goals, and ideals of the company. The man.
ager of the company must be clear in his own mind about what
the purpose of his company is, what its ideals are, how he in.
tends to conduct business and what concrete goals he should
establish for it in the ensuing years.
Sound business development is dependent m having such a
well thought out management plan for without such a plan one
cannot use personnel, technology and capital to their full Poten_
tial.
Humanistic management is universally applicable.

Employees who are given definite goals will clearly understand
what they should concentrate their talents on. They know what is
ex, pected and the standards by which they will be measured.
Nothing is more frustrating for a man not to have his efforts
properly evaluated. The way to motivate employees to work hard is
to present them with a definite goal and indicate precisely where their
efforts should be directed.

According to Matsushita, to have a clear management
philosophy is not enough Good management requires something
more a vision or ideal of what the company is and should be. In
addition to a short-term view of the company, it is important for
good manager to håve well defined long-range goals for the
company; what should it be like in the distant future? What
contributions should it make to society? What is its ultimate
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role? In other words, the manager must have a vision of what the
company should be 100 or even 200 years hence.
When an enterprise has ideals which command respect, and

is acceptable by all, each employee tries to improve himself
and
bring his talents into full play. To Matsushita, there are three
management philosophies, which are indispensable factors in the
success of enterprise management, namely:
1. A goal
2. An ideal
3. A vision
If these ideas are perverted to serve selfish ends: oppose Justice

and truth, and destroy the peace and prosperity of society: the
company will quickly be faced with ruin and its managers
chastised.
The next key to success is to think of an enterprise as a public

institution. Even though they be private enterprises in the formal
legal sense, nonetheless all of them should be considered to be
essentially public since the objective for any enterprise is the
contribution it makes to improve the life of the community.
The third key to success is open management. A system of open

management does not give the manager any opportunity to do
something dishonest with impunity, for he cannot hide his deeds.
Therefore, it serves as a self-control mechanism for managers who
are after all, still humans.
Any manager can do something dishonest if he has 111 rnind

to do so. Whether done unconsciously or deliberately, the result
is the same, and the employees will never be able to forgive or
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respect him. Confidence between him and his employees will be
lost and they will no longer follow his orders, as they should if the
company is to run efficiently.
A dedicated and morally upright attitude of a manager sends a

persuasive message to his employees. They too must be careful to act
properly at all tünes. Open management not only encourages
employees to work harder but also makes the manager and his
employees' realize that dishonest acts are absolutely inexcusable.
The forth key to success is the collective wisdom of all its employees.
There are distinguished managers who always think

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*hings out for and by themselves, decide by themselves, and act by
themselves. They may be dramatically successful for a while, but
in the long-term view, such dictatorial managers find difficulty in
being truly successful in management.
A dictatorial manager simply does no feel the need for tale

ented employees with decision making skills, and so good hue
man resources do not gather about him. He will not take time to
develop the talents of any employee who do happen to be under
him. He wants people to simply follow his orders nothing more.
No matter how much education and knowledge a manager

may have, or however great his ability may be, he is still only a single
individual whose wisdom has very finite bounds. If he judges things
solely in terms of his limited perception and knowledge, he will never
understand the realities of the problems facing him or the true nature of
management.
Today, in an age of high technology with its rapid change and huge
masses of data to be processed, it is quite impossible for even a
superior manager to do an adequate job solely on the basis of his
limited individual capacities.
To collect wisdom by consulting with one's employees is a

good way to increase employee morale and motivation. People
always feel happy when they are given an opportunity to express
their opinions to others and they feel even more pleased and proud
when it is a manager or superior who is soliciting their
opinion.
A manager cannot ffnction as a manager unless he can

assess data calmly and make successful projections. He cannot
allow himself to beånfluenced by his own Interests or personal
feelings, Managers as human being have prejudices and
preconceived ideas and tend to adhere to one way of thinking out
of habit.
26
Five Key Points to Success in Enterprise Management
l . To have a clear management philosophy, clear goals, and definite

ideal.
2. To manage a company with the full realization that every enterprise
is a public enterprise.
3. To practice open management
4. To collect the wisdom of the many
5, To try your best to acquire an unflappable and supremely
adaptable mind to enable you to see things as they actually
are without clinging to preconceived notions.
According to Konosuke Matsushita, for a corporation to achieve

its objective, it must above all else, succeed in cultivat- ing its
human resources.
People-first busmess philosophy. Make people before it make

products.
2, Every employee must learn to think like a business manager, and
every employee must share his knowledge with others while
striving to explore new and better ways to perform his duties. This
is management by collective wisdom.
3. 'Ihe company is looked upon as a lifetime education center or
a training center for life. It is not just simply a place where
you earn a salary. It is not simply a place where you can rise
to a more prestigious position. These are only some of the
fruits of good job performance.
There are various opinions about the nature of man, whether he is

fundarnentally good or evil, and whether he can be trusted or not. If, however,
a business manager hopes to educate his subordinates to bring out the
best in them, he must assume that people are worthy of his trust and he
must give them as much responsibility as possible,
29

Regardless Of how talented a manager may be, there is a limit

to how much he can do by himsclf. No significant level of business
success can be achieved without utilizing the collective wisdom
and talent of all employees. By being entrusted with greater
responsibilities, employees quickly develop the capacity to
assume greater responsibilities,
1-18 Directing People on the Job

To get your people to follow as you want them to do
promptly, and willingly, learn the art and techniques involved
in giving orders effectively and practice using them correctly
until you become skilled in giving orders effectively. Before
you can expect to give orders effectively, you must understand
exactly what an order is and the different kinds of order you
can use.
What is an Order?
An order is a specific message conveyed by a leader to a

follower for the purpose of influencing the follower to take desired
action. Orders are either verbal or written.
When to use verbal orders?

I. When the order is simple and the message
can be clearly heard.
2. When privacy is important
3. When the follower is intelligent and
reliable
4. When a demonstration is involved.
When to have written orders?

l. When precise figures or complicated details are involved
2. When orders must be passed on to someone else.
3. When the workers involved are slow to understand and
forgetful
4. When you want to hold the receiver strictly accountable
28

31
5. When particular sequence must be followed exactly

6. When a notice board can be suitably used.
7. When you are quoting general instructions on higher authority.
8. When a record is desirable, perhaps the order may need to be
referred tö in the future.
Whether verbal or written. every order vhll fall into one of four distinct
categories such as:
l. A request
2. A suggestion
3. Asking for volunteers
4. A direct order
Request. Here the leader asks the follower to act as the leader wishes,
James. would you close the door please?
You should use a request whenever you want specific action from the
people like these:
a. Anyone who is interested in his work. An older person, touchv.

b. Someone who welcomes responsibility
c. Someone who is interested in advancement

d. A group of experienced personnel with good morale or
e. Someone whose initiative you want to develop.
There is a lot of value to be gained from the use of carefully phrased
suggestions.
Asking for Volunteers. The leader explams what is to be done and
asks for volunteers to do it. You should ask for volunteers for:
1. Jobs that are dangerous or disagreeable

2. For extra heavy work
29
3 For jobs that require ovcrtttnc

I When you want a skilled worker to do a special unskilled
Many managers and supervisors have never thought of asking for

volunteers, or using request or suggestions, They have jus( bccn
telling peoplc what to do.
l)irect Order or Command, This is the last alternative. One

should only use a direct order under the following cir.
cumstances.
I In case of danger or extreme urgency

2. When haste is important
3. With lazy and indifferent workers, or chronic objectors
4. For careless workers
5. When all other methods have failed repeatedly
Have you noticed that the type of employee with whom you
need to resort to direct orders is usually low quality with low
morale? If you have such people, better ask yourself why you have
them.
One thing stands out very clearly. The way an order is phrased
makes a lot of difference. Here are some guiding pnnciples on how to
phrase orders effectively. It should be:
I . clear 3. concise
2. complete 4. acceptable
To make an order clear, phrase it in simple terms and repeat
anything that might be forgotten or misunderstood.
To make an order complete, answer all the questions who,

what, how, when, where and why.
To make an order concise, is to inake it short enough for the receiver

to be able to repeat it to prove that he received it fully.

