Chapter 1

The Concept of Project Management

CC603- PROJECT MANAGEMENT

By:
Mohd Rushdy Yaacob
Rafikullah bin Deraman
Lecturer
Politeknik Sultan Haji Ahmad Shah

Chapter 1 - Management Concept

Unique Building
Around The
World

Chapter 1 - Management Concept

Chapter 1 - Management Concept

Problem That
We Face in
Construction
Industry

UAE researchers perspective;

Drawing s preparation and approval
Inadequate and poor planning
Lack of quick decision making from owner
Lack of manpower
Lack of proper supervision and management
Lack of labour productivity
Lack of labour skills
Lack of availability of equipment and material
Difficulties in taking approvals from goverment
authorities and committees
Contractors financing problems
Changes in materials

Chapter 1 - Management Concept

Literature Review

Chapter 1 - Management Concept

DEFINITION OF MANAGEMENT
the process of reaching organizational goals by working with and
through people and other organizational resources
Certo, 1985
the process of planning and decision-making, organizing, leading and
controlling an organization
Griffin, 1987
the process of acquiring and combining human, financial, informational
and physical resources to attain the organizations primary goal of
producing a product or service desired by some segment of society
Pringle, Jennings and Longnecker, 1988
the process with and through other people to achieve organizational
objective effectively using limited resources in fluctuate or different
situation
Robert Kreitner, 2009

MANAGEMENT CONCEPT

An effort to use the limited

resources to achieve
organizational goals effectively

Chapter 1 - Management Concept

tS

itu

Work
with & through
other people

n
re

Di
ffe

io
at

re
n

itu

tS

ffe
Di

at
io
n

BASIC COMPONENT OF MANAGEMENT

Impressive
and Efficient

Organizational
Goals
Limited
Resources

Different Situation
Figure 1.1 Basic Component of Management

Chapter 1 - Management Concept

Levels of Management

The departmental managers constitute middle

level. They are responsible to the top
management for the functioning of their
department. They devote more time to
organizational and directional functions.
Lower level is also known as supervisory /
operative level of management. It consists of
supervisors, foreman, section officers,
superintendent etc. Those executives whose
work has to be largely with personal oversight
and direction of operative employees

Chapter 1 - Management Concept

It consists of board of directors, chief executive

or managing director. The top management is
the ultimate source of authority and it manages
goals and policies for an enterprise. It devotes
more time on planning and coordinating
functions.

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IMPORTANCE OF
MANAGEMENT
a)
Acquisition and utilization of resources
Management performs efficient acquisition
effective development and utilization and
proper coordination of resources
b) Environmental adaptation
Management adopts organization to changing
environmental forces.
c) Goal achievement
Management achieves goals by balancing the
requirement of jobs and people.

Chapter 1 - Management Concept

Chapter 1 - Management Concept

d) Problem solving
Management solves organization problems.
It identifies and evaluates various
alternatives and choose appropriate course
of action.
e) Performance control
Management measures and evaluates the
actual performance.
f) Social responsibility
Management anticipate and act before hand
to social expectation

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BASIC MANAGEMENT ACTIVITIES

Define objectives
Define resources needed
in the project
Develop strategy

PLANNING

IMPLEMENTATION

Distribute resources
Supervise implementation
Coordinate activities
Motivate workers

Compare between progress

and planning
Reporting
Settle problems

CONTROLLING

Figure 1.2 Basic Management Activities

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Chapter 1 - Management Concept

DEFINITION OF PROJECT
Unique set of coordinated activities, with definite starting and
finishing points, undertaken by an individual or organization to
meet specific objectives within defined time, cost and performance
parameters using limited resources
Punmia P.C dan Khandelwal K.K, 1989
A novel undertaking or systematic process to create a new product
or service the delivery of which signals completion. Projects are
typically constrained by limited resources.
A unique venture with a beginning and an end, undertaken by
people to meet established goals within defined constraints of time,
resources and quality.
Systematic process for achieving a distinct objective. The system'
consists of a period of planning followed by a period of 'doing', and
this system is repeated at every level of detail. These two 'periods'
are the genesis of the project life cycle.

