FACULTY OF ENGINEERING
DEPARTMENT OF CIVIL ENGINEERING
2014-2015 FALL SEMESTER
CIVL 493 CONSTRUCTION MANAGEMENT
ASSOC.PROF.DR. İBRAHİM YİTMEN
ORGANISATIONS IN
CONSTRUCTION
CONTRACTUAL RELATIONSHIPS
• In order to finish a project, several parties have to cooperate together and a contractual relationship has to be
established among them so that each party knows what
his/her duty is.
• If a client is lacking certain skills or does not have
experience in the construction industry, that client will need
to obtain advice on one or more of the following:
•
•
•
•
•
•
•
•
•
Feasibility study
Design of the works
Specialist equipment installations
Preparation of contract documents and other contract
procedures
Tendering evaluation and procedures
Construction programming and scheduling
Supervision of construction works
Certification of completed work for payment
Dealing with variation orders and claims for additional3
payment.
CIVL 493 CONSTRUCTION MANAGEMENT
TYPES OF CONTRACTUAL RELATIONSHIPS
Organizational contractual relationships can be
classified into three groups:
• Traditional contractual organization
• Design and construction organization
(TURNKEY)
• Professional Construction management
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CIVL 493 CONSTRUCTION MANAGEMENT
TRADITIONAL CONTRACTUAL ORGANIZATION
• Client has a direct contract with consultants to carry out
the design and probably the supervision of construction.
• The client also has a direct contract with a contractor.
• The contractor will likely have a contract with all kinds of
subcontractors (e.g. material suppliers).
• Some suppliers and/or subcontractors may be
nominated by the client or the consultant.
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CIVL 493 CONSTRUCTION MANAGEMENT
TRADITIONAL CONTRACTUAL ORAGANIZATION
CLIENT
CONSULTANT
CONTRACTOR
SUBCONTRACTOR
OWN WORKERS
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CIVL 493 CONSTRUCTION MANAGEMENT
DESGIN AND CONSTRUCTION ORGANIZATION
• The client has a contractual relationship with a
design and construct contractor.
• If the client is lacking skills in preparing a tender
and evaluating it, a consultant may be appointed
to do it for the client.
• The contractor may arrange a design consultant if
the contractor is lacking design skills from within
his/her organization.
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CIVL 493 CONSTRUCTION MANAGEMENT
DESIGN AND CONSTRUCTION ORAGANIZATION
Client
Consultant
Designer
Design &
Construct
contractor
Constructor
Subcontractors&
Suppliers
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CIVL 493 CONSTRUCTION MANAGEMENT
PROFESSIONAL CONSTRUCTION MANAGEMENT
• The client has a contractual relationship with a
management contractor.
• The client also has a direct contractual relationship
with a design and cost consultant.
• The management contractor appoints a work
contractor and he has a direct relationship with the
work contractors that will carry out the construction
works.
• Negotiated professional fee for construction
management services.
• Negotiated professional fee for design services.
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CIVL 493 CONSTRUCTION MANAGEMENT
PROFESSIONAL CONSTRUCTION MANAGEMENT
Client
Design and Cost
Consultant
Management
Contractor
Work
Contractor
Subcontractor &
Supplies
CIVL 493 CONSTRUCTION MANAGEMENT
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CONSTRUCTION MANAGEMENT ORGANIZATION
(PROFESSIONAL CONSTRUCTION MANAGEMENT)
• The client enters into a direct contract with a
professional construction manager, design and cost
consultants and works contractor.
• The works contractor is in a direct contractual
relationship with the client and not the construction
manager.
• The construction manager will perform managerial
functions assigned directly from the client.
• Fixed price, unit price or negotiated contracts will be
used.
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CIVL 493 CONSTRUCTION MANAGEMENT
CONSTRUCTION MANAGEMENT ORGANIZATION
(PROFESSIONAL CONSTRUCTION MANAGEMENT)
Client
Construction
Manager
Consultant
Work
Contractor
Subcontractors
& Supplies
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COMPANY ORGANIZATION
• Objective of organizing a company is “to arrange all required resources”
so that the functions of company perform properly and works are
accomplished effectively.
• Organizing must:
1. Determine what individual job positions are required.
2. Define the duties and responsibilities of each job position.
3. Establish the working relationship among the job positions.
• The organization structure is the product of organizing and will
accomplish the following:
• Aid Coordination
• Procedures, orders, and objectives must be communicated for optimum
performance.
