02/09/2019

Introduction to Management
Theory and Projects (RECO 7074)
Roine Leiringer

Today
• Some boring admin
• Introduction of course self-study module
• Introduction of project case study
• Evolution of management theory
• Fundamentals of construction

First of all

WELCOME!

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Course philosophy

A case Interaction/activities Asking questions Learning from each other

Important!
• This is ‘management theory’!
• Not algebra, physics, chemistry…
• The course is not prescriptive, nor is it normative.
– This is not vocational training…
• The aim is to provide an introduction to different
ways of thinking, not to tell you what to think!
– i.e. provide the origins of and fundamentals behind
practice, rather than to tell you how to undertake
such practice.
– As such it serves as a foundation for other courses.

RECO 7074
• 7 lectures
• 1 student presentation session
• Group work (case study)
• Project management fundamentals self-study
modules
• Exam

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Lectures

Course information and

communication
• The course has a main moodle page.
– RECO7074 Management theory and projects [Section 1A,
2019]
• All slides and additional material will be posted here.
• At times materials will be posted ahead of the lectures.
Please check beforehand…

• IMPORTANT – all necessary information + potential

changes will be posted on this webpage (and no other
site). If it is not on moodle it is not true!

Course material
• 2 recommended books (sections
corresponding to lecture material).
• Papers and other learning materials made
available on the moodle page.
• Reading directions will be provided

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Assessment and examination

• 50% course work (group)
– Includes presentation (35%) and final report (65%) (no set page limit).
– Marking criteria for the presentation will be provided beforehand

• 50% exam (individual)

– 2 hours. Answer 2 out of 4 questions (1 from section A and 1 from B)
– Based on lecture topics and recommended readings.
– Further information about the exam and explanation of the types of
questions will be provided towards the end of the course.
– Most past exams are available…

• Successful completion of the self-study ’Project Management

Fundamentals’ course
– RECO7074 Management theory and projects - self-study module
[2019]
– Only pass or fail (does not affect the grade)

Project fundamentals self-study course

• RECO7074 Management theory and projects - self-study
module [2019]
– Should be available to all students registered to RECO 7074 (if
not let me know…)
– Entirely self-contained
• 11 modules
• Each module is designed as a lesson with occasional questions to keep
you on track.
– Not time constrained.
• Each lesson ends with a quiz of ~5 questions (3 attempts to get a
minimum of 60% to pass the lesson).
• When you pass you move on to the next lesson.
– Follows the syllabus of the Association for Project
Management's (APM) Project Fundamentals Qualification (PFQ)
• Send any questions you might have to me via the system
and I will collate and deal with them in class as appropriate.

Project work
• Norwegian Technologies case study
– incorporates all the key components of the course.
• Will be used to discuss issues in class each week.
• Groups to be formed before next class (Moodle).
– Groups of five.
• Half-time submission in week 4 (1-2 pages).
– Submit no later than 08.00 on 30 September (in order for me to able
to read and comment on all of them)
• Presentation on 11 November
– 12 minutes maximum
• Report
– No set word limit. Use your own judgement. 5000 is probably not
enough and 15000 is too much...
– Turnitin!
• Adopt an ’Early Warning Signs’ approach to project governance

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Interim feedback
• There is a halftime feedback questionnaire for all
courses, which you should make good use of.
BUT:

• We only meet 8 times. If there are concerns,

suggestions, or requests etc. these need to be
brought up immediately otherwise it will be too
late.
– Class representatives.
– Individually
• In person or via email.

Questions

Breaks?

Norwegian Technologies
• The case incorporates aspects of project organising,
management of projects and project management.

• What other questions should be asked?

• Do you have enough information?

SOME INITIAL QUESTIONS FOR CASE DISCUSSION

What is going wrong on the project?

- why?

Is the present organisational structure viable?

What immediate problems might the company be facing by having both a military and non-
military production?

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Introduction
to
Management Theory

What is theory?
• In social science, a way of looking at a field that is intended to have
explanatory and/or predictive implications.
– Simplifications
– Relationships between ‘factors/variables’
– Constructs
– Assumptions
• Rational man, structure/agency etc.

• “Every managerial act rests on assumptions, generalizations, and

hypotheses – that is to say, on theory. Our assumptions are
frequently implicit, sometimes quite unconscious, often conflicting;
nevertheless, they determine our predictions that if we do a, b will
occur. Theory and practice are inseparable.” (McGregor, 1987)

• There are numerous management and organisational theories

(spanning macro, mid-range and micro levels) all of which have
their strengths and weaknesses.