30
To make an order acceptable is to ensure that the receiver will
readily act on the order as he sees it justified, practical, tactful,
challenging and accompanied by sufficient authority
a. You make your order justified when you explain why the action
must be taken. You convince the receiver that it is practical
when you explain how it is to be done. This is automatically
done if you make the order complete.
b. To make your order tactful, you deliver It in a way that will

not adversely affect your relationship with the receiver. Think
of his emotional reactions rather than your own.
c. To make the order challenging, present it to him in a way that

makes him see it is a worthwhile challenge to his knowledge,
skill and experience. This will help him enjoy carrymg out
your order.
d. Give sufficient authority. This is very important. Whenever

you give an order, make sure it is accompanied by suffcient
authority by giving the receiver enough authority to enable
him to carry out the order without being frustrated by the
refusal of others to cooperate.
To make sure you that you constantly give orders which are clear,
complete, concise and acceptable, always remember that every order
has three meanings:
l. The meaning you think you convey

2. The meaning you do convey, directly and by implication
3. The meaning the receiver thinks you convey
Only when you have clearly in mind just what an order is,

the different kinds of order you can use, and what an order requires
to be effective, can you clarify the objectives of a particular order
in your mind and decide on the kind of order you will use to
achieve this objectives.
31
1_19 How to Give Effective Orders

The way to give orders effectively, and earn yourself a repu_
tation as Compelling Leader, you must;
Clarify your objective

2. Obtain favorable attention
3. Make it simple and specific
4. Phrase it tactfully for best results
5. Explain why it should be done your way
6. Learn how much information and guidance he needs
7. Let him have it
8. Inspire his confidence in you and the correctness of your order
9. Note his readiness to act
10. Give him faith in his ability to carry it out
Obtain favorable attention. Your main objective is to get him to
do what you want him to do and like it. To achieve this, you must get
his interested attention so that he will receive and correctly
understand the complete order. Request and suggestions make it
much easier for a person to like doing what you want him to do than
a direct order.

Make it simple and specific. The order will only be clear
and concise when it is simple and specific. If he does not do just as
you want, it is at least as much your fault as his.
Phrase it tactfully for best results. Choose the most suitable
kind of orders and phrase it in the way that will produce the
desired effect.
Explain why it should be done your way. Even they don't

fully agree with the reaSomng involved, they appreciate being
told about it. They like to be treated as human being and res ent
inhuman treatment ordered to do things they don't understand.
32
Let him have it. Give the information and guidance he needs as
clearly and concisely as possible. Make surc you in• spire his
confidence in you and the correctness of your ordere
Note his readiness to act. Watch his reaction to your order to

see whether he has understood_it correctly and is ready to act on
it.
Give him faith in his ability to carry it out. If there is any

diffculty involved in his carrying out your order, he will perfonn
at his best when he believes in his ability to do it. Show your faith
in his ability. If you have any doubts about his competence, keep
them to yourself.
1-20 The Knowledge Workers

The most important resource in any organization is the human
resource. Whatever the industry the success of any business
depends on the flexibility resourcefulness and innovation
knowledge workers bring to the firm.

The report states that Innovation is vital to companies surVival
in the current Asian crises, characterized by a highly competitive
and rapidly evolving busmess environment and that a new breed of
worker called the knowledge worker is central to mnovation. They
are key to competitive differentiation. Knowledge work is complex
and includes a high degree of uncertainty and ambiguity. It also
requires employees or staff to exercise high degrees of judgment
and interpretation. Increasingly, it
also requires high degrees of teamwork as flexible teams of diverse
workers are brought together to solve problems.
Organizations are operating m a new post industrial society in

which knowledge is crucial. Companies recognized that
knowledge based economies will expand and knowledge workers
will become their most valuable assets. A company's ability
33

PROJECT MANAGEMENT
to Innovate, predict needs, and Implcmcnt new ness

Inanagernent technologies. Appropriate management cludes
allowing employees to explore and develop their own skills
and expertisc in such a way that a company's business will prosper.
The report challenges managers in thc A$la Pacific to release the

potential of their knowledge workers by:
l. Acknowledging that knowledge workers are different
2. Accepting that traditional command and control methods of
management are outdated and inappropriate.
3. Creating new ways of organizing work suitable for knowledge
working
4. Ensuring the right backup systems are provided which take into
account the motivations and values of knowledge workers.
Knowledge Workers and Manual Workers

According to Drucker, for manual worker, we need only effciency,
that is, the ability to do things right rather than the ability to get the right
things done. The manual work can always be judged in terms of
quantity and quality of a definable and discrete accomplishment.
Effectiveness should be a habit; that is, through a complex of

practices which could be learned. Therefore, there is no reasons why
one with normal endowment should not acquire competence in any
practice. What is needed to be effective is competence. What is needed
are scales for measurement.
If a man wants to be considered responsible for his contribution, he

has to concern himself with the usability of his product and that is, his
Imowledge.
The Imowledge worker is the one factor of production through

which the highly developed societies and economies o f
34
today. Knowledge worker is not defined by quantity, neither is

knowledge defined by its costs. Knowledge work is defined by its results

CONSTRUCTION PRE-PLANNING
The knowledge worker is not to be supervised closely or in detail. He
can only be helped. Onc cannot be sure what the knowledge worker is
thinking and yet thinking is his specific work. It is his job. There is an old
saying that the greatest wisdom not applied to action and behavior is
meaningless data. Therefore, knowledge worker must do something,
which a manual worker need not do.
Most brilliant men are often not effective. They failed to realized that
brilliant insight is not by itself achievement. They have forgotten that
insights become effectiveness only through hard systematic work.
Intelligence, imagination and knowledge are essential resources, but only
effectiveness converts them into results.
Working on the right things is what makes knowledge worker work

effective. This is not capable of being measured by any of
the meter stick for manual worker.
Knowledge worker do not produce a thing. He produces good

ideas, information and concepts. He is specialist. He can as a rule, be
effective only if he has learned to do one thing very well, that is, what
he has specialized. His accomplishment has to be

put together with the accomplishment of other specialists to produce a
good result.
Advances Deliver Results
Management advances deliver business results. Some companies

such as Samsung have proven that radical change is possible. Lee
Hun Hee chair of Samsung focused on nurturing creativity and
innovation in the corporate culture while simultane-
ously doing away with the hierarchical style of management.
35
PROJECT MANAGEMENT
C0NsTRUCTlON
Lower level managers gaincd roorc decision making
sil)ilities and workers at all levels wcrc encouraged to new
skills or Interests, cvcn unrelated to their specific
sponsibiiities. The rcsu)t of this restructuring program
Samsung the leading force in the clectronicg industry day.
Likewise, Asian companies realized that economies that
based on knovvledgc work and workers will be the platform for future
prosperity and growth.
PROJECT CONSTRUCTION MANAGEMENT
36
CHAPTER 3
CONSTRUCTION
PRBPLANNING
3-1 Planning
Planning is an art, and the art of planning exist only among
human beings. This power to be able to plan distinguishes man
from the other members of the animal Idngdom.
The environmental development through planning is a

natural field for Architects as they are in a better position
because of their training and experience. However, for a good
planning, intelligence and experience are necessary. And for a
plan to be successful, it must be prepared by those were trained
and qualified.
The pre-planning stage, establishes and determine the direction

and success of any construction project. Unfortunately, it seems
that some engineers and constructors have*not given the pre-
planning special emphasis despite their one direction of going
there.
Past experience have proven that there is no short cuts to sound

construction pre-planning. There is no new procedure to replace the
following four basic rules for any job.
The construction superintendent should be included In the

consultation at the very start of the planning stage. Do not
just present him later the finished plan and say: 'here is the
plan for you to implement.
2. Make a job breakdown Into components. This will simplify the

whole program.
51
3. Prepare a construction plan that will be consulted con
stantly. Do not just file it in a drawer only to accumulate
dust.

