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Managing construction projects requires a sound understanding of design and construction processes, but it also requires knowledge of modern management practices. There are specific objectives and constraints within construction projects, such as timescales for completion. Managing construction projects requires similar approaches to those found in specialist industries, such as aerospace, chemicals and energy fuels, despite differences in technology, procedures and processes. (Barrie, Donald S, and Boyd C. 1984)
According to Halpin, Daniel W, and Ronald W (1980), there are many specific areas of knowledge that a project manager requires and which the Project Management Institute focuses upon: such as, Project integration management that identifies the need coordinate various elements of the project effectively, Project scope management that identifies what work should be included and its limitation, Project time management that creates a clear schedule for the project, Project cost management that establishes budget controls and resources needed, Project quality management that ensures all practical requirements are met, Project communications management that identifies clear communications, both internal and external, Project risk management that will seek to identify and reduce potential risk, and Project procurement management that ensures all resources needed are obtained from source providers.
Integrated Management Systems Within Construction Organisations
To ensure successful achievement, human and material resources need effective coordination.
To identify the relationship between management and organisational systems.
To examine integrated management systems within construction organisations and their styles of management and organisational procedures.
To identify whether management or the organisation plays the major role.
The relationship between organisation and management
Organisation involves many elements, such as people, techniques, information, structure and purpose, and these all interrelate within a complex unit. The main responsibility for these elements and to achieve productivity and success remain with management; this provides benefits for organisation and society.
The relationship between management and organisation is complex and many differing views have been expressed, and it is important to analyse these views to measure the benefits and drawbacks of each.
Traditional and modern views
The views of organisation may be grouped into two areas: traditional and modern. The traditional view is that organisation requires planning, decision-making, organising and controlling.
The modern view of organisation is that it is a social system that includes people, techniques, information, structure and purpose.
Although there are modern approaches to organisation and management systems, these have evolved from established, traditional views of organisation. Traditional views have led the direction towards wide ranging development and to improvements in organisational skills for construction; for example, larger buildings, stronger defence barriers and greater living space for people have now become possible.
Management systems are of critical importance to the development of organisation, and can be identified as distinctly responsible for the establishment, growth and survival of the organisation.
Management also has an important role in coordinating human and material resources to achieve its targets for achievement. Individual managers would find this difficult, but is easier with a group approach. There are four main elements that can be identified: (1) reaching objectives, (2) managing people, (3) using techniques, and (4) an organisation. Management is often defined as a combination of planning, organising and controlling activities. Some definitions include sub-processes such as assembling resources and motivation. Other definitions condense the scheme to include only planning and implementation, but others cover the complete process with the concept of decision-making, because they suggest that decisions are the main output of managers.
Instead of focusing on management as a simplistic definition, a much wider description is needed that integrates different views in the system. Management includes people that undertake mental work within the organisation and this is a key subsystem (a state university) of the organisation and linked to other subsystems, as a result these become the central power for these systems.
The organisation is developed from a larger environmental system and, because of this, must be related to socio-human values of its environment. The organisational environment is also an open and dynamic system.
To analyse the organisation and systems within construction units, it is important to understand the structures involved, such as basic input-output processes, as this provides an excellent mechanism for designing and evaluating objectives and performance for the organisation.
3-4-1 Organisational outputs
To identify the output of the organisation, analysis of the services it provides is required, and the process for measuring the value that is created or added by the system relates to the level of client satisfaction. This measure can differ between clients, as this would refer to the criteria of each output, such as the organisation of a hospital compared to that of a construction company would each have different criteria.
3-4-2 Organisational inputs
An organisation generates value in the form of goals and services from the inputs or resources it needs and then transforms. These include four elements: human, physical, money and data resources. These elements can be classified in various ways as below:
Human resources. Labourers, engineers, accountants, faculty, nurses, etc.
Physical resources. Equipment, facilities, buildings, materials, office supplies, etc.
Money resources. Cash in hand, debt financing, owners' investments, sales revenues, etc.
Data resources. Historical, projective, cost, revenue and manpower data (related to other kinds of resource classifications)
3-4-3 Relationship with society
Measuring the value of management can be directly related to how it reacts to rapidly changing socio-human needs within the organisation. The level of integration of the attitudes of all people involved within the organisation is directly related to improved coordination, so that organisational objectives are achieved more efficiently.
Risk management is most effective when a prioritization process is followed, which means that risks with the greatest potential loss or the greatest probability of occurring are dealt with first, and risks with lower levels of loss or occurrence are dealt with in a descending order of identified importance. This is a complex process, as risks with high probability of occurrence but lower loss predictions have to be set against risks with a high loss probability but with a lower predicted likelihood of occurrence.
This essay focuses on practitioners (engineers, architects, project managers, quantity and building surveyors) who require a clear and simple introduction to project risk. However, the main aim of this paper is to demystify the topic of risk within project management.
This essay demonstrates how professionals in construction organisations can make consistent predictions about project risk and to develop better judgement in analysing project risk, and focuses particularly on the avoidance of all possible risks in projects. However, this is not a simplistic process of checklists or model approaches to identifying and handling risks in projects.