• Team effort.
• Viewing each function of the firm as isolated from others defeats for effective
coordination.
• Expedite Control
• Control is the mechanism by which profits are realized.
CIVL 493 CONSTRUCTION MANAGEMENT
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COMPANY ORGANIZATION (continued)
• Emphasize Human Relations
• People problems such as worker resentment, poor morale, low
productivity, high worker turnover must be effectively dealt with
for long term success.
• Provide Benefits of Specialization
• Potential for learning which can enhance productivity. Potential
difficulties must be weighted against potential benefits.
• Overspecialization can lead to isolation and lack of communication.
• Some firms rotate personnel among work assignments.
• Other firms might have production workers specialize while exposing
management to variable work assignments.
• Pinpoint Responsibility - Necessary to reward good performance
and correct poor performance.
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CIVL 493 CONSTRUCTION MANAGEMENT
COMPANY ORGANIZATION (continued)
• Useful definitions pertaining to organizational discussion:
• Authority - Ability to act or make decisions without obtaining
approval from a superior. Authority can be delegated.
• Responsibility - Accountability for actions. Although authority may be
delegated, responsibility remains for actions of subordinates.
• Duties - A specifically assigned task which cannot be delegated to
others.
• When devising an organizational structure, the individual positions of
authority and responsibility must be identified, and duties must be
assigned to each participant.
• A balance must be found between under- and over-organization.
• It is a serious weakness to burden too few with too much, while it is
equally undesirable to have an organization top-heavy with
administrators and supervisors.
• For a small firm, a single individual will be responsible for a wide range
of duties.
• Large firms will specialize much more.
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CIVL 493 CONSTRUCTION MANAGEMENT
ORGANIZATIONAL CHARTS
• Organizational Chart is a pictorial format showing all positions of:
i) responsibility
ii) all lines of supervision and authority
iii) the lines of communication within the organization
• They are effective for quickly describing a company's structure.
• Chart is useful for employees. Shows their position in the company,
identifies their supervisor, those whom they supervise, and the nature of
their duties.
• The two predominant aspects of most organization charts are those
depicting vertical and horizontal specialization.
• Vertical specialization refers to the hierarchical structure of authority.
• Horizontal specialization is the differentiation of functions within a level of the
hierarchy.
• Horizontal specialization can take in different forms. The most common
forms are:
• Functional
• Pure project
• Matrix
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CIVL 493 CONSTRUCTION MANAGEMENT
TYPICAL CONSTRUCTION COMPANY ORGANIZATION CHART
BOARD
PRESIDENT
ADMN. AND FIN.
DEPT.
TECH.DEPT.
(ENGINRG)
CONSTRUCTIN DEPT
PROJ.MGR
PROJ.MGR
SPECIAL STAFF
PROJ.MGR
LEGAL COUNSEL
General Administration
DSIGN, DWGS
PROJECT ORGZIN PROJECT ORGZTN
PROJECT ORGZTN
SAFETY
Banks & Finance
ESTIMATING & BID PREPARTN
LABOR RELATION
Accounts & Bookkeeping
MONITORING & CONTROLLING
Personnel & Payroll
CE 493 CONSTRUCTION MANAGEMENT
Public Relations
Purchasing Procurement
RELATION WITH GOVT.AGENCIES
COMPUTER
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TYPICAL PROJECT ORGANIZATION CHART
Project
Manager
Secretary
Deputy project
Manager
Assist Proj
MNGR
PL &
Reporting
MNGR
Design
MNGR
Logistics
Accounts
MNGR
Administ MNGR
Design ENG
Personnel
Head
Camp
Doctor
Draftsnman
Personnel
ADM
Cashier
Material
foloow up
Custom
clr
Stock Control
Local
Purchase
Workshop
ENG
Kitchen
Chief
Store Keeper
Infrastr &
AUX BLDS
Workshop
ENG
Site
Engineer
Camp
Boss
Q.C & CONC
PROD
Laboratory
Surveying
Work
Surveying
Engineer
Mechanical
Works
Electrical
work
Structural
Works
Electrical
ENG
Reception
BLD
Dormitory
Chief
Finishing
Works
Site
Engineer
Site
Engineer
Site
Engineer
Site
Engineer
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FUNCTIONAL FORM OF ORGANIATION STRUCTURE
• Functional Organization Structure results in horizontal
according to functional skills and types of work task.
grouping
• The advantages of the functional organization structure are:
• They are simple.