4. Take advantage of nesvv tools, which have demonstrated
in saving fine, money or confusion. For instance, a
computer can be used to layout on one sheet a detailed
schedule according to numbgr of days, crafts, man-hours,
costs, procurement and completion of a process.
For Whom and What are We Planning for?

l. We are planning for the owners of the company when we
plan to achieve a profit by operating at the nummum ca
pacity, utilizing the available resources.
2. We are planning for the employees when we plan to create or
maintain jobs.
Planning Functions has Four Different Dimensions, namely:
1. Planning is a philosophy
2. Planning is integration
3. Planning is a process
4. Plannmg is a collecfon of procedures.
Planning is a philosophy. Looking ahead is a way of thinking,
a concern about the future effects of today's action. Plan ning
involves a state of the mind that recognizes the need for
orderliness and the value of direction.
Individual planners may sway between optimism and
pessimism, but they dare not stray too far from reality.
Planning is integration. Both long and short range plans

provides a unified structure to give purpose to the
organizational units involved. Broader plans consider the
client, the sup plier and other peripheral contact of the
company.
Planning is a process. Goals and objectives are the most

obvious consequence of the planmng process. A loose
objective
52
of survival or Of making profit is a poor guidelines clearly
inadequate for steering an enterprise. A wmning plan includes:
l. The strategy that defines how much has to be done to achieve
the objectives.
2. The sequence of events that satisfies those strategies and
3. The assignment that lead to the accomplishment of the
events.
Planning is a collection of procedures, All companies make

plans åhead to some extent and apply their own methods of doing
so. In small company, one person may do it all, but larger
companies have standard procedures for formulating and
carrying out plans.
3-2 The Project Manager

The central figure in a project is the project manager. He bears
the ultimate responsibility for the success or failure of the project.
His role in the construction is one of an organizer, a person who
is capable of working through others to accomplish the objectives
of the project.
The job of project manager can be both diffcult and rewarding.

However, the reward of the job of project manager comes from:
l. The benefits of being associated with a successful project.

2. The personal satisfaction of seeing it through to its con-
clusion
3. The challenge of the job, and working with other people,
Project construction management differs much from

management of more traditional activities. It is a unique
one-time operation with one major objective - to
accomplish an specified tasks m a limited time framework
The main feature in project construction is the Project
Manager who oversee a variety of
53

operations 'that involves repetitive activittcsy and other various

works.
Project Manager must onen function in an environment that IS beset
with uncertainties, He has to coordinate and motivate people who
sometimes owe their allegiance to Other managers in their functional
areas€
There are people who work on a project that possesscs specialized

knowledge and skills that the project manager does not have.
Nevertheless, the project manager is expected to guide and evaluate their
respective works. He may not have the authority he needs to accomplish
all thc objectives of thc project, but instead, he relies on persuasion and
cooperation of others to realize the project goals.
Generally, construction projects have some elements in common. The

problerns of planning and coordinating project activities can be quite
formidable for large projects, which typically have hundreds or even
thousands of activities, that must be carefully planned and monitored if
the project is to proceed according to the following schedule at a
reasonable cost.
l. Project goals must bc established and priorities are set.

2, Different works must be identified and time estimate must be
determined.
3. Resource requirement must be projected, and budget must be
prepared.
4. Once underway, progress must be monitored to assure
achievement ofthe goal.
The project manager's mission is to plan, coordinate, control and

accomplish. His achievement can probably be traced to his success
in managing people. Similarly, people at every tier of corporate
hierarchy, exercise essentially the same management principles to
lead other people towards the accomplish ment of organizational
objectives.
54
Managerial competencq is a function of a manager's

character, knowledge, and experiences These three ingredients
interact to mold a panicular style of management. Styles may be
altered or fasllioned by education gained from formal training
and work seasoning. An advantage of studying management
techniques is the opportunity it allows to explore and develop
managerial skills without suffering the consequences of trial and
error learning.
3-3 The Worksheet
The initial move to get the project under way is for the Project
Manager to convene a preliminary discussion oh the documents,
and to gather more information as may be available at the early
stage. There should be additional and pre-planning information
available such as, the client's required operational date.
What the Project Manager needs to now are:

l. The logical construction sequence that must be followed.
2. The quantity and the delivery of various materials to be used.
3. How much and what kind of manpower will be needed.
4. When to start and complete the job on üme.
The first step in construction pre-planning is to prepare a

graph and plotting Lthe anticipated date of delivery of all major
equipment at the site. The optimum time for each construction
activities could be analyzed. Severe craft peaks and
uneconomical use of equipment will appear on the projected
graph, which could then be adjusted to prevent future conflicts
in the field.
By working backward from the expected completion date, the

experienced project manager can predict the latest possible
starting date for any of the activities that make up the whole
construction project. The worksheet represents a plan of action
55
presented graphically by a critical sequence of functions Of sub

sidiary activities contamed within a compact period of time.

3-4 Timetable
The project manager should conduct one or more informal
sessions with key personnel assigned to the project such as:
l. construction superintendent
2. Job buyer
3. Drafting room coordinator
4. Job expediter.
During the session, the preliminary construction program or

work sheet is reviewed to deternune whether engineering work
and procurement of materials can be accomplished at the rate and
in the sequence as programmed in the schedule.
The sequence of construction activities, which are related to

optional early and late starts, will serve as a running list of indi
vidual job components, with notations to work activities with
greater importance and priority over the others.
Specifications for equipment and materials, which are In the

development, should be processed according to their importance
or urgency in the overall project. The design and drafting effort
can be organized, to produce those drawings that are necessary at
the early stage of the construction program for field installation or
to complement an urgent purchase of materials,
At this early stage of construction development, it

is essential and timely for the procurement committee
to place orders for -long term delivery of items at an
early phase of the project. The relative urgency of the
on site receipt as scheduled, may be used in
establishing a shop fabrication schédule with the
supplier. One important ffnction of the construction
planner is the
56
preparation of an accurate manpower estimates assigned
to each function. This can be done on the basis of
manpower category of the works like: working on
foundations and underground fa cilities or by craft such as
carpenters, tinsmith, plumber, electri cian, laborers or by group
methods. The manpower distribution and classificaüons can be
done in two ways: by manual or by the use of computer. By manual
method, it takes more time but results m a more accurate and
realistic summary as an anticipation of the need without reverting to
an average manpower distribution.
On the other hand, manpower distribution by computer, lessen

the engineers but the result is less realistic because it is applied on
the average manpower loadings to the computer. The manpower
summary result will be lower than might be realistically anticipated.
Where time is available, the manual method prepared by an
experienced engineer is preferred.
In either case, what is needed is the rate of anticipated manpower

-expenditure on the basis of work category or classification or on the
basis of crafts. In addition, it is a worthwhile in- strument 111
establishing the limit extremes of manpower application to
summarize the manpower loading in two ways:
i. With all fimctions performed in their earliest position on the

timetable.
2. With all functions performed in their latest starting posi
tion.
3-5 Project Engineer's Review

The Project Engineer must:
l. Review the timetable thoroughly

2. Raise questions on its overall logic and workability
3. Offer constructive criticism on detailed work functions and

interrelated activities
57

Invariably, this rcvicw wiJJ regnlt in a mjnor revision of thc
schedulc. After gathering of the dctaiJcd information and
lilade part of (he, tiguc(ablc, the cntirc program ig broken down

scveral pal'tg,
Allcr the prqjcctg Ijavc bccn delineated on the timctablc as

e
a s cparatc job with minor qualifications, it can be considered
as a project itself, As lhc project becomes an active
construction progratn in the field, its progress, man-hour
utilization, field labor expenditures, quality and quantity of
suspension, and major material status arc all monitored and
rccordcd at thc field and home OITJCC.
The manpower assignment for cach activity on the

timetable is then translated into a graphical presentation,
showing the anticipatcd manpowcr expenditures and the target
progress of the work in percentages,
L By graphical reporting, manpower and percentage

accomplishmcnt is easier to evaluate showing the
general direction and condition of the job.
2. Data arc received by way of one page weekly progress
report and a weekly field payroll report.
3. A field man-hour report is submitted every month.
By close control and evaluation of field cost and man-hour

expenditures it can easily detect the following:
l. Possible budget man-hour overruns

2. Craft peaks
3. Weakness in supervision coverage
4, Inadequacy of tools and equipment
P
lhe manpower and "Percentage Complete" graph will
indicate the possibility of sustaining a successful rescue
operation by keeping a constant watch and taking possible action
as soon as the program begins to lose ground. The graph
indicates the
58
necessity Of Inving pre-planned schedule to provide a basis for
monitorin& assisting, controlling and adjusting a vaogram •when it
deviates from the prescribed path
A daily look at the graph, alerts the Project Manager and his
home office to the possible need for a radical action such as:
l. Manpower reallocation for elaborate re-scheduling or
2. For a speedy economic analysis of the whole project to

determme whether extra manpoveer or two shift operation
may be necessary.
A periodic visit to the construction Site is necessary for the

various members of the central construction department staff to
audit the program so that:
1. A first hand review of the progress is made and the eral

status of the work is compared with the timetable and
discussed with the key field supervisory staff
2. Home offce assistance is offered to the field superintendent

In pushing particular phases o? the proJect that may be held
up in such areas as drafting of procurement.
3. Suggestions arc made and discussed with the field
organizations as to how its progress can be Improved.
Discussions and review of construction problems at the site

assures a clearer understanding of the work status for the following
actions:
l , Alternate solutions may be reviewed 2.