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DEFINITION OF PROJECT

Limited
resources

Unique

Limited
period of Time

Constraints

Not
repetitive

Defined goals
Project Characteristics
Figure 1.3 Project Characteristics

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Chapter 1 - Management Concept

TYPE OF CONSTRUCTION PROJECT

Construction Project

Residential
construction

- Single-family
homes
- Multiunit
town houses
- Apartments
- Condominiums
- etc

Building
construction

Retail stores
Schools
Universities
Hospital
Mosques
Office towers
etc

Industrial
construction

- Heavymanufacturing
Plants
- Nuclear power
plants
- Mine
developments

Figure 1.4 Type of Construction Project

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Chapter 1 - Management Concept

Heavy
construction

Dams, tunnels
Flood control
Irrigation
Bridges
Airport
Highways
Harbors, etc

PROJECT CONSTRAINTS

st
Co

Environmental
Issues

Tim
e

Good Relationship with Clients

Performance
and Technology

Resources

Quality
Safety

Law

Figure 1.5 Project Constraints

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Chapter 1 - Management Concept

DEFINITION OF PROJECT MANAGEMENT

Planning, controlling and coordinating a project from beginning stage to
completing the owners need which ensure that the project finish on time,
on budget and also on quality.
The Chartered Institute of Building, UK
The process which project manager plan and control all the activities in a
project, use and distribute all of resources (money, time, information,
material, and equipment) to achieve goals, standards, and objectives that
predetermined in the beginning of project stage (based on time, cost,
resources and quality).

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Chapter 1 - Management Concept

DEFINITION OF PROJECT MANAGEMENT

Project management

Result

On time
On budget
On quality
Good relationship
Environmental friendly
Good safety
Good performance/technology

Figure 1.6 Project Management

Chapter 1 - Management Concept

Projects
goals

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DUTIES OF PROJECT MANAGER

Make a report to project coordinator
Check the quality of work and safety on construction site
Arrange all the facilities at the construction site before work
commences
Comunicate with clients and consultans
Implement quality control procedures
Attend all meetings with clients and consultants
Prepare and present the main program to the client
Conducting meetings of sub contractors and suppliers
Monitor the work performed by sub contractors
Overall planning, coordinating the activities of the
construction site, site management and expenditure
Monitor the progress of work and cash flow
Leading the team of engineers, quantity surveyors, land
surveyors, quality coordinator at the site and supervise the
construction project.

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CONCEPT OF PROJECT MANAGER BETWEEN:

a. TRADITIONAL SYSTEM

Chapter 1 - Management Concept

The designer does not have direct link with the specialist and all
communication is via the main contractor who in many cases will not
accept design liability.
This results in a grey area of responsibility and liability as information is
passed from one to the other.
In general, the designer or the architect is the leader of the project and
represents the client to implement the design process.
The architect becomes more of a surrogate client and takes on the
responsibility to make sure the project is delivered on time and on budget.
The traditional method of procurement, the client appoints independent
consultants, on a fee basis, who fully design the project and prepare
tender documents upon which competitive bids, often on lump sum basis,
are obtained from contractors.
The successful tendered enters into direct contract with the client and
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carries out the work under the supervision of the original design
consultants.

Chapter 1 - Management Concept

In the traditional procurement, the professionals are empowered

to use best practice defined by their own professional bodies and
education.
The basic workforces in general play an inactive role towards the
design and planning process.
The basic workforces here work consistently if there are no
interruptions in the production process.
Such an environment generally encourages an adversarial
attitude among the design teams.
In terms of cost benefits, reduction of up to 30% can be
achieved. While a reduction of 40% in delivery, time can be
achieved but there is a little change in the quality of the product.
Traditional procurement system characteristics :
Long construction period
Consecutive organisation
Clear contracting relations

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Procurement Strategy
Quality

Cheapest

Best

Economical

Adequate

Reasonable
Fastest

Time

Chapter 1 - Management Concept

Cost

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Chapter 1 - Management Concept

Time
Due to its linear or sequential approach, the traditional
procurement system has been identified as the slowest project
delivery approach.
However, this approach is more preferable because it provides
clear accountability and better design and construction control by
the client.
Since the pre-contract stage of this system is longer, more time is
available for the client and the project team to scrutinize and
review the design before construction.
Cost
This system provides more price certainty to the client at the very
early stage of the project.
It also gives the client firmer and more competitive price because
the design plus the complete working drawings have been fully
developed and detailed out prior to tendering.
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It eliminates any design or construction ambiguity or uncertainty
which often causes the contractors to unnecessarily inflate the
price.

