AR 523A: PROJECT MANAGEMENT

Preliminary Handouts.

1. Introduction to Organization and Management

The driving force behind every organization is its management team. Different teams operate indifferent 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 future success.
The organizational structure of small enterprise may be very simple. The owner is usually the manager. He has daily contact with all the
people of his organization. He is the one who establishes the policies. He 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 many reasons and circumstances responsible behind this
failure, but the most frequent reason is poor management.
A. Organization
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, 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 organizational design itself.
A good executive may be able to secure good results with a poor organization, and a good organization may produce results from
a poor executive. But the ideal set up is, a combination of good organization and a 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 to the call for a change of those needs.
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.
The Structural Elements of an Organization are:
1. Men. These are the different members of the organization starting from the very top to the last workman.
2. Material. 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.
The Major Elements of Organizational Structures are:
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 relationships. Who are the authorities to do what?
3. Communication and decision process. 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 structures, policies and procedures, to the growth in
size and complexity of the enterprise. This is true particularly when the owner-manager has been successful with his small
enterprise. Because of fear to change his way doing things as his company grows larger, lest he lose the one ingredient that has
made him successful, to which he is not at all sure which ingredient that may be.

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 According to Peter Drucker, traditional structures are no longer adequate for todays complex organizations. A management
structure is a means of attaining the objectives and goals of an institution. Thus, should be responsive to respect the needs and
changes of those needs.

B. Principles of Good Organization

Business organization has conditions peculiar to itself. A set of rules cannot be laid down that would be applicable to organizations
of all enterprise. However, certain underlying principles can be given and among them are
1. Principle of Objective. A clear and complete definition of the objective must be known. Any business concern or individual
must adhere to a definite purpose or aim. For example, if the aim is to make plans and construct a building, 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
objective 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 objective 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 function 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. The nature of the business
determines the main function of the business. The nature is the proper basis for organization to be established. If an
organization of any concern is built around the functions, proper distribution of work could be easily done, thus, eliminating
any one man to become so powerful and so dependable upon to be indispensable.
5. Departmentalization. In big organizations, the scope of operation can be very broad, necessitating departmentalization to
achieve a smoother flow of operations. Departmentalization can be through functions, products, location, or by projects.
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 which he is responsible
of, and also whom to report to and consult in case of problems and doubts.
7. Limited Span of Control. The number of subordinates an executive can manage effectively.

Organization and Business

Business had been defined as an organization of people with varied skills, which uses capital and talents to produce goods or
services, which can be sold to other of more than their costs, or it may be considered as; the system through which 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 determine the amount of profit to be realized, which is the primary goal of
inverting efforts and capital in construction business.
To be effective, human activities have to be coordinated. Efficient coordination requires much more than an organizational
framework. At the top of the foundation is the coordination. This is the attribute that integrates all the elements of an organization
into an operating unit.
Experience proved that higher accomplishment is dependent upon the interest and willing cooperation of both the project
supervisor and the workers.
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 of handling people. Management properly applied, give individuals in the
organization the feeling of security, or recognition, of opportunity and of belonging.