Exchanging ideas for a better solution
3, To implement results as agreed m the meeting
The site review, gives everyone an opportunity for a general

discussions of ideas and techniques on concurrent construction work.
The best pre-planning approach requires a constant attention to a
construction project. Above all should be
59
flexible enough to give it a chance to adjust quickly and radically
at any time when it be necessary.
3-6 Preliminaries and Site Management
After a contract is atrvarded, the contractor has to:
I. Determine the key personnel to supervise the work
2. Make provisions for the equipment to be used.
3. Determine the location and methods of erecting temporary
structures such as:
a. Job offces be
Storage sheds
c. Workshops
d. Roadway, etc.
e. Bank house for workers and facilities.
The layout of these structures should be planned carefully, in

anticipation of its removal during the excavation of the permanent
works more particularly, the storage and its contents, which might
cause disorgamzation and delays.
The job should be adequate, but not excessively staffed, to

ensure effcient execution of the work. Large construction work
needs competent foremen. The contractor must be selective in
sending men of proven ability and qualification to start the work
even if they are replaced later by selected personnel engaged
locally.
The construction site should be maintained in strict tidiness

and in arn orderly routine because it has a psychological effect on
the staff and workers, which promote conscientious service,
Remember that the owner would like to See the actual work
getting under way in its fullest operation and orderliness.
In carrymg out the construction work, idle tüne and unneces-
60

sary cost should be avoided. Time saving devices such as 'tele
phone, loudspeakers, signal posts, traffic control, sign board
location and other economy measures should be installed
mediately upon commencement of the work. Before thc work get
started, it should be first established from which the buildings
may be demarcated on the ground.
The excavator with his equipment should start cleaning,

stripping and digging operations. Material deliveries should also
start as soon as possible and a labor force started the excavation
for the foundation work, etc. If all these operations get under way
without undue delay, the job will have a healthy aspect, high
morale and satisfaction of all concerned from the owner to the
contractor and down to the lowly laborers.
The contractor should procure sufficient copies of the plan

and specification to distribute among his supervisory staff. This
will thoroughly acquaint them with the details of the job.
Likewise, the sub contractors and consultant should be
furnished with the plans and specifications so that, there is no
excuse for mistake and delay on this account.
Preliminaries in Organizing a Construction Job

Project undergoes series of stages which includes:
I. Planning
2. Execution of major activities
3. Project phase out
Project construction life cycle requires various requirements such as:
l. The site must be found and boundaries relocated

2. Plan must be drawn
3. Plan must be approved by the owner 4w
Building pennit must be secured
61

5. Succession of personnel follows
Succession Of personnel is the rotation of personnel who will
be doing different kinds of job according to their specialties. For
instance:
l . Those doing the site relocation and preparation, and laying of

foundation.
2. Erecting the foundation and column, floor and roof
framework.
3. Constructing walls and partitions
4. Plumbing and water supply connections including drainage
system.
5 Mechanical equipment
6. Electrical and communication wiring system
7. Installation of kitchen, bathroom fixtures and appliances.
8. Interior finishing work
9. Doors and windows
10. Painting and vamishing, and other finishing works.
The maln objectives in the preliminanes of organizmg a
construction job are:
l . To secure the necessary licenses and building permits

2. Prepare a time and progress chart.
3. Have an access to the site or a temporary roadway.
4. Construction of boarding, fences, and temporary shed.
5. Construction of temporary field offices for the staff
6. Arrangement for canteen facilities.
Cleaning and leveling the site.
8 Demolition of existing structures
9. Disposal of materials obtain from the demolition 10.
Shoring to adjoimng structures l l . Arrangement for
temporary water and electric gupply
12. Allotment and preparation of storage space for use of
contractor and sub-contractors
62

13 Allotment of space for borrows pits or other sources of fill to
be brought in.
14. Provision for drains and soak-ways.

15. General site problems including any special features.
Organization of the Work
Organization of the work, consist of making proper assignments

and sequence of the works in a systematic order aimed at making
the best use of labor, materials and time. The organization of the work
is the responsibility of the contractor under the direction of the
supervising Architect or Engmeer.
There are two independent but related spheres of control and

responsibility that exist in the project construction, namely:
l. The owner is represented by his Architect or Engineer

2. The contractor
Each has their ovm duties to perform in the Interest of their

employer - the ovvner. Most of their respective duties and
responsibilities were stipulated and defined in the contract, and
all will be better exercised if each one appreciates the duty and
responsibility of the other. The contractor is generally
responsible to the owner for the following duties:
1. Providing and making access roads with due regards to the

convemence of construction.
2. Erection of site offce in a central position to facilitate checking

of all site activities.
3. Erection of store shed of adequate capacity. to ensure:

a. Protection of materials against damage
b. Protection of materials against deterioration.
c. Prevent materials from wastage and pilfering.
4. Construction of temporary quarters and ancillaries

for la bor with due regard to site of works,
amenities and hygienic conditions.
63
5. Appointment of supervisory staff possessing technical
knowledge and capable Of controlling the work and
labor,
6. Early arrangement for construction equipment. i,e,
a. Scaffolding d. Ladders
b. Formwork e. Tools
c. Instruments and machinery with necessary screw, fuel
and parts etc.
64

The Engineer or Architect on behalf of the owner is

also re, sponsible for the following duties:
1. As representative of the owner

a. Act as interpreter of the plan
b. As guardian and arbiter between the owner
and contractor
2. Maintain site records and documents like: a, Layout

plans
b. Contract documents
c. Time and progress chart
d. Work dialy
e. Contractor's order book
f. Records of tests Progress report
h. Measurement book, etc.
3-7 Planning Program and Progress Chart

The most important part of the works organization are:
l . The preparation of a comprehensive time and

progress chart for the execution of the work,
2. The periodic revision of the chart as circumstances

demand, and the regular comparison of progress chart
made with the program,
The project manager is
rgquired to prepare an approved time and progress
chart, which is generally part of the main contract
documents.
l. The time and progress char must show an analysis ofthe

chief elements and types of construction involved in the
project

2. The scheduled dates of commencement and completion of

every stage of the main contract and of sub-contracts
Without proper program, the construction work can be

disorderly managed. The time and progress charts serves as the
coordination and control of all the work under the different
subdivisions of the contract. With this time and progress chart
it is easy to pinpoint where the delay has occurred, and who is
responsible for the delay.
Likewise, because of a clear definition of the dates, all

parties concemed have to assume their tasks making much
easier for the contractor to finish the job on time.
Besides of being the standard requirement, the chart, auto—

matically shows and offer the infomation:
1. The sequence of operations

2. The target time and date for their completion
3. The rate of which they must be carried out
4. The owner's staff and the contractor's staff should be
familiar with the information given in the chart and should
constantly strive to carry out the work according to the
projected rate of accomplishment
5. If some operations are to be done by sub contractors, they

should be notified in advance and given a clear
understanding of what exactly is expected from them.
6. The chart also tends to prevent changes in design and
layout with consequent delays and increased in cost. It
also provides essential information regarding labor.
materials and plant requirements.
65
66