Analysis and interpretation
First, it is necessary to define risks clearly so that managers gain a better understanding of what risks are and where they may be encountered.
"Risk and uncertainty characterize situations where the actual outcome for a particular event or activity is likely to deviate from the estimated forecast value.'' (Aldousari r,.....)
Risk has a volatile capacity and the outcome may be better or worse than originally predicted, and these aspects have been referred to as upside and downside risks.
It is essential to create a balance between allowing high risk elements to be adopted within projects, and to creating restrictions in projects to eliminate all potential risks; both approaches can lead to decisions that may impair the overall success of the project and profitability for the organisation. The main concern is how to take reasonable and sensible risks, and not trying to avoid all possible risks within a project. The predicted timescale and cost quotation for any project, as well as subcontracts, components and processes are all linked to risk elements.
''Exposure to the possibility of economic and financial loss or gain, physical damage or injury, or delay as a consequence of the uncertainty associated with pursuing a particular course of action'' (Champman, 1991)
There are many statistically identified business decisions that are made on a repeated basis, and with a number that have a direct relation to current decisions. Therefore, there are four risk area that are generally used for business decisions:
High likelihood __ high effect
High likelihood __ low effect
Low likelihood __ high effect
Low likelihood __ low effect
The effects might be upside or downside, positive or negative. The low likelihood __ low effect is the least important type of risk category.
Economic development is unlikely to take place without some risk and managers are often categorised as risk neutral, risk seekers or risk averse. Successful entrepreneurs are categorized as risk seekers and they accept a higher exposure to risk, but accept greater variability in profit, and as a result, risk seekers tend to underrate risk. In contrast, most business decision makers are highly risk averse as they identify all possible obstacles, which are shown by empirical studies, and risk avoiders tend to overrate risk. Consequently, risk is very much related to personal attitudes of managers and their experience and training in risk management.
Sources of risk
According to Praftery (1994), there are five types of project risk and these are: Dimension, Intensity, Complication, Innovation and Physical Location. (Categories of risk illustrated in Table 1). There is much empirical proof relating to project time and cost overruns, which demonstrate that original predictions of such important elements of project management are often too optimistic, with insufficient regard to adequate risk management. Furthermore, there are six causes of risk that are external to the project that are: Inflation, Price Escalation on Input Resources, Market Situation, Materials and Work, Political Uncertainty and Climate.
Praftery also believes that most critics of construction project risk begin with what is identified as the risk management cycle. This is demonstrated in Figure (1) and the cycle shows a methodical approach to recognition, response and examination of risk. The goal of risk analysis is to assist the decision maker to believe in a reasonable response to the amount of risk that is exposed by the recognition and analysis phase.
3.3 Risk management strategy
Normally, a company or organisation would have an overall risk management strategy and policy in their strategic document and quality management system. The main concern for project managers of an organisation is risk ownership, relating to whether the risk is owned by the organisation or could be transferred elsewhere. A further concern for project managers is risk financing that may include budget risk allowances or contingency funding. Risk management policies should include procedures, guidelines, responsibilities and reporting on risk assessment. Employers and contractors need to be concerned with the magnitude and pattern of their investment and the associated risks.
Risk appraisal is only successful if actions taken are dependent on results. Those in project management require high levels of participation in the identification and evaluation phase, and communication within project management is very important. It is essential that an effectively introduced risk management strategy be related to the successful delivery of the identified target of the project. The success aspects that focus on responsibility and contribution ownership are management support, insight, incentive, openness, participation of key personal and learning. Therefore, these aspects should be combined with risk management methods. Identification and response phases should be focused on the risk processes, but not on the creation of a higher arithmetical model of the project.
The Impact of Technological Developments on Project Management within Construction
The most important requirement for construction companies in terms of project management is the ability to manage and share the company's documents. Removing certain core applications from individual PCs and running them on a server such as an Electronic Document Management System (EDMS) achieve this. Such tools should centralise the information needed for the organisation in an easily accessible format, allowing users to store, access and modify information quickly and easily. (Matheu, 2005).
Develop guidelines for construction companies that aim to define the basis of a quality document management system.
Create a web-based tool incorporating the system/database to give access to all authorised people to the system.
Analysis and interpretation
There are many stakeholders and phases involved in a construction project and this has led to problems of communication and information processing, and often result in conflict relationships between those involved in projects. (Matheu, 2005)
Information Technology (IT) is beginning to be used in the construction industry as a tool to reduce some of the problems generated by fragmentation. The Internet offers the best computer based technology to facilitate a collaborative working environment in construction projects. Using the Internet for communication allows information to be transferred more quickly and effectively, and it also provides new opportunities for developing systems that cross an organisation's boundaries and enables better teamwork and workflow automation. (Rojas and Songer, 1999)
Recently, a concept of how the web and its associated technologies can be used to manage construction projects has been widely acknowledged by practitioners. This concept is often referred to as a Web-based Project Management System (WPMS), which promises to enhance construction project documentation and control and revolutionise the way in which a construction project team conduct business.