• They can achieve a high degree of flexibility, because people in the department
can be assigned to the project, then immediately re-assigned to other work.
• They provide good support as the work is usually carried out in the department.
• The functional department provides the normal career path for advancement and
promotion.
• Lines of communication within the department are short and well established.
• There is quick reaction time to problems within the department.
• They offer clearly defined responsibility and authority for work within the
department.
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CIVL 493 CONSTRUCTION MANAGEMENT
FUNCTIONAL FORM OF ORGANIATION STRUCTURE
(CONTINUED)
• The disadvantages of the functional organization structure are:
• No single point of responsibility as the project scope moves from one
department to another, this can lead to coordinating chaos.
• On multi-disciplined projects there are no formal lines of communication
between the people within the different departments.
• Competition and conflict between functional departments may limit effective
communication of important project information.
• Departmental work may take priority over project work.
• For functional managers the project is not always the main focus of concern,
particularly when the scope has moved to another department.
• Weak external
stakeholders.
co-ordination
with
the
client,
suppliers
and
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CIVL 493 CONSTRUCTION MANAGEMENT
other
FUNCTIONAL ORGANIZATION CHART
General
Manager
Director Level
Engineering
and
Development
Production
and
Manufacturing
Sales and
Marketing
Accounting
and Legal
Division Level Department
Level Section Level CE 493 CONSTRUCTION MANAGEMENT
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Denotes continued breakdown
PURE PROJECT ORGANIZATION STRUCTURE
• Project organization structure is based on assigning projects to each
organizational unit.
• Here the various functions, such as engineering and finance, are performed
within each unit.
• The advantages of the pure project organization structure are:
• Strong control by a single project authority.
• With centralized authority, decisions are made quickly.
• Encourages performance, schedule, and cost tradeoffs.
• Personnel loyal to a single project.
• Interfaces well with outside units.
• Good interface with customer.
• All members of the workforce report directly to the project manager.
• The lines of communication are shorter than the multi-disciplined functional
route.
• With the one boss situation, the lines of communication, responsibility and
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authority are clear and undisputed.
• There is a holistic approach to the project.
CIVL 493 CONSTRUCTION MANAGEMENT
PURE PROJECT ORGANIZATION STRUCTURE
(CONTINUED)
• The disadvantages of the pure project
organization structure are:
• Duplication of resources, as similar activities and processes
are performed by different elements of the organization on
different projects i.e. inefficient use of company resources.
• Less opportunity for technical interchange among projects.
• Minimal career continuity for project personnel.
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CIVL 493 CONSTRUCTION MANAGEMENT
PURE PROJECT ORGANIZATION STRUCTURE
President
Engeneering
Manufacturing
………
Marketing
Engeneering
Vice-President
project 2
………
Vice-President
project 1
Engeneering
Vice-President
project 30
Engeneering
manufacturing
Marketing
Marketing
Manufacturing
………
………
CE 493 CONSTRUCTION MANAGEMENT
………
Manufacturing
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Marketing
MATRIX ORGANIZATION STRUCTURE
• Matrix organizational structure attempts to place equal emphasis on technical
and product development and is a major departure from traditional structures.
• This is achieved by having a structure in which responsibility for reporting is
to two authorities.
• It is used for undertaking project oriented activities where the traditional
functional or departmentalized structures would be inappropriate.
• This form of structure is frequently used as a temporary expedient.
• Each group of specialists reports to a functional manager of their particular
group of expertise and to a project manager.
• The project manager is responsible for achieving the project objectives by
building a project team consisting of members of functional groups.
• In matrix organization, duplication of functional units is eliminated by
assigning specific resources of each functional unit to each project.
CIVL 493 CONSTRUCTION MANAGEMENT
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MATRIX ORGANIZATION STRUCTURE (CONTINUED)
• The advantages of matrix organization structure are:
• Project has a clear single point of responsibility - the project manager.
• Combines strength of functional and project-oriented organization.
• The project can draw on the entire resources of the company, when several
projects are operating concurrently, the matrix structure allows a time-share
of expertise and equipment, which leads to a higher degree of resource
utilization.
• Rapid response to the client's needs. The client communicates directly with
the project manager.
• Good flow of information (dissemination) within the project.
• The needs of the project and functional departments can be addressed
simultaneously by negotiation and trade-off. The project is mainly
concerned with what and when (scope and planning), while the functional
department is concerned with who and how (resources and technical).