From this program, the owner can be furnished with

particulars of the likely financial requirements during the period
of construction, and will be able to coordinate his program for
bringmg the scheme into use.
3-8 Maintaining Time and Progress Chart

The making of time and progress chart is a matter of trial and
error. It requires consideration of alternative methods and the
effect of each event, resulting in an orderly arrangement of event
and an ultimate savings of time and cost.
The chart should be flexible so as to permit modifications to

meet unknown contingencies that may arise. It will enable those
in-charge of the work to see the effect of the contingency. It will
be on subsequent operations and to.make the necessary
adjustnents to bring the program back Into line.
The chart is divided into many horizontal spaces as are

required for the major operations of the job. The vertical columns
provide space for:
1- A description of the items

2. The target date for letting the sub-contract or purchase
order.
3. Anticipated starting date, the expected completion date and
suffcient number monthly columns to cover the total time
for completion.
4. One or two extra columns for the possible over-run.
After the form is drawn up, the next step is to complete the
description column in approximately the same order as the
operations will take place on the site, except that operations
belonging to the same trade or classification of work which

should be grouped together regardless of the time when they will

be executed, and the mechanical trades are entered last.
The target dates for buying materials should be workcd back
from the starting date and time allowance for the operations requiring
shop drawings and fabrication. progress is shown In green color for
on time, and red for behind schedule.
ne ideal chart shows the progress hne green throughout the

contract period. On large project, a separate chart is provided
showing a date of delivery and a date of usmg up of all principal
materials and laborers of each category employed on the main
contract and of the sub-contracts.
The time and progress charts is kept up to date so that when

the Owner or the Engineer visit the site, they could see a true
comparison between the actual progress against the scheduled
program. Within the first week of each month, the contractor
shall forward to the engmeer or architect a progress report
showing particulars of the work done in workshop and on the
site, also giving the present position, the rate of progress,
estimated time of completion and hold-ups for the delay if any.
3-9 Planning and Scheduling with Gantt Chart

The Gantt chart is a tool used for planning and scheduling
simple projects. With the chart, the project engineer can mitially
schedule project activities, and to monitor progress over time by
comparing planned progress to actual progress.
To prepare the chart, the project manager has to identify the

major activities that would be required. Estimates for each activity
are made and the sequence was determined. Once completed, the
68

chart indicates which to occur Includ ing their

planned duration, and when they were to occur.
As the project progresses, the project manager would be able to

see which activities were ahead of schedule and which activities
were delaying the project, This will enable the project man

ager to direct attention where it was needed most to speed up the

project to catch up with the schedule.
Activity Weeks after start
Start 2 3 4 7 8 9 10
Relocate the site
and stake
Excavation and
Footing
Erection of post
and girts
Roof framing and

Roofing
Floors and walls
Plumbing and
Electfical
Finishing
Works
Painting & Varnishing
Stan 2 3 4 5 6 7 8 9 10
Weeks after start
FIGURE 3-1 GANTT CHART FOR CONSTRUCTION
The advantage of the Gantt chart is its simplicity, making it

very popular. Gantt chart however, fails to reveal certain
relationships among activities that can be crucial to effective
project management. For instance, if one of the early activities
would have to be delayed, it is because they could not start until

that activity was completed. Conversely, some activities may be

delayed without affecting the overall project schedule.
68
A Gantt chart does not directly reveal this information. Gantt
charts are useful for simple projects where activities are
simultaneous or where a string of sequential activities are involved,
On a more complex projects, Gantt chart can be useful for initial
project planning, which then gives way to the use of networks called
PERT and CPM which will be discussed in Chapter 4 to Chapter 8.
3-10 Material Supply

The buying of materials is an important activity in all
construction works. The contractor has to determine his material
requirements and scheduled the sequence of its deliveries. There are
items which requires time for the preparation of shop drawings and
fabrication before Installation. Hence, the list of material
requirements from the bill of quantities should be made without
delay.
The contractor should refer the material quotations received at

the time of preparing his bid for the job which can be used as the basis
of negotiations with the suppliers. A large number of quotations may
be obtained from the suppliers, and to facilitate their analysis, a
comparative statement should be made for each classification of the
quotations received, listing along with the price any conditions by
which may be qualified.
A purchasing program for construction materials should be

prepared according to its priority. In the absence of this pur chasing
program, the materials are likely to arrival at the site either too soon
with consequence of prolonged storage and pos- Sible deterioration or
too late deliveries which will cause undue delay of the work.

Confusion usually results from delay and shortage of materi

als of day to day requirements if they are ordered at"the
eleventh hour. The purchasing program will facilitate
the withdrawal of
69
materials and ensure prompt delivery by the
supplier because of the planned schedule of
deliveries, Purchase orders are prepared in triplicate, with
original going to the job site, A purchasc order form should
comain all the information such as:
l. Description of the materials

2. Quantities required
3. Time and place of delivery

4. Unit price
5. Amount
The purchasing clerk of the contractor must have experience

in identifying the variety of materials and supplies in general
demand for construction work including the trade names, the
quality and local practices that govern the prices.
He must work in close liaison with the contractor's staff who

prepare the details of requirements to meet the work pro gram. He
should work in conjunction with the storekeeper at the site
regarding the chasing of deliveries where suppliers fail to comply
with their commitment.

3-11 Financial and Budgeting

Money is a universal lubricant, which keeps a business
enterprise dynamic. Without suffcient financing, a business
cannot get started. And without adequate budgeting, a business
once started cannot reach its full potential.
The business must have sufficient capital structure to

sustain
its growth. It also need a sound profit plan or budget to support
and control its day to day operations. Thus, a healthy
construction company is one, which has sufficient resources
and the ca-
pability of controlling its cash flow.
Construction business requires sufficient funds to cover its

operation to maintain equipment, purchase of materials and
sup-
70
plies, to pay salaries and wages, to cover storage fees, transportation
and reserve for other services including SOPs These are current
operations where the ffnds to covet them are called taorking capital
Profit Motive. In a competitive construction business, the

profit motive is a predominant factor of considerations for upon
it may rest the justification for and in fact the very survival of
the company. No one feels secure about investing in or doing
busmess within a venture that appears to be skidding downward.
The Budget. The budget is the long tenu responsibility of

management to use investment that will yield the largest possible
profit and it is the function of budgeting to plan that profit profile,
A budget is a means toward an end, not an end within itself.

Budget vcas made to serve a purpose. They established goals
wherein each department and its workers must contribute their

designed share in accordance with the unified plan. The budget

must lead to precision and confidence among the employees
under the following pnnciples:
1. A department head Imows what was laid out for his deparünent
to accomplish.
2. He knows what is expected of him.
3. He Imows when he has done a good job or %vvhen and
where he is falling behind. With this, much of the worry of
uncertainty is eliminated,
Budget should be a conservative aid to all departments within the

organization toward their common goals. Unfortunately, this purpose
is frequently misunderstood, giving an early impression and
meaning to the budget as:
l. A control of expenditures established in the minds of the

subordinates, An attitude that budget is only a negative
71

control for which belief has led to the "padding" of de
parünent budget.
2. The idea therefore in each department is to propose as

large an alloünent of expenditures as possible that when
all budgets were assembled and that reduction is
necessary, each deparünent felt that it was the subject
of discrimination. Thus, the budget has become a "sore
spot" and a factor of disintegration among the
personnel.
A budget properly planned and operated, may have a

constructive influence on the personnel of an organization. It must
serve as a means of bringing understanding of the common goals
of all who belong to the organization, and all who serve it. In this
capacity, the budget will serve as a coordinating and unifying
influence to all concerned.
Types of budget. There are two principal types of budget.

l . The static or fixed budget
2. The variable or flexible budget
Static Budget. This type of budget depends upon the ability to

predict income with at least a reasonable degree of accuracy. A
fixed sum of money is allocated for expenditures with a fixed
budget of operations for a specified period.
Variable Budget. Illis type of budget, recognizes the

unreliability of income prediction and make provisions in
advance for variations m construction expenditures in
accordance with variation in income. Variable budget is
constructed in anticipation of variables income. It provides
advance for orderly change in the volume of construction and
expenditures.
Fixed Cost is one that is constant in total amount for a given

period. For example: the salaries of major executives, capital
tax, depreciation and the like, remain fixed regardless of the
volume of construction activities.