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 C. Management Concepts, Structures and Control
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 applications of
sound principles of complete and reliable facts, and of good practices. When management is systematic, there can be no room for
personalities, prejudices, and unfair judgment.
Management to be successful must be scientific. Scientific management has done more to advance and win the status of
mankind today than has any single factor. By the application of the 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. Since there is always a better way of
doing a job, men will keep on experimenting and analyzing the different factors affecting their work in search of the one best way.
They will develop better methods of increasing production without increasing work time and operating cost.
Management must be humanistic. When machine 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. Human being
preferably should be led by goals they accept as justifiable, worthy and fair to all concerned. This led us to human relations. It has
been proven many times in the past that application of good human-relations pays off though cooperation and coordination
leading towards greater accomplishment.
Management Structures
The primary objective of management structure is to facilitate the coordination and control over the activities of the company. No
two companies are identical. Thus, each company should be studied in terms of its purpose, size and the nature of its business.
In any sizable organization, there should be delegation of responsibility because:
1. It is physically impossible for one person to control effectively al the works of a large organization through personal contact
with it. The manager must rely on other persons to be responsible for designated phases of the work.
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 works, Engineers for civil works, electrical works, 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.
The line of responsibility must be fixed. Everyone in the company should know to whom they are responsible. Line responsibilities
that are fringy or not distinct, will only lead to grumbling and misunderstanding throughout the personnel of the organization. For
instance, the foreman will order a certain work to be performed in one way and another supervisor will order the other way or
sometimes stop the operations. This will result to confusion and dissatisfaction of the workers and the foreman. The result is
inefficiency of the work.
On the other hand, a supervisor who cannot be sure of the bounds of his responsibility lives in fear of the possibility that he was
either meddling with someone else business or neglecting a responsibility of which he is not aware of. The line of responsibility
works in two 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.
The line of authority must be kept clear at all times in order to facilitate the ready flow of communication and control.
Management Control
Control is defined by Webster as to check or regulate to keep within limits. Yet managerial control carries with it a much broader
interpretation to apply: not only to neither check nor command, but also the whip. Not only to regulate, but also to stimulate.
Control also includes activities that require restrictive or corrective action. For instance, matters like excessive labor cost, undue
equipment failure or disproportionate fuel and maintenance costs and the likes are points that require management action and will
be accomplished only if management is aware that the conditions exist. Control however, only lead up to specific management
action specifying the necessity for action and variation from routine.
The success or failure of any enterprise depends greatly upon the manager. To him, the most effective tool for success is
management or executive control. This involves setting overall objective or measurements to serve as a yardstick for allocating
resources and for evaluating performance.

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 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. Thus, a manager must be a good planner and a good organizer. A long range
planning is the creative force for executive control. It is an ability to set the mark and anticipate the problems that block the way to
planned results.
The Manager should be a good organizer. The organization serves as the framework for delegating authority and fixing
responsibility from a higher to a lower executive level. In developing his organization, the manager should stress on getting the
right men for the right job. He must concentrate on how to get the jobs done and on how to prevent abuse and waste of resources.
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?
D. PROJECT MANAGEMENT
General Overview
Project management is the discipline of planning, organizing, securing, and managing resources to achieve specific goals. A
project is a temporary endeavor with a defined beginning and end, usually time-constrained, and often constrained by funding or
deliverables, undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value.
The temporary nature of projects stands in contrast with business as usual, or operations, which are repetitive permanent, or semi-
permanent functional activities to produce products or services. In practice, the management of these two systems is often quite
different, and as such requires the development of distinct technical skills and management strategies.
The primary challenge of project management is to achieve all of the project goals and objectives while honoring the preconceived
constraints. Typical constraints are scope, time, and budget. The secondary and more ambitious challenge is to optimize the
allocation and integrate the inputs necessary to meet pre-defined objectives.
History

Project management has been practiced since early civilization. Until 1900 civil
engineering projects were generally managed by creative architects, engineers, and
master builders themselves, among those for example Vitruvius: 1st century BC,
Christopher Wren: 16321723, Thomas Telford: 17571834 and Isambard Kingdom
Brunel: 18061859. It was in the 1950s that organizations started to systematically apply
project management tools and techniques to complex engineering projects.
As a discipline, Project Management developed from several fields of application
including civil construction, engineering, and heavy defense activity. Two forefathers of
project management are Henry Gantt, called the father of planning and control
techniques, who is famous for his use of the Gantt chart as a project management tool;
and Henri Fayol for his creation of the 5 management functions which form the
foundation of the body of knowledge associated with project and program management

Henry Gantt (18611919), the father of planning and control techniques.

Both Gantt and Fayol were students of Frederick Winslow Taylor's Theories of Scientific Management. His work is the forerunner
to modern project management tools including Work Breakdown Structure (WBS) and Resource Allocation.
The 1950s marked the beginning of the modern Project Management era where core engineering fields come together working as
one. Project management became recognized as a distinct discipline arising from the management discipline with engineering
model. In the United States, prior to the 1950s, projects were managed on an ad hoc basis using mostly Gantt Charts, and
informal techniques and tools.

