Integrated Organizational Structure In The Construction Industry

For some, Project Management is still defined as a collection of planning, a variety of control methods and various other decisions. However this paper argues that the essential elements of Project Management in the construction industry is based on organizational issues, which include the way people are managed and organized throughout the project process. The distinction is rather important due to the fact that although the utilization of [] technical assessment tools and techniques are sophisticated, these methods are eradicated with an unorganized structure between various parties thriving to achieve misguided objectives. Technological training techniques and tools should enhance the management process after the appropriate objectives and organizational issues are in place.

Aim

The aim of the paper is to inform various parties in the construction industry of the importance of an integrated organizational structure.

Introduction

The characteristics of an effective project team are examined in this paper, followed by recommendations as to how an architect can develop and keep his own management team. Some of the essential elements are a culture of flexibility, shared interests, mutual support and a unity in purpose (Murray and Langford, 2004: 193). The leader, specifically, is being examined and the requirements of being a good project management leader are stipulated and the main influences are also discussed. The continuous sense of urgency is seen as the main drive behind the realisation of the construction and management processes. The general mindset in the management team should be one of a learning spirit and it must consist over the capacity to be able to adapt and change as requirements and goals change over time.

Method

Management and Organization

It is important to understand the term ‘Management and Organization’ prior to any discussion. Various authors offer a dictionary interpretation of the term, but Cleland & King (1983:15) probably offer this in the most useful manner. Cleland and King’s operational definition of management identifies the criteria of organized activities, objectives, relationships among resources, working through others and decisions. Cleland & King (1983:17) further states that ‘organization’ in essence consists of the various elements used to define management. It can be said that these two terms are interlinked concepts that should drive and support each other through the project management process.

Walker (2007:4) states that in order to maintain a successful construction process, organizations should be observed as the pattern of interrelationships, authority and responsibility that is established between the professional team, and all the contributors to achieve the main objective: client satisfaction. It is important to note that the management aspect is the dynamic impact that evolves in successful organization.

Defining Project Management in Construction

In the built environment this definition is well known throughout the theoretical field which is:

‘the planning, coordination and control of a project from conception to completion on behalf of a client requiring the identification of the client’s objectives in terms of utility, function, quality, time and cost, and the establishment of relationships between resources, integrating, monitoring and controlling the contributors to the project and their output, and evaluating and selecting alternatives in pursuit of a client’s satisfaction with the project outcome.’ ibid (2007:5)

It is evident that the term ‘resources’ mentioned above, is a general term used to accentuate on equipment, funds, materials but most importantly the relationship between people. Many contemporary definitions are not conclusive on these principles, where the project management process is referenced without the organization of people to achieve the final objectives.

It is important to implement theory with practice and to understand that these disciplines should support each other. Walker (2007:5) mentions that since these interrelationships have been devised there has not been a significant change within the practice. Authors often formulate new concepts and theoretical stances within the theoretical field, but this is of no use without it being observable or enforceable.

In the context of the previously stated definition, it is necessary to understand the management process as a cognitive approach of various fields and not to be narrow minded in evaluating the product in terms of time, cost and client satisfaction. Although these elements play an important part in the process it is the relationships built within the construction team that would insure future project employment.

It is interesting that Munns & Bjeirmi (1996:45) argue that there is a distinction between project management, on the one hand, and the project on the other. They state that the success within a project should be seen in the long run, where the performance of the building, over a period of time, should determine the success of a project. They blame project managers for having short term time and cost objectives, rather than focussing on the stakeholders’ [] needs. Separating these terms takes a narrow approach towards project management in general, knowing that client satisfaction should form the primary objective for any management process, along with the various aspects mentioned above.