• Problem-solving can draw on a much wider base for ideas and options –
brainstorming.
• Teams of experts within the functional department are kept together even
though the projects may come and go. Therefore technology, know-how,
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expertise, and experience are not lost when the project is completed.
CIVL 493 CONSTRUCTION MANAGEMENT
MATRIX ORGANIZATION STRUCTURE (CONTINUED)
• The following disadvantages are inherent with the matrix structure:
• They are more complex because of the additional number of managers
involved that need to be kept informed and consulted.
• Dual responsibility and authority leads to confusion, divided loyalties,
unclear responsibilities, and conflicts over priorities and allocation of
resources.
• They do not encourage strong staff commitment to the project, particularly
when staff from functional departments are assigned on an as-needed
basis.
• Reaction times although faster than the functional structure, may get
bogged down in negotiation (there is more negotiation); so decisions could
take longer to make as more people must be consulted.
• The cost of running a matrix organization is higher than a functional or pure
project organization because of the increased number of managers involved
in the administration and decision-making process.
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CIVL 493 CONSTRUCTION MANAGEMENT
MATRIX ORGANIZATION STRUCTURE
CE 493 CONSTRUCTION MANAGEMENT
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PROJECT MANAGEMENT TEAM
Project Management Team (planners, administrators,
supervisors) work under the direction of project
manager and has the following objectives:
1.
The production of construction works satisfy client
functional requirements.
2.
Completion of the project within specified time limits.
3.
Completion of the project within specified cost limit.
4.
Construction to specified standards.
5.
Preservation of health and safety of people involved.
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CIVL 493 CONSTRUCTION MANAGEMENT
TEAM ORGANIZATION
a) Project Manager
•
Project Manager keeps authority and responsibility
to manage the project.
•
In appointing project manager, client will consider:
 the qualification and experience required,
 persons to whom he is responsible,
 his terms of reference
 limits of his authority,
 his personal qualification, leadership skill.
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CIVL 493 CONSTRUCTION MANAGEMENT
TEAM ORGANISATION (CONTINUED)
b) Steering Committee
In government project there may be difficulties in fitting a
project manager. Therefore, a steering committee is
established having functions of:
 determining terms of reference for project
manager's team
 approving the project management team
 monitoring progress of the project
 removing obstacles to progress the project.
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CIVL 493 CONSTRUCTION MANAGEMENT
TEAM ORGANISATION (CONTINUED)
c) Assistants of Project Manager
The composition of the team changes as the
project progress.
•
The minimum continuous requirements for Project
management team are:
 Project manager
 Secretary
• For large projects there may be fulltime
 Planning engineer
 Quantity surveyor
 Health and safety specialist.
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CIVL 493 CONSTRUCTION MANAGEMENT
CONTRACTOR'S SITE ORGANIZATION
A good contractor always,
 keeps the staff at a minimum
 places the right man at right position
 gives freedom and responsibility
 well defines the areas of each man
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CIVL 493 CONSTRUCTION MANAGEMENT
KEY SITE PERSONNEL FOR CONTRACTOR
Contractor site key personnel are:
a)
b)
c)
d)
e)
the agent
site engineer
Office manager
general foreman
plant manager (foreman)
For large projects a contract manager also is appointed.
For small jobs, the duties of agent and site engineer may be combined
and one foreman may be employed instead of two foreman.
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CIVL 493 CONSTRUCTION MANAGEMENT
CONTRACTOR’S SITE KEY PERSONEL (CONTINUED)
a) The Agent
 responsibility to direct and control the whole work.
 has power to employ men, hire machinery, purchase
material and employ sub contractors
 all information are centralized upon him
 his instructions go to right person by office manager and
subagents.
 his power depends on :
 size of the job
 distance from head office
 policy of the firm
 his standing within the firm
 knowledgeable in civil engineering works
 a good organizer and command men
 business senses to make profit
CIVL 493 CONSTRUCTION MANAGEMENT
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CONTRACTOR’S SITE KEY PERSONEL (CONTINUED)
b)
The Site Engineer
 checks that works are constructed to the right lines
and levels.
 advises the agent on design and engineering matters
 he has a section to look after in detail, measuring up
the works in his/her section weekly or monthly.
 his duties are:
taking site levels
levelling & lining construction works
planning temporary works, roads, bridges
dealing with power supply & water supply & drainage.
keeping progress and quality reports.
