Construction Project Organization

Unit IV: Construction Project Organization

• The unit focuses on construction project organization and its components

Desired Learning Outcomes

• Select the best type of organization structure.
• Classify and identify the different types of contractors.
• Understand the role of the construction project manager.

Outline

• Construction Organization consists of the structural elements, major element, and principles
• Organizational Systems & Structures include functional, projectized and matrix organization structures
• Project Management Office and all types of PMOs

What is Organization?

• An organization is a group of individuals working together for a common goal.
• Success relies on employee performance, not just organizational design.
• Ideal organizations combine good structure and executive skills.
• Management structures must be realistic and responsive to change.

Structural Elements of an Organization

• Men: All members from top to bottom.
• Materials: Resources for distributing functions and achieving goals.
• Machine: Tools for producing desired output.
• Methods: Procedures and ways of doing things.
• Money: Financial resources.

Major Elements of Organizational Structures

• Distribution of functions: How functions are divided and related, horizontally and vertically.
• Authority relationships: Vertical and horizontal relationships.
• Communication and decision processes: How formal decisions are made and by whom.
• Policies: Decision rules or guidelines established.

Principles of Good Organization

• Principle of objective: A clear objective guides future planning, integrates policies and ensures consistent action.
• Analysis: Sound judgment involves understanding business needs and ensuring projects are completed on time and within budget.
• Simplicity: Achieve objectives by eliminating unnecessary activities and retaining practical ones.
• Functionalism: Focus on main business functions, not individuals, allowing for proper work distribution.
• Departmentalization: Large scopes of operation achieve a smoother flow through functions, products, location, or project.
• Centralization of Authority and Responsibility: It ensures fixed authority, responsibility, and clear reporting channels.
• Limited Span of Control: The number of subordinates a manager directly supervises should be limited.

5 Types of Contractors in the Philippines

• The construction industry in the Philippines relies on various types of contractors for accuracy in building roads, buildings, and other structures.

General Contractors

• They are responsible for overseeing the entire project from start to finish.
• Ensure everything is going according to plan and manage all workers involved in the project.
• Key attributes include flexibility, versatility, exceptional project management skills, and the ability to coordinate diverse tasks.

Specialty Contractors

• They focus on specific aspects of construction, bringing specialized skills.
• Examples include electrical, plumbing, heating, ventilation, and air conditioning (HVAC) specialists.
• Specialized skills and in-depth knowledge are key attributes, collaborating with general contractors for larger projects.

Subcontractors

• They are hired by general or specialty contractors to handle specific tasks within a construction project.
• They execute specialized aspects.
• Key attributes include specific expertise in a trade or task and collaborative work to achieve project goals.

Design-Build Contractors

• They streamline construction by providing integrated design and construction services.
• They manage the entire project from concept to completion.
• Comprehensive project management, faster project delivery, and potential cost savings are key attributes.

Civil Engineering Contractors

• They focus on large-scale infrastructure projects like roads, bridges, and dams.
• They bring expertise in civil engineering principles and structural design.
• Specialized knowledge in civil engineering, structural design, and adherence to strict safety are key attributes.

Overview of Organizational Structures

• Crucial for distributing roles, responsibilities, and authority in construction.
• Affect communication, decision-making speed, and project efficiency.
• Types are functional, projectized, and matrix.

Functional Organization Structure

• The organization is divided into departments based on specialties such as engineering, procurement, and finance.
• Employees report to functional managers, and project coordination happens through these departments.
• Characteristics: Clear hierarchy and chain of command.
• Pros: Efficient use of resources and clear lines of communication.
• Cons: Poor interdepartmental communication, delayed decision-making, and low project visibility/flexibility.

Projectized Organization Structure

• Organization is structured entirely around projects.
• Project managers have full authority over the project team and resources.
• Teams are organized by project, enabling faster decision-making.
• High team cohesion, clear accountability, and full-time project members.
• Resource duplication across projects and potential specialist underutilization.
• Project team members have less job security.

Matrix Organization Structure

• It's a hybrid of functional and projectized structures.
• Employees report to both a functional and a project manager.
• Three variations: Weak, Balanced, and Strong Matrix.
• Dual reporting relationships and optimized resource utilization.
• Better communication, a flexible structure, potential for role conflict and demands conflict resolution skills.
• A complex management structure.

Typical Construction Project Hierarchy

• Owner /Client serves as the ultimate decision-maker and the source of project finance.,
• Construction Project Manager (CPM) connects the owner's vision to the site's implementation.
• Design Consultants (Architects, Engineers) provide technical specifications, plans, and assurances.
• Contractors and Subcontractors coordinate personnel, materials, and ensure work follows plans.
• Site Supervisors/Foremen serve as the authority on the job site.
• Skilled and Unskilled Laborers carry out construction work, impacting schedule and quality

Roles and Relationships of Key Players

• Owner/Client: Ultimate decision-maker and source of project finance. Determines project objectives, budget, and schedule.
• Construction Project Manager (CPM): Connects the owner's vision to implementation, handling scheduling, planning, cost management, and coordination.
• Design Consultants (Architects and Engineers): Provide technical specifications, comprehensive plans, and assurances of conformity.
• Contractors and Subcontractors: Coordinate personnel, materials, and ensure work follows plans. Concrete, plumbing, and electrical work are specialized by subcontractors.
• Site Supervisors/Foremen: Authority on the job site, converting plans into actual work and overseeing daily operations and safety.
• Skilled and Unskilled Workers: Carrying out construction work, impacting schedule and quality.

Emphasis on the Construction Project Manager's Position

• CPM is vital and responsibilities include integration, scope, schedule, cost, quality, and communication management.
• Griffith and Watson (2004) stated the project manager is the key figure in converting drawings into buildings and aligning people toward project goals

Project Management Office (PMO)

• It is a centralized organizational entity and standardizes project-related governance processes.
• Facilitates the sharing of resources, methodologies, tools, and techniques.
• PMOs help in governance structures establishment, standardized project management procedures, and knowledge management.
• PMOs establish support services such as training, mentoring, and performance reporting

Types of PMOs

• Supportive PMO: Offers information, training, best practices, and templates, with limited authority. Ideal for independent teams.
• Controlling PMO: Demands adherence to methods, maintains flexibility, and enforces governance. Perfect for moderate standardization.
• Directive PMO: Oversees and supervises every project, with project managers often as PMO employees. Common in large construction firms for centralized control.

Emphasis on the PMO's Support to the Construction Project Manager

• Construction Project Managers (CPM) benefit significantly when the PMO:
  • Provides access to standardized tools and procedures.
  • Offers real-time reporting for schedule, budget, and risk.
  • Delivers training and mentorship.
  • Assists in resource planning and conflict resolution.