Projects, Firms and Clients

There are two types of management systems within the industry: the way in which a project is managed and the management of a firm within itself. Walker (2007:8) illustrates in fig. 1 the various parties involved within the matrix management structure. However this is an idealistic structure because the various projects would seldom be dealt with by the same architect, general contractor and the variety of sub-contractors due to competitive tendering. But as an architectural practitioner one should understand the importance of the profession in the management structure. Due to the inconsistency within the management structure it is difficult to establish an effective growing relationship between the participants. The problem normally occurs when various firms should form a relationship on a working and individual level but do not want to waste time or money without the certainty of working together in the future. Walker (2007:8) further states that “relational contracting initiatives” have considered these weaknesses and have gone further to warn clients with multiple projects, but according to statistics the larger portion of projects are still managed in the traditional way.

Construction management, whether relational or traditional, are thus accomplished by a variety of firms that alter from one project to the other. It is important to understand that these companies are independent firms that should manage their relationships within the firm. A healthy project necessitates a well balances firm prior to the well managed relationship between companies. Each company (firm) has certain objectives to consider maintaining a well managed practice such as:

• Enhancing productiveness
• Improving services
• Keeping existing clients and
• Attracting future clients

Walker (2007:9) states that professional practices claim to be less driven by profit than the contracting and sub-contracting firms. But none the less, conflicts between the needs of individual companies and the needs of projects will still arise. i.e. what does an architectural practice do when the [] resources are limited and they should chose between the urgent completion of an existing project or undertaking a new project, knowing that the other project would be affected?

The objectives of the client are closely related to those of the project management objectives and the different firms involved. These are directly associated with the project and will be:

• Functional satisfaction
• Aesthetically pleasing
• Completion within the allocated time
• Completion within budget and
• Approved quality

The question arises: Who is responsible to insure that these objectives are met? In traditional construction projects architects would be obliged to meet these requirements. But who should solve these conflict situations within the project management period? And if the architects are required to solve these issues, would it be resolved to benefit the project to the extent to meet the client’s initial requirements?

It is ideal to have an individual responsible to overcome these various conflicts at an early stage, preventing unhealthy relationships between companies. These individuals or project managers should preferably be trained by the client’s organization itself, and this in turn establishes a close relationship between the client and the project team, where the project manager should be seen as the ‘middle-man’. However this is not always achievable and clients do not have the expertise or time to control their projects or train a project manager.

The Variety of Clients

Clients differ in various ways. It is important to note that there are a variety of objectives the client aim to satisfy. Contrast, in general, can be drawn between clients, the public and private sector, and multi-national and foreign clients whose objectives differ from home market objectives. The construction industry and the professions involved have to be flexible and skilled at these indifferences to maintain client satisfaction as an outcome. Walker (2007:11) explains how these practices should adapt their objectives according to the client’s vision and deal directly with the client to understand how the client’s organizations operate.

Contribution of Organization Structure

Hinings (2003) recalls the organizational structure as the heart of organizational theory. He states that structure is vital, because according to history, it has always formed the centre of the development of organizational theory and continues to be important to new and existing structural forms and contributes as a primary element to the thinking of managers. However, the organizational structure can only exist if various other factors are in place to allow a practice to perform adequately.

According to Walker (2007:12), for the successful implementation of construction project management, there are a few factors and elements to be considered:

• Behaviour
• Techniques and Technology
• Decision making
• Organizational Structure

Walker (2007:13) illustrates these factors in Fig 2. It is noticeable how closely these factors are related to each other but although these factors form the heart of the effectiveness of the organization process, one should keep in mind that external practice could affect the process. And if so, the project manager should compromise to keep the process in equilibrium. Walker does not deal with the external factors, but in many scenarios these are unforeseen influences i.e. political or economical changes.

Behaviour

Loosemore (1994) finds that the variety of skills required within the parties involved to execute a project leads to a subjective vision of the final product. These individual visions of a company, affect the effectiveness of the product and the need for an objective stance is required to envision the final product in a conclusive way. (Fig 3 – Dave Taylor)

Techniques and Technology

These are tools used by individuals to accomplish the product throughout the construction process. Scott (1992) suggests that there are three different dimensions of technologies: “Complexity, uncertainty and interdependence”. Technological complexity leads to uncertainty, especially structural uncertainty, and therefore affecting interdependency where more skills and an