Learning Objectives:
• To understand the way in which management
thought has evolved in the West since 1900.

• To compare and contrast the various theories /

schools of thought presented.

• Reflect on how these theories might be applied

in Hong Kong today.

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Your management thoughts?

Four Schools of thought

1. The Classical School

2. The Human Relations School

3. The Systems School

4. The Contingency School

Evolution of Management Thinking

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Four Schools of thought

1. The Classical School

2. The Human Relations School

3. The Systems School

4. The Contingency School

Classical School

Classical school
• Taylor: Scientific Management
– Emphasis on obtaining increased productivity
from individual workers through the technical
structuring of the work organisation and the
provision of monetary incentives as a
motivator for higher output.
– Each job broken down into component parts,
each part timed and the parts rearranged into
the most efficient way of working.

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Classical school
• Scientific management continued…
• Workers should be controlled not only by giving
orders and maintenance of discipline, but also by
removing from them any decisions about the
manner in which their work was to be carried out.

Classical School

Henri Fayol:
- We must also train the managers!
•5 Functions of Management
- 14 Principles of Management

5 Functions of Management

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14 Principles of Management

14 Principles of Management

Bureaucracy
• Tasks of organisation are allocated as official duties among
the various positions.
• There is an implied clear-cut division of labour and high
level specialisation.
• A hierarchical authority applies to the organisation of
offices and positions.
• Uniformity of decisions and actions through formally
established systems of rules and regulations.
• An impersonal orientation designed to result in rational
judgements by officials in the performance of their duties.
• (Employment is based on technical qualifications and
constitutes a ‘lifelong’ career.)
(Mullins, 1996)

Specialisation, Hierarchy of authority, System of rules, and Impersonality

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Classical School - Key Points

Classical School

Critique

Classical School - Critique

• De-skilling
• Boring
• Little flexibility

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Classical School - Critique

“The sheer silliness from a modern perspective
of many of his [Taylor’s] ideas, and the
barbarities they led to when applied in industry,
encourage ridicule and denunciation”.

Rose 1988

Four Schools of thought

1. The Classical School

2. The Human Relations School

3. The Systems School

4. The Contingency School

Human Relations School

• Moved away from structure and formal
organisation and instead began to pay
attention to the social factors at work and to
the behaviour of employees within an
organisation.

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The Hawthorne experiments…

Human Relations School

Human Relations School

Douglas McGregor

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Human Relations School

Human Relations School

Human Relation School – Key Points

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Human Relations School

Critique

Human Relations School - Critique

Four Schools of thought

1. The Classical School

2. The Human Relations School

3. The Systems School

4. The Contingency School

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Systems School
Classical school emphasised technical requirements of the
organisations and its needs – ‘organisations without people’

Human relation school emphasised the psychological and social

aspects, and the consideration of human needs – ‘people without
organisations’
Systems approach tries to reconcile these.

Systems School
‘If the structure [of an organisation] is its skeleton, the jobs,
perhaps, its muscles, the people its blood and guts and its
physical perspectives its flesh, then there still remains the
nervous system, the respiratory system, the circulation
system, the digestive system, etc. As with the body, the
systems of an organisation overlap and interlink the parts, the
structure and its members. They are of a different logical order
from the structure or the components pieces, for they are
defined by their purpose, and are concerned with flows or
processes through the structure. They are in fact ‘systems’ - it
remains the best, if the vaguest, word meaning at its broadest
only an interdependent set of elements.’

Handy (1985)

Systems School
‘If the structure [of an organisation] is its skeleton, the jobs,
perhaps, its muscles, the people its blood and guts and its
physical perspectives its flesh, then there still remains the
nervous system, the respiratory system, the circulation
system, the digestive system, etc. As with the body, the
systems of an organisation overlap and interlink the parts, the
structure and its members. They are of a different logical order
from the structure or the components pieces, for they are
defined by their purpose, and are concerned with flows or
processes through the structure. They are in fact ‘systems’ - it
remains the best, if the vaguest, word meaning at its broadest
only an interdependent set of elements.’

Handy (1985)

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Systems School

Critique

Systems School - Critique

Four Schools of thought

1. The Classical School

2. The Human Relations School

3. The Systems School

4. The Contingency School

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Contingency School
• Reappraisal of the role of management
theories.
• Each theory or school of thought can no longer
be viewed as an independent approach.
• Rather than searching for the one best way to
organise under all conditions. Structure of
organisation (and success) is contingent upon
the nature of the tasks with which it is designed
to deal and the nature of environmental
influences.