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CIVL 493 CONSTRUCTION MANAGEMENT
CONTRACTOR’S SITE KEY PERSONEL (CONTINUED)
c) The Office Manager
 The agent’s principal administrator within site office.
 His responsibilities are:




papers works
order for materials
receiving and checking accounts
making pay sheets etc
 also administer
 pay clerk
 order clerk
 correspondence secretary
 accounts clerks
 invoice checker
 store keeper
 Messenger
 tea boys
 staff cars drivers
 night watchmen
CIVL 493 CONSTRUCTION MANAGEMENT
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CONTRACTOR’S SITE KEY PERSONEL (CONTINUED)
d) General Foreman
 he is the agent's right hand man for the execution of works on
the site.
 he should have wide practical knowledge and experience.
 he is able to read engineering drawings
 he is actual boss of the workmen
 he has foresight and planning ability
 his major responsibility is to keep the work moving ahead as
planned.
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CIVL 493 CONSTRUCTION MANAGEMENT
CONTRACTOR’S SITE KEY PERSONEL (CONTINUED)
e) Plant manager
 He is advised by the agent for long-term plannings
 He is advised by the general foremen for short term (day
to day plannings)
 His major responsibility is
 To maintain and make services of the plant to keep them
ready to be used any time
 to maintain power supplies on the site.
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CIVL 493 CONSTRUCTION MANAGEMENT
CONTRACTOR’S SITE STAFF FOR A MEDIUM SIZED JOB
Agent
Chief
Clerk
Sub Agents
or Deputy Agent
Accounts
Clerk
General Foreman
Plant
Manger
Wages
Clerks
Assistant or Divisional
Engineers
Foreman
Carpenter
Measurement
Engineers
Divisional Foremen
Fitters
Store Keeprs
Carpenter
Gangers
Electrician
Checkers
Site Engineer
Draughts men
Labourers
Labourers
Chainmen
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Typists
CIVL 493 CONSTRUCTION MANAGEMENT
THE ENGINEER'S SITE ORGANIZATION
a. Resident Engineer
 He is the engineer's representative & chief responsible on
the site to control the works done by the contractor.
 He is the opposite member to the agent for the engineer.
 his job is of seeing the works are built as the engineer
has designed
 sees that contractor carries out all his obligations
 he is responsible in all cases only to the engineer.
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CIVL 493 CONSTRUCTION MANAGEMENT
DUTIES OF THE RESIDENT ENGINEER
1. Coordinate the work of various contractors; to agree
detailed programs of works; to check that all necessary
instructions have been given to contractors,
2. Check all the materials are ordered in good time and all
necessary permits for them are obtained,
3. See that the requirements of specifications in regard to
materials and workmanship are compiled with the
contractors.
4. To watch for faulty workmanship or material, and to issue
instructions for remedying such faults.
5. Check the line and level and layout of the structure
conforms to the drawings.
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CIVL 493 CONSTRUCTION MANAGEMENT
DUTIES OF THE RESIDENT ENGINEER (CONTINUED)
6.
Issue further instructions and classifications of detail as
are necessary,
7.
Measure the amount of the work done for the purpose
of payment and to calculate such payments
8.
Keep records of all measurements and test, and to bring
plans into conformity with the work as actually executed.
9.
Act as a channel for all claims and disputes and to
provide the facts which are relevant
10.
See that the finished works are free from defects, tested
and set properly functioning
11.
Report regularly to the engineer on all the above matters.
However, the resident engineer may have delegated43 to
him other duties.
CIVL 493 CONSTRUCTION MANAGEMENT
THE RESIDENT ENGINEER'S STAFF
i) Engineering Assistants
 They assists the Resident engineer
 The resident engineer continuously inform them about
the progress
 They take part in every section to improve their
experience,
ii) Inspectors
 Continuously inspect the work outside and they usually
work outside
 They are skilled tradesmen having practical experience
 They advise the resident engineer when needed
 They must be able to judge quality, workmanship and
finish of work
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CIVL 493 CONSTRUCTION MANAGEMENT
ENGINEER’S CONTROL STAFF FOR MAJOR PROJECTS
Resident Engineer
Office
Manager
Contracts
Engineer
Deputy or Assistant
Resident Engineers
Specialist
Engineers
Clerks
Account
Clerk
Assistant
Engineers
Soil
Mechanics
Typists
Records
Clerk
Inspectors
Concrete
Draughts men
Survey
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Etc.