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 At that time, two mathematical project-scheduling models were developed. The "Critical Path Method" (CPM) was developed as a
joint venture between DuPont Corporation and Remington Rand Corporation for managing plant maintenance projects. And the
"Program Evaluation and Review Technique" or PERT, was developed by Booz Allen Hamilton as part of the United States Navy's,
in conjunction with the Lockheed Corporation, Polaris missile submarine program; These mathematical techniques quickly spread
into many private enterprises.
At the same time, as project-scheduling models were being developed, technology for project cost estimating, cost management,
and engineering economics was evolving, with pioneering work by Hans Lang and others. In 1956, the American Association of
Cost Engineers, now AACE International; the Association for the
Advancement of Cost Engineering, was formed by early practitioners of
project management and the associated specialties of planning and
scheduling, cost estimating, and cost/schedule project control. AACE
continued its pioneering work and in 2006 released the first integrated
process for portfolio, program and project management, Total Cost
Management Framework.

PERT network chart for a Seven month project with Five milestones
The International Project Management Association, IPMA was founded in Europe in 1967, as a federation of several national
project management associations. IPMA maintains its federal structure today and now includes member associations on every
continent except Antarctica. IPMA offers a Four Level Certification program based on the IPMA Competence Baseline, ICB. The
ICB covers technical competences, contextual competences, and behavioral competences.
In 1969, the Project Management Institute, PMI was formed in the USA. PMI publishes A Guide to the Project Management Body
of Knowledge, PMBOK Guide, which describes project management practices that are common to "most projects, most of the
time." PMI also offers multiple certifications.
2. The Manager
The Manager as executive is the most difficult and has the highest degree of responsibility. The nature of his job is varied from the
simplest to the most complicated one. Being the bridge between top management and staff, he is always blamed for mismanagement,
and yet oftentimes not praised for his success. But his job is always in his mind no matter what he is.
Managers who are not prepared for the difficult task of management, break down earlier than is expected, not only because of pressure
from work but also because of mental torture caused by problems encountered and have to solve.
Quality of an Effective Manager
An effective manager must have the following qualities:
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.
A. Executive Functions and Leadership
Executive Functions
Managers do not do the actual work of an organization. His specific functions are:
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:
a. Objectives of the enterprise d. Budget
b. Policies e. Programs
c. Procedures

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 Organizing. A good organizational structure does not guarantee good performance, but a poor one makes good performance
impossible, either the caliber of the individual managers notwithstanding. Improving the organization will always improve
performance. In short, a good organizational structure is necessary though not a sufficient condition for good performance.
Directing. Directing is guiding and overseeing subordinates. One can plan, organize a staff, but until subordinates are taught
what to do & told to get on with the job, nothing gets done. In directing, two processes enter the picture; leadership & coordination.
Leadership and coordination are ultimately 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 other
in choosing and attaining particular ends. Leadership is more than excellence in administrative performance.
Coordination is the process whereby and executive develops an orderly pattern of group effort among the subordinates, and
secures unity of action in the pursuit of common purpose. How can executives coordinate efforts in their organization?
a. Clarifying authority and responsibility.
b. Careful checking and observation.
c. Facilitating effective communications.
d. Utilizing leadership skills.
Control. Control has been defined as the process by which an executive gets the performance of his subordinates to correspond
as closely as possible to chosen plans, orders, objectives, or policies.
Control calls for the evaluation of results, comparison of those with established standards, and the taking of measures to correct
discrepancies that appear.
The span of control refers to still another principle of organization. The number of persons reporting directly to one executive
should be limited because, the larger the number, the more difficult it is to supervise and coordinate them effectively.
The number that can be supervised effectively depends on such factors as the nature of the delegated responsibilities, the abilities
of the subordinates and the assistance available to him by a staff. Common practices are 4 to 8 for the top levels and 8 to 15 for
the bottom levels.
Policies and Procedures
In planning, the critical task is the formulation of policies. 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 detail the manner in which a certain activity must be accomplished.
Executive Leadership
Executive Leadership is the bridge between objectives and result. Human progress is the crowning glory of success. Success is
the result of good management. And management is the effective, efficient and economical utilization of the resources of man,
money, materials, machine, methods and memoranda.
The responsibility for management is vested primarily on the manager. He is the fellow who gets things done through the efforts of
others. He is the fellow at the top of the organizational pyramid. He is the leader of the organization, and a good leader usually
makes a good manager.
As a leader, the manager should be an example of good personal appearance, pleasant mannerisms, and good health so that he
can command respect among his subordinates. He must be a paragon of honesty, intelligence, enthusiasm, aggressiveness,
loyalty, vision, initiative, perseverance, and decisiveness as to establish employees confidence in him.
He should possess adaptability, understanding, patience and self-control, so that he will be able to see the two sides of any
problem brought to him and thus, exercising fairness to all. He must have a good judgment and leadership ability. In short, the
manager must be a boss at the same time a leader.
Leadership is the ability to motivate subordinates and other people toward the achievement of organizational objectives. The ability
to influence, persuade and motivate followers is based largely upon the perceived power of the leader.
A leader, who desires to serve, leads by example. He must possess at least a certain degree of imagination and vision. He must
be able to think ahead to visualize and to pan beyond the immediate present.
A leader must have a goal, which is practical and right. With such qualities, he will certainly command the respect of others and be
a true leader, but the best training in management is actual management.