Variable Cost increases or decreases in proportion with the volume

of production or construction activities. Other items
such as direct labor and direct material cost vary in proportion with the
amount of contract which are called variable costs.
In general, simplicity in budgeting should'be held as a primary

virtue. Detailed clerical work in the preparation and operation of a
budget should be held to a minimum. These principles not only
eliminate unnecessary costs in budgeting but in general, promotes
clearer interpretation and control of the budget.
There are two types of variable budget:
l. Step budget
2. Variable rate of cost per unit of work
Step budget is a series of budget set up at different level of

construction volume or contract. This is anticipated on variations
In volume where changes in cost will occur such as additional
shifts, buildmg and supervisory personnel.
Variable rate cost is calculated as an average rate between two

pornts ofminimum and maximum construction operations.
3-12 Budget Preparation

The preparation of budget estimate in each departrnent is a
committee proposition. This is under the principle of participation as a
means toward cooperation. Participation in the preparation of a budget
serves to familiarize the personnel with the problems involved,
With their knowledge of the problems. and the feeling of being

part in setting the goal and limitation of the department, the
personnel give more effective consideration and cooperation on the
budget preparation.
76

73
The head of the department may act as the chairman of
the department committee, but in no case of a large
department. He should delegate responsibility for the
gathering details for the committee. In other words, he
should have an organization within his own department for
the preparation of the budget that follows the general
patterns of the budget organization for the company as a whole.
This organization will not only lead to a better budget

preparation but will also serve as a mechanism for budget
control.
The Financial Budget

Financial budget represents a summary of the anticipated
Income and disbursement for the budget period. The purpose is
to plan for the allocations of working capital as presented by the
current assets of the company. Data for financial budget are de
rived from the budget as prepared by the different department.
The financial budget must anticipate the cash receipt by

months, quarter or other designated period and make allowance
for the raismg of additional fund if needed to meet the current
expenses. This means that income from accounts receivables,
notes receivables, cash transaction and others, must be budgeted
as accurately as possible.
Expenditures may be planned in consideration ofthe following:
l, The absolute necessities of the budget of various department

such as weekly or monthly requirements of materi als for
construction, payroll etc.
2. Limitation of available cash.

It is not considered a good management to have large amount
of cash lying idle to met unusually large expenditures, The
interest being paid for such idle money has to be considered.
There are many problems arising out of attempted control
Of working capital, but these must be anticipated and alternativcg
arc selcctcd to mcct thcm
Short*tertn loan IS availed Of whenever fhcro is large eon•

sttuctjon contractu Firtanetål budget actg as a negativc control over
other dcpartmcnt, especially when capita! is {inuted but urgently
needed in tune of rapid construction •v;hcrc additional capital and
equipment is necessary. In most instances. financtal budget
provides a systematic and positive approach towards the attainment
of the coordinated plans and divisions.
3-13 Procurement Processes

In project construction, the importance of the procurement
liability for gctting the right materials delivered from the suppliers
to the site on time, cannot be taken for granted. A minor item or low
value material not available when needed can stop the construction
activities, put people out of work and delay Of complction. For
Instance, in the absence of a common wtre nails carpentry work
activities could be paralyzed. In general, the purchasing agent is
made responsible for matntatning the fol lowrng maJor
procurcmcnt factors:
j. Quality of the materials

2, Quantity of the materials
3. Time of delivery
4, Price of the materials
The procurement department and his agent are expected to
Know and maintain records $howtng the materials and their

possible substitute, sources of supply, prices and quantities
available.
78

2, Review specifications for possible simplifications and
standardization of materials as for unreasonable requxre•
ments.
3. Negotiate with suppliers for possible extension of credit,

75
4. Gather and analyze price quotations and fluctuations,
5, Place orders with suppliers
6. Follow up purchase orders for delivery as specified
7. Audit invoices to check compliance with agreed terms and
conditions
8. Maintain records of all purchases
9. Coordinate with other departments on all matters pertaining
to procurement.
Ihe prerequisite of any purchasing contract is meeting of the

minds as to the exact nature of the materials required and to be
furnished. Material standard which defines the major requirements
such as; size, color, forms, composition, performance of the
materials and aiso the state acceptance terms and shipping
conditions requires purchase specifications. There are materials
which are purchased by catalogue number, description or by its
name. This practice is practically simple but because of
specifications of branded catalogue items are often subject to
change,
Purchase order usually starts from a purchase requisition. It

specifies the lüld, quantity and when is to be delivered. Purchase
requisitions are serially numbered as an aid in filing and follow up.
For items ordered regularly, a traveling requisition is used. This is
a card carrying the usual information on the purchase requisition
but with space for the word "repeat order. ms is used over and over
again without the retrying data. This procedure, eliminate clerical
works and the need for a separate purchase history record.
Materials bought under continuing contract or those purchased

repeatedly do not require quotations from the supplier since all the

necessaryvånformation is already available to both parties. In case
of repeat order, the purchase order form might include the phrase
"as previously furnished on our PO No.
The unit price and discount expected will likewise be shovvn as
with the purchase order number and that of the original
requisition,
80

PRÉ9tANNlNG
3-14 Inventory Control

Effective invcntorv control is nimcd at ptoviding an adequate but not
esccsstvx• supply of matettalg at hand at all tiü1C$ to meet operating
However, fot most compantes, IUvcütones pcrfertll fitnctions
l. ü1ey act as safety stock of materials or effect. short tem insurance

against fluctuations supply.
2 Instentories permit a company to operate With disconncctcd
processes tn the construction and disbursement cyCle.
3-15 Site IManagement of the Work

Safety in the project construction must be given primary considered
from the mechanical side to the legal angles of workmen's compensation
or even as a matter of trainmg and motivation toward safe work practices
for workers.
Immcdiatc supervisor's responsibility is to sec to it that thc

working place is properly arranged and maintained wherein the
equipment, scaffoldings and the like are all in safe operatttlg conditions.
He should strictly see to it, that all workers do folJow the safe worktng
habits.
Regardless of the exact percentage relationship, influencing human

motivation to work safely is an important responsibility of the foreman
and supervisors, Safety must begin from the drawing board. In the
original design of the layout of work place or tools, accident hazards
may be built In or ehnunated, A safety rninded prqect engineer will make
adequate provisions for safety measures to:
L Minimize manual handling hazards ofrnatenalee

2. I.ViII locate control and fuse panels where they can be
reached safely.
3. Will install strong and rigid forms and scaffoldings
4. Will insulate all live wires and screen high pressure areas.
5. Will adequately guard belting and line shafting even if it is
normally accessible.

The safety minded engineer is one representative of management
whose interest is primarily on safety. In addition to accident prevention,
a complete safety program has to do with promotion of workers health,
with prevention of such occupational diseases and fire prevention. Fire
protection as safety function, is highly important for some of the
materials being used might be flammable.
3-16 Planned Maintenance

Effective maintenance of the plant and construction equipment is
a prerequisite to effcient operation and uninterrupted construction
activities. While deterioration of building cannot be stopped, it can be
retarded by maintenance.
Machine and equipment likewise, are subject to wear and tear

from use. Machine tend to got out of adjustment not only as the
result of use, but also because of temperature changes, vi bration,
seasoning of machine parts and a host of other causes.
Time is likewise a factor as corrosion forms in bodies and on various

vital parts of the machine. Dirt gradually finds its way into many types
of equipment. Moisture seeps into electrical windings and breaks
down insulation. To counteract the effect of all these inherent diseases
in equipment, the only wonder drug that could be prescribed is proper
periodic maintenance.
Planned maintenance is an organized attempt to prevent sudden

breakdown in equipment and periodic shutdown for repairs. It is
accomplished under the program of preventive mamtenance, a definite
program of periodic cleaning, servicing, inspection and replacement
of worn parts.
78
PRE-PLANNING
Preventive maintcnance has long been an economic

necessity for construction cquipmcnt which must operate
on a con'tinuous process. When failure does occur,
investigation is made to know the cause, and statistical
records are kept to indicate whether or not the preventive maintenance

PERT AND CPM
program is effective and working. Maintenance for the machine and
equipment is very costly, Continuity of operations demand that the following
general procedures should be carried out:
l. Down time of each equipment for servicing is planned jin advance.