Burns and Stalker‘s

Two Types of Organisation

Mechanistic Organic
Organisation Organisation
Structure Rigid Flexible

Tasks, methods Well-defined Constantly

and duties adjusted
Communications Vertical Lateral
Hierarchy Hierarchy

Mechanistic Organic
Organisation Organisation

Most appropriate Routine Non-routine

for activities activities
Major concern Productivity Creativity &
innovation
Decision making Programmable Encourage self-
exploring

Lawrence and Lorsch (1967)

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Contingency School
‘Contingency theory suggests that “organisational
variables are in a complex inter-relationship with one
another and with conditions in the environment”, and that
environmental contingencies act as constraints and
opportunities and influence the organisation’s internal
structures and processes.’

Lawrence and Lorsch (1967)

The Four Schools

Key points

The Four Schools - Key Points

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Fundamentals of construction

Bygones are rarely bygones

Learning objective(s)
• To fully appreciate the practices, processes,
techniques, technologies, theories and thinking
that that will be presented in this course we first
need to appreciate the fundamentals of
construction and the construction industry.
– The nature of the product/service
– The nature of process
– The nature of the industry
– The project

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A sector that is constantly criticized

• Byggkostnadsdelegationen (2000) Från byggsekt till byggsektor. Statens offentliga
utredningar (SOU) 2000:44, Fritzes Offentliga Publikationer, Stockholm.
• Construction Industry Review Committee (2001) Construct for Excellence: Report of
the Construction Industry Review Committee. HKSAR Government, Hong Kong.
• Construction 21 Review Committee (1999) Reinventing Construction. Ministry of
Manpower and Ministry of National Development, Singapore.
• Construction Task Force (1998) Rethinking Construction. Construction Task Force
Report for Department of the Environment, Transport and the Regions, HMSO,
London.
• Department of Public Works (1999) White Paper on Creating an Enabling
Environment for the Reconstruction, Growth and Development of the Construction
Industry. Government Communications, South Africa.
• Enquête commissie Bouwnijverheid (2002) Eindrapport parlementaire enquête
commissie, The Hague.
• Royal Commission (2003) Final Report of the Royal Commission into the Building
and Construction Industry. Royal Commission into the Building and Construction
Industry, Melbourne.

A never ending stream of reports (at least one every 3 to 5 years in most developed
countries)

The constant message in these reports

(in general terms)

• The criticism:
– The construction industry is under-performing
– Costs are too high and often escalate
– Delivery is slow and frequently delayed
– Working practices are unsafe
– Too conservative; innovation is very low
• The reasons given:
– highly fragmented delivery structure
– ’lowest cost agendas’
– Conservative ’culture’
• The solutions offered:
– Hardly ever have any real impact on practice

Your views on construction

• Why is it that construction gets so much
criticism?
• Is it really that bad compared to all other
industrial sectors?

• What are the fundamental characteristics that

set construction apart from many other
industries?

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Construction is more of a service than

a product

Construction is a problem of
information

Lack of common platform

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Buying something that does not exist...

• In general, no matter of the specific merits
of the project, it was organised as – a lump
sum competitively tendered contract.
• A designer (consultant/architect) would
design and a builder would build.
• The two parties would be separated in time
through the tendering competition.
• Competitive tendering
– Or not…

Some sort of illustration…

Construction is local
• Historically true, but somewhat changing…
– Materials
– Labour
– Site specific (more about this later)
– (local laws, regulations, norms, codes etc.)

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Construction is not constant

• Seasonal

• Economic cycles

• Investment cycles

• Geographically dispersed

• (Competitive) Tendering

Traditionally construction is site

specific

The shape of the Hong Kong

construction market
• In 2017, there were 24,841 companies engaging
in the Hong Kong construction sector, of which
24,438 (98.4%) had less than 50 employees (most
significantly less)
– additionally there were 2009 architectural, surveying
and engineering consultants (95.9% SMEs).

• Sub-contracting is the norm! (often to the

extreme)

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The project coallition

Division of roles, responsibilities and

liabilities
• Strict separation!

Why so conservative?
• Norms, standards, codes, regulations, laws…
• Institutionalised practices
• No common platform…
• Cash flow business
• Learning (explore/exploit)

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Finally
• There are two sides to the coin!
– Most of the core structural reasons behind the
criticism is also what makes construction work so
well.

• Construction is so much better than its

reputation! (at least when it wants to be).

Coming classes
• Individual level
• Organisational level
• Focus is on the project based organisation and
project organising

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