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 New Concept of Leadership
The new concept of leadership today is a matter of service, not control. Ideal leadership is changing fast where the age of order
from above, obedience below has come to an end. People resist orders & dictates what they believe is just & fair unto them. Ideal
leadership now is to aid communication & create a sense of unity, enthusiasm and cooperation among the members of a team.
Based from theories and researches, there is certainly no best leader style or theory of leadership. The choice of the leadership
style to employ must take into account the companys objectives, policies and organizational climate. Definitely, the best
leadership style to use is the one that consider the internal environment existing in the organization.
B. Delegation of Authority and Responsibility
Delegation of Authority
Delegation of authority is the key to effective management. In order to have control, the manager must have authority. 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.
Authority however, should have a definite limitation to avoid confusion. The authority vested upon an executive should preferably
be in writing. It should be interpreted clearly to avoid misunderstanding between the boss and the subordinates.
When a work is given, it must be within the paths of authority. But before giving an order, it should be determined first if it is
necessary, properly interpreted, and whether the proper authority is behind it.
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. However, subordinates
must be trained and prepared for the job before the additional assignment is given. Otherwise, he may refuse a delegated 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.
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 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 counsel of
experienced or specialists workers in the company. On the other hand, advises which are fed by other persons who do not share
in the responsibility if of questionable value.
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; decisions 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.
C. Personnel Coordination
The company organization is also dependent upon the special 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.
1. 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 qualities.
The shortage of people who are capable of leadership and supervision of others is one of the biggest difficulties encountered by
companies, and this may be due to:
1. Lack of incentive in the supervisory positions.
2. Inadequate or ineffective recruitment of those personnel possessing potential leadership ability.
3. Insufficient training of present and potential supervisory personnel.
Virtually, project-construction bring-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 exist within the
framework of a more traditional organization.

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 People with special knowledge are abilities are selected to work on special projects. 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 the
possibility of being replaced on the job. Aside from these, there is a fear of being connected with unsuccessful project which might
affect adversely their career advancement. On several instances, when a project is phased out & the project team disbanded,
team members tend to drift away from the organization for lack of new project & the difficulty is returning back to the former jobs.
Some workers want to associate with more dynamic environments. They like challenges of working under pressure and solving
new problems. To them, project offers an opportunity to meet new people and increasing future opportunities especially if the
project is a successful one. And being connected with the project they gained status among fellow workers aside from the
increase of their tag price. Finally, working on projects inspires a team spirit, increasing their morale and motivation to achieve
successful completion of project goals.
D. Project managers
A project manager is a professional in the field of project management. Project managers can have the responsibility of the
planning, execution, and closing of any project, typically relating to construction industry, engineering, architecture, computing, and
telecommunications. Many other fields in the production engineering and design engineering and heavy industrial have project
managers.
A project manager is the person accountable for accomplishing the stated project objectives. Key project management
responsibilities include creating clear and attainable project objectives, building the project requirements, and managing the triple
constraint for projects, which is cost, time, and scope.
A project manager is often a client representative and has to determine and implement the exact needs of the client, based on
knowledge of the firm they are representing. The ability to adapt to the various internal procedures of the contracting party, and to
form close links with the nominated representatives, is essential in ensuring that the key issues of cost, time, quality and above all,
client satisfaction, can be realized.
Project Management Triangle
Like any human undertaking, projects need to be performed and delivered
under certain constraints. Traditionally, these constraints have been listed as
"scope," "time," and "cost". These are also referred to as the "project
management triangle", where each side represents a constraint. One side of
the triangle cannot be changed without affecting the others. A further
refinement of the constraints separates product "quality" or "performance"
from scope, and turns quality into a fourth constraint.
The time constraint refers to the amount of time available to complete a
project. The cost constraint refers to the budgeted amount available for the
project. The scope constraint refers to what must be done to produce the
project's end result. These three constraints are often competing constraints:
increased scope typically means increased time and increased cost, a tight
The project management triangle constraint could mean increased costs and reduced scope, and a tight
budget could mean increased time and reduced scope.
The discipline of project management is about providing the tools and techniques that enable the project team, not just the project
manager, to organize their work to meet these constraints.
3. Scientific Management
The root of management science extends to the work of Fredrick W. Taylor, who propounded the machine model or scientific or task
management theory with the following peculiarities;
1. Division of labor and specialization.
2. Unity of command and centralization of decision making
3. One way authority
4. Narrow span of control
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.