2. Important items of equipment that requires regular clean-
ing and maintenance or liable to sudden failure should be
ready at hand for substitution at any time of failure or signs of
approaching failure.
3. Records should be maintained and analysis made of repetitive
failure.
4. Regular and prescribed inspections should be made for signs of
impending failure.
A number of engineers feel that in the long run, the cost of regular
inspections of equipment exceeds the cost of failures that are hereby
prevented. They pointed out, that many break downs occur suddenly
and without warning. Hence, predicting the approach of such failures
is statistical improbable.
How does one foresee a fractured drive shaft, a sticky hydraulic valve, a
limit switch that suddenly fails to operate a transformer that blows up?
These are only few of equipment breakdown headache which are difficult if
not impossible to cure by the inspection medicine. Thus, every case of
preventive maintenance inspection must be weighed on the balance
scale of cost. The question is: does an ounce of prevention really affect a
pound of cure, or does a pound of prevention result In only an ounce of cure?
Where machine and equipment have been in operation for a
79
83

considerable period of time, records of the timing and
extent of failures are available. Knowing the probability of
breakdowns and their associated costs, the expected expenses
of different maintenance policies are calculated. Preventive
maintenance program is indicative of the value of calculation,
which revealed the interval between overhauls that minimizes
maintenance costs.
Economic reasoning frequently must bow to other
considerations. On some items of equipment, failure is
prohibitive from the standpoint both of property damage and of
employee safety, The frequency of inspections will depend upon
the nature of the facility or item being checked, its importance to
the continuity of operat;ons or to the safety of the plant and
workers and the time interval from the first indication of trouble
to the actual failure, General inspection of machinery can be
scheduled at intervals of perhaps 3 to 4 months depending upon
the volume of service or operations.
Equipment Rental
The trend in construction bu*ss is to have equipment rented.
In very recent years, there has been a significant swing toward
the rental of equipment as opposed to outright purchase. This
trend has found particular favor in rental plans for construction
equipment, delivery trucks, materials handling trucks and offce
equipment.
Renting equipment offers the advantages of no capital
outlay, no maintenance or servicmg worries for the user, and
rental cost fully deductible on income tax classified as
current business expense.
Whether the long range cost of such rentals compared with
ownership is lower is a debatable point which each company must
decide on the merits of its own case.
80

PERT AND CPM
CHAPTER, 4
PERT AND CPM

4-1 Introduction
What is PERT and what is CPM?
PERT is a Program Evaluation and Review Technique.
CPM is the Critical Path Method.
PERT and CPM were developed independently in the later

part of 1950's. These two are networks. A techniques, used for
planning and coordinating large scale projects.
The use of PERT began in 1958 through the joint efforts of

the Lockheed Aircraft, the U.S. Navy Special Project Offce
and the consultmg firm of Booz, Allen & Hamilton in the
efforts of the U.S. government to speed up the Polaris Missile
project.
The U.S. government's apprehension that the Soviet Union,

might gained nuclear superiority over the U.S., early
completion of the project was given top priority. A Special
operafions research team was directed to formulate a new
approach considering that the management concepts and
methods at that time were not adequate. The concept was
formulated by the research team and is then called Program
Evaluation and Review Technique, which is simply called
PERT.
The Polaris Missile project is a large one involving over

3,000 contractors and 11,000 sub-contractors with several
thousands of work activities. The use of PERT in this large
85

scale project was proven successful in shortening the length of
the project completion time
81
In 1956, prior to the development of PERT, the Critical

Path Method which is simply called CPM was developed by J.E.
Kelly of the Remington Rand Corp. and M.R. Walker of Du
Pont in an effort by commercial industry to make an advanced
scheduling and cost control methods. By April 1958, CPM in
application was demonstrated in a real success.
CPM was designed as a tool for planning, scheduling, and

control of construction work. Its emphasis was on the work or
activities to be managed. The network diagram defined and
focused attention on the job to be accomplished. The schedule
derives the earliest and the latest times for their start and finish.
PERT was developed as a result of looking for an improved

method of planning and evaluating progress of a large scale
research and development program. It was designed to provide the
management a periodic reporting of current status and an outlook
for the future on meeting approved plans and
schedules. It answers the questions such as: "Is this a
feasible schedule? And what are the probabilities of
making it?
Although PERT and CPM were developed independently, yet,

they have a great deal in common. Users adopted Certain features
from one technique for use with the other.
For instance, PERT originally stressed probabilistic activity
time estimate because the field in which it was developed was
typified by high uncertainty. In contrast? CPM originally made
no provisions for variable time estimates. However, from a concep
tual analysis, most of these differences were relatively minor. For
practical purposes, the two techniques are the same. Thus, com
ments and procedures described will apply to both PERT and CPM
project analysis.
PERT AND CPM
PERT/CPM is a control tool for defining the parts of construc
tionjob and then putting them together in a network form. It
serves as an aid to the construction manager but it does not make
deci-
82
sion for him nor does it guarantee good management. PERT/ CPM only serves the project
manager to see the whole picture of the entire job. It• encourages periodic re-eyaluation and
providing an accurate measure of progress, Thus, a person In charge of each work and the
project manager know what is supposed to happen and when it is supposed to happen.
4-2 PERT/CPM Project Requirements

Today, ether of the two techniques can be used with deterministic or
probabilities of The remarkable historical record of PERT and CPM on large scale
projects accomplishment has gained world wide acceptance. In all major projects of
the government, PERT and CPM network is a mandatory requirements.
Under Presidential Decree (PD) 1594, Prescribing Policies,

Guidelines, Rules and Regulations for government infrasü-uc- ture
contracts provides that:
"The program of work shall include, among others things, esti

mates of the work items, quantities, costs and a PERT/CPM
network of the project activities...in the preparaüon of the bidding
docu ments, the government shall make and esümate of the actual
number of working days required to complete the project through
PERT/CPM analysis of the project acüvities and corrected for holidays
and weekends."
On January 27, 1968, president Ferdinand E. Marcos issued Memorandum Circular No.
153 which provides that:
"In order that the performance discipline on the field could be

controlled and easy reporting system could be made to facilitate the
87

monitoring, evaluation, inspecüon compleüon of infrastructure pro
jects, all heads of departments and chief of bureaus and offces
concerned are hereby required to change the old system of preparing
the work programs of said projects from the Gantt Chart (Bar Type) to
the PERT/CPM network. Strict compliance herewith is enjoined."

On June 19, 1968, the Executive Committee for Infrastructure Program
implemented the Presidential Order in a letter to all implementing agencies to wit:
"Your attention is invited to a Presidential Order requiring the preparation of a PERT/CPM

diagram for every major project prior to their actual construction."
Section 6 of R.A 5979 requires the application ofPERT/ CPM technique to all
projects with an estimated cost of PI 00,000 or more. Thus, PERT/CPM now has
become an integral part as requirement of project construction management.
With the use of PERT/CPM, the project manager can easily obtain the following informations:
1. The graphical display of project activities
2. An estimate of how long will the project last

3. Determine which activities are the most critical to timely project completion.
4. Determine how long any activity can be delayed without
89

be
perofwork time to start and
when to Each work
operation can be performed
in different ways at different
costs and in different time
duration. Most construction
projects have specified time
ofstart and time
ofcompletion. When the
contract time is less, in
effect it requires higher
indirect costs. Thus, in order
to catch-up with the allotted
time, solne of the operations
must be speeded-up.
Consequently, to speed up
construction work requires
higher direct cost because of
overtime, shift of work,
additional manpower and