Quality
The traditional procurement system also provides a high degree of quality
certainty and functional standards.
It is also a system that provides an opportunity for the building owner to
combine the best design, management and construction expertise
between consultants and contractor.
It also provide more time for client and consultants to review and fully
develop the design and specification thus allowing better documentation
preparation.
However, this system does not provide opportunities for contractor to
contribute his construction technology and management expertise
because they only come into the scene after the design has been fully
developed and approved.

Chapter 1 - Management Concept

In the case where bill of quantities is used, the bidding tend to be more
fair as such the project cost is also lower.
The system also better cost control as such cost increase due to
variations is
minimized, but works were often disrupted when there are too many
variations
(due to unforeseeable problems) and it tend to cause the cost to inflate.
(Masterman, 1996).

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Chapter 1 - Management Concept

The Linear or Sequential Process of the Traditional Procurement System

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concurrently to each other, thus reducing the overall project development

period
considerably.
As a single entity responsible for both the design and construction, the
contractor is able to control not only the construction time but also the time
reserved for the design of the project, thus reducing the overall contract
duration.
In this type of procurement system, the contractor has always been selected
based on its vast experience, knowledge and competency in construction, as
such by giving it the design responsibility, the contractor very often able to
reduce construction time.
This is done by him rationalizing the design and construction process and site
activities.

Chapter 1 - Management Concept

b. DESIGN AND BUILD AND TURNKEY SYSTEMS

Time
Design and build and turnkey project procurement system are called fasttracking or build-it-fast project delivery system where the design and
construction are integrated.
The design free pre-tender process allow for earlier construction date. It also
allows the process of detail design and construction to run almost in parallel and

Cost
Although the cost is fixed at the tender stage and is subject to design
changes, it is often higher than the traditional contracting system.
Apart from the fact that very limited contractors are invited to submit
tenders, the lack of design and specification detailing during tender, has
made the contractors to jack up the price to allow for many uncertainties. This
is because once accepted, the tender price will be the final contract sum.
It is not subject to change, unless there are variations required or instructed
by the client. Such additional cost cannot be avoided because under this
procurement system the contractor will to take much of the financial risk.
However, as many have claimed, the significant cost saving in this type of
procurement system is made through the reduction of the overall
development period.
The cost of contractors uncertainty can be set-off by the reduction in loan
interest and early financial return or benefits.
Cost saving may also be made when the contractor applies his construction
knowledge and experience to simplify design and work.
At the same further cost saving can be made when the client offer the
contractor some form of incentive if he is able to save a significant amount of
cost.

Quality

Chapter 1 - Management Concept

The integration of design and construction allows the contractor to

utilize his knowledge and experience to develop much compacted
and coherent work program and to develop more efficient design and
project control programmed.
At the same time it allows the contractor to be innovative to further
improve the construction process and techniques thus allowing for
better work and process quality.
However, it is more often found that the quality of work under this
contracting system tend to be questionable.
The assigning of the designing and construction to a contractor has
caused the client to loose control of the design and supervision of the
work.
This is especially so when the client does have his own team of
consultants. As far the contractor is concerned, they tend to cut
corners in order to maximize their profit, especially when they feel
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that they have under price their quotation during when tendering for
the work.

Chapter 1 - Management Concept

The Integrated Process of Project Designing and Construction in the

Design and Build Procurement System

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Procurement Strategy

Client

Inspector
Superviso
r Q.S.

Designer
Contractor

Client

Inspector
Supervisor

Contractor
Designer

Chapter 1 - Management Concept

Traditional delivery
Design and build system
Turnkey, Package deal

Subcontractors
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