Construction projects have always been controlled by traditional management structures, however significant developments in technology in recent years have produced important software packages for the industry, which have changed the way construction projects are managed. Also, the emergence and development of personal computing has significantly changed the way many people work, particularly in this sector of industry.
The most important aspect of managing construction projects is effective handling of the project information and communication flow. New forms of communication, such as email, have changed the interaction between workers, management and clients, and have shown the differences between those parties that use IT tools and those who do not.
There have been revolutionary changes in organisational communication that has been directly related to the development of new technologies. Information is now available to managers and other employees in a faster and more reliable way, and in larger quantities than ever before. Information now has to be systematically managed and information networks carefully designed and monitored. Information technology is now making a major impact on planning, decision-making and control, due to the flow, speed and reliability of information.
Whilst some companies are investing in new technology for their management systems, as well as for their construction projects, other companies are unable to invest such funds and tend to still use paper-based project management systems that often result in duplication, loss and organisational difficulties.
Redesigning traditional working practices is important for communication and information management, as this can take advantage of new possibilities of a project web, so that working procedures will be better and more efficient.
Attorneys representing construction companies in cases of litigation relating to defects in building work claimed by clients need sound evidence that is presented by experts in this field to be successful in protecting the companies' interests. When a team of experts work with attorneys, negotiation and equitable settlements are often achieved amicably. (Thomas E. Miller, 1999)
Errors that occur frequently on construction sites have been studied by several researchers (Burati and Farrington1987; Josephon and Hammerlund 1998; Opfer 1999) and can be expensive for the contractors and clients due to budget overspend and delayed timescale. Research has shown that up to 15% of construction cost is wasted as a result of defective components detected late during building work (Burati and Farrington 1987) and 5% of construction cost is wasted due to renewing defective components identified during routine maintenance (Josephson and Hammerlund 1998).
Aims and Objectives
Construction defects may include weaknesses in design, planning, supervision, inspection, the construction of any building or observed weaknesses of the construction, a failure to comply with standard building procedures or the completed building or construction does not meet the reasonable expectations of the client. Some of the most common and high-cost construction defects include:
Structural integrity - concrete, masonry, carpentry, unstable foundations
Water intrusion (often resulting in toxic mould)
Thermal and moisture protection
Doors, windows and glass
Analysis and interpretation
When dissatisfaction with finished building projects resorts to legal proceedings, courts identify construction defects in the following four categories: design deficiencies, material deficiencies, construction deficiencies, or subsurface deficiencies.
Design Deficiencies - This is identified when architects design buildings or systems that ultimately do not perform as intended or specified. Whilst the design may comply with the client's expectations from contracts exchanged to include agreed elements of form, function, aesthetics or cost, the completed project may still not meet the expectations of the client who may believe that the original design contained defects that were the responsibility of the construction company. One common problem in building projects relates to roofing defects that leak in wet weather. Often these roofing leak problems are due to incorrect specification of building materials that allow water penetration, as well as poor drainage systems and structural components contained in the design, which often result in surface cracks and the deterioration of roofing materials.
Material Deficiencies - This relates to the use of poor quality building materials that may lead to defects such as windows that leak in wet weather or do not function correctly, despite being installed correctly. Leaking windows are a common problem in construction and the problems can only be overcome effectively by using good quality materials. However, window leaks may also result from other defects linked to material deficiencies, such as improperly flashed windows, rough framing not flush with outside openings, window frame racked during storage or moving, waterproof membranes, asphalt roofing shingle, particle board, inferior drywall and other wall products used in wet or damp areas, such as bathrooms and kitchens.
Construction Deficiencies (Poor Quality or Substandard Workmanship) - This relates to poor quality working practices and insufficient monitoring and inspection during construction and may be identified by the client after completion of the project. Often poor quality workmanship is identified following the effects of weather conditions, such as water infiltration in parts of the building structure. Other defects that can be attributed to construction deficiencies may include cracks in foundations, floor tiles, walls, rotting wood or other building materials, pest infestations, electrical and mechanical problems, plumbing leaks and poor sound insulation and fire resistive materials used between adjacent house units.
Subsurface / Geotechnical Problems - All building projects need careful research into soil conditions at the proposed building site, as soil conditions vary widely in terms of their suitability for construction or the degree of expense and timescale to render the subsurface suitable and safe for building work. Expansive soil conditions are a significant problem for construction projects, and there have been many problems when housing developments have been built on sloping areas or built into hillsides and where it has been difficult to lay stable foundations. If the subsurface is not correctly compacted and prepared for adequate drainage, structural defects are likely to occur such as vertical and horizontal settlement (subsidence) and movement (expansion). In climates with extremes of weather, heavy rainfall may lead to flooding, soil loss and landslides, and these may lead to significant damage to buildings, such as cracked foundations, floor slabs, and other damage. A worst-case scenario in some instances could render a building uninhabitable, as well as uninsurable.