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 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 comes to be closely associated with the management of various enterprises. Out of this, Industrial Engineering was
born. Today, it is a descriptive of the work of functional staff responsible for activities such as:
1. Incentive Standard
2. Methods Analysis
3. Quality Control
4. Production Control
5. Materials Handling
The obvious strength of management science is its objectives, quantitative treatment of management problems. The treatment is
characterized by;
1. 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
Business capital have long been 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:
1. Organization
2. Financing
3. Office and Field Operations
4. Inventory and control and in fact almost all phases of the business
History has proven that Engineers 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 talkers, 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.
As an effective executive, Engineers do not need to make many decisions because he solves generic situations through a rule and
policy. He can handle most events as cases under the rule. That is by adaptation.
Engineers as executives are not paid for doing things they like to do. They are paid for getting the right things done and most of all in
their specific task, that is, the making of right decisions. To be effective is the job of the executive. Engineers have 5 habits in mind.
1. They know 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 priorities. 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 know that to make many decisions fast means to make the wrong decisions. What is needed are few,
but fundamental decisions.
Over the many years since scientific management is introduced, specialization has certainly raised efficiency and 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 contribute. The term simplification is often used to designate the cooperative
project. Workers acceptance of the 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 & workers for improvements, overlook the fact that the persons who spend 8 hours or more in
a day on a job are perhaps the one best informed about & 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 thinking about new methods and techniques, is
the better.

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4. Humanistic Management
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, and our management is anchored 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 companies
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 management philosophy,
goals and ideals of the company. The manager of the company must be clear in his own mind about what the purpose of his company
is, what its ideals area, how he intends to conduct business and what concrete goals he should establish for it in the ensuing years.
Sound business development is dependent in having such a well thought out management plan for without such a plan one cannot use
personnel, technology, and capital, to their full potential.
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 expected 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 a good manager to
have well defined long-range goals for the company; what should it be like in the distant future? What contributions should it make to
society? On other words, the manager must have a vision of what the company should be 100 or even 200 years.
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 three management philosophies, which are indispensable factors in success of enterprise
management, namely: Goal, Ideal, and 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 are 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 human.
Any manager can do something dishonest if he has in mind to do so. Whether done unconsciously or deliberately, the result is the
same, and the employees will never be able to forgive or 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 times. Open management not only encourages employees to work harder but also makes the manager and his
employees realize that dishonest acts are absolutely in-excusable.
The fourth key to success is the collective wisdom of all its employees. These are distinguished managers who always think things 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 not feel the need for talented employees with decision making skills, and so good human resources
do not gather around him. He will not take time to develop the talents of any employees who do happen to be under him. He wants
people to simply follow his orders nothing more.

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 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 ones employees is a good way to increase employees 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 function as a manager unless he can assess data calmly and make successful projections. He cannot allow himself
to be influenced by his own interest or personal feelings. Managers as human being have prejudices and preconceived ideas and tend
to adhere to one way of thinking out of habit.
Five Key Points to Success in Enterprise Management
1. 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 succeed in cultivating its human resources.
1. People-first business philosophy. Make people before it makes 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. The company is looked upon as a lifetime education center or a training center for life. It is no just simply a place where you
earn a salary. It is no just 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 fundamentally 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 is trust and he must give them as much responsibility as possible.
Regardless of how talented a manager may be, there is a limit to how much he can do by himself. 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.

Source: Project Construction Management

Max B. Fajardo, Jr.
Project Management
Wikipedia

Arch. Dennis C. de Villa

June 2011

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