PERT AND CPM
equipment and various
expensive methods which
are not done on normal
construction operations with
suffcient time duration.
However, there is a danger that shortening a single

operation may only increase project cost but may not
shortened construction time considering that other operations
have not been shortened. On the other hand, shortening all
operations at the same time may only increase project cost
more than what is necessary to obtain the desired decrease of
construction time.
The Critical Path Method (OPM) offers the solution

through systematic approach. The specific informations
provided by the CPM are enumerated as follows:
1. PERT/CPM pinpoints the particular work operations
whose completion times are responsible for controlling
the complete date.
2. It provides a means of speeding up a project without exces
sive costs for overtime. Without the use of PERT/CPM
when speeding up the project overtime expenditures may
be in total waste.
3. It gives a time leeway or float available for each of the non-
critical work operations. The information on float time
will give the project manager that opportunity to maneuver

in their planning and control of the operations.
4. It establishes time boundaries for operations with possibili
ties of shifting resources, equipment and manpower
to-meet time requirements.
5. pERT/CPM indicates the earliest starting date for each work operations and sub-
contracts for supply and delivery of materials.
91

6. It shows the most advantageous scheduling for all operations. This gives planning
informations as to time and cost in choosing methods, equipment, crew and work
hours.
7. It offers a means ofassessing the effect on the overall project variations in one operation
such as change orders.
8. In case of change order where the owner would not want to extend the contract
time, PERT/CPM offers a means of re-scheduling the operations but still to be
completed at the least increase in cost.
9. With the critical path schedule as revised to reflect the change order, any claim if
any, for additional payment will be understood both by the owner and the contractor.
10. In case of serious delay due to weather, late material or equipment delivery,
the network can be revised at that stage and new computation is made to determine the
new critical operation if any and revised float times determined •for the
non-critical operations.
In any project construction undertakings, planning is the most important

consideration which includes:
1. Gathering of all the necessary input data to make the PERT/CPM works.
Planning phase is the main work ofthe contractor for being
familiar and knowledgeable ofhis costing methods ofdoing
business.
The contractor can seek assistance for the accomplishment of his
work particularly the gathering of data, but his basic
responsibility on this matter .cannot be delegated to any outsider
group.
4. The contractor has the complete perception,

experiences, resources, and interest in getting the project done in
the best possible time and cost.
86

CONSTRUCTION
5. The planning stages give the contractor a "Dry Run" on the construction of
the project.
6. Ifthe contractor wants an effective approach and use of the construction
management, he must do it himself.
7. By performing the work personally, one obtains intimate first hand knowledge ofthe
job and gain insight and details of anticipated problems.
SCHEDULING
In PERT/CPM, Scheduling is defined as the process of trans- lating the arrow diagram
into time table of calendar days. This is done by the day date table converting working days
into calendar days which permits the inclusion of weekends, holidays, weather and other
time lost.
The PERT/CPM schedule shows the relationships between the operations and the
leeway limitations. All activities should be checked with the day to day table. All crew
and management restraints along the critical path should be verified and the restraints
should be adjusted to give satisfactory project completion. Non critical activities can be
scheduled to more efficiently utilize manpower and available resources.
Job control through the use of PERT/CPM gives the manage. ment a reliable
system identifring job problems within days instead of months. Progress along the
arrow diagram should be up dated for immediate references. The diagram must show
the status of the project at any time and indicate which activities can be started and to
pinpoint the cause of the delay.
The PERT/CPM diagram should be updated periodically to account for:

1. Time discrepancies
2. Deliveries
87
3. Weather
4. Change orders
5. Unexpected events or conditions.
Updating of the diagram is based on the number of days the project is out of
schedule.
CONTROLLING AND MONITORING

Flexibility and updated re-computations brought about by changing conditions
is the key to a successful network programming. To keep the schedule more up to

date and meaningful, it can be done by hand but IS more easier and less in cost if it
is done with
the assistance of computer to have the following output.
1 The contractor is supplied with time status reports showing

CONSTRUCTION
the Schedule Phase, there are four output that can be
1. The schedule of activities in the network showing the

From following:
obtained:
a. The Critical Activities
b. The Earliest Start date for each activity
c. The Earliest Finish date for each activity
d. The Latest Start date for each activity
d. The Latest Finish date for each activity
e. The Float which refers to the amount of extra time available
for an activity.
2. A Bar Chart or a Time Scaled Network (arrow diagram network for

the project).
3. A Resource Analysis showing the number and kind of
resources, man power, equipment and others that are required for each
day of the project.
4. A Cash Requirement prediction indicating how much cash to be
disbursed for the job and the amount of money that will be collected as
a result of work accomplishment.
The Control Monitor Phase uses actual data which includes:
1. Additions to the project - This refers to the new activities.

2. Deletion from the project
3. Changes as to duration, description, trade indicators, cost estimates
or resource estimates.
4. Actual starting dates
5. Actual finishing dates.
The Output Phase consists of the following:
1. Time status report
2. Revised schedules
3. Revised Bar Charts/ Arrow or Network

Diagram
89
4. Revised resource analysis

5. Revised cash flow predictions
6. Cost status reports
There are three major reasons for construction

failure:
l. Unbalanced organization due to lack ofplanning and
scheduling.
2. Lack of financial planning
3. Poor cost control
90

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Republic of the Philippines

BOHOL ISLAND STATE UNIVERSITY - Main Campus

ORGANIZATION & MANAGEMENT

1.2 WHAT IS ORGANIZATION?

Organizations are structured to promote better management. However, it is the performance

Apparently, there is no ideal organization designed to emulate. A management structure is only

6300 Tagbilaran City

le development in Bohol and the country

1.3 THE STRUCTURAL ORGANIZATION

Structural Elements of an Organization:

2. Materials. Represents the materials necessary in the distribution of functions or in the

3. Machine. The tools necessary in producing its desired output.

5. Money. The financial resources of the organization.

Major Elements of Organizational Structures:

1. Distribution of functions. The functions to be performed, the groupings of functions,

3. Communication and decision processes. The manner in which formal decisions

4. Policies. The decision, rules or guidelines established.

1.4 PRINCIPLES OF GOOD ORGANIZATION

2. Analysis. A sound business judgment attempts to build an organization through full

5. Departmentalization. In big organization, the scope of operations can be very broad,

6. Centralization of Authority and Responsibility. In every organization there should

7. Limited Span of Control. The number of subordinates an executive can manage

1.5 ORGANIZATION AND BUSINESS

le development in Bohol and the country

CONSTRUCTION METHODS & PROJECT MANAGEMENT

ORGANIZATION & MANAGEMENT

1.6 WHAT IS MANAGEMENT?

1.7 MANAGEMENT CONCEPT

Management to be effective must be systematic. Things can be done better by means of

Management to be effective must be scientific. Scientific management is a theory of

1.8 MANAGEMENT STRUCTURES

Line of Responsibility works in two (2) ways:

1.9 MANAGEMENT CONTROL

Control as a verb is defined by Webster’s dictionary as to “check or regulate...to keep within

Effective Communication System

An effective communication system is an important element of executive control. Under this

To the manager, information has four purposes to serve.

1. It must answer the questions what are we going to do?

1.10 THE MANAGER

Quality of an Effective Manager

1. He studies, analyzes and dissects his job.

1.11 EXECUTIVE FUNCTIONS

Plans may be classified as:

1. Objective of the enterprise

➢ Clarifying authority and responsibility

CONTROLING. Controlling is one of the important functions of a manager. In order to seek

Policies and Procedures

1.12 EXECUTIVE LEADERSHIP

subordinate. He must be a paragon of honesty, intelligence, enthusiasm, aggressiveness, loyalty,

He must have a goal, which is practical and right.

1.13. DELEGATION OF AUTHORITY

1.14. RESPONSIBILITY AND AUTHORITY

Note: Please read with comprehension

ACTIVITY: TEST YOUR

1-14 Responsibility and Authority

The president may delegate any or part of his authority because

ORGANIZATION AND MANAGEMENT

Yet. even wfth the aid of responsible consultants: there is always

1-15 Personnel Coordination

abilities and skills of personnel to perform the work. This is true

particularly in the establishment of leaders, supervisors and foremen.

The shortage of people who are capable of leadership and supervision

l. Lack of incentive in the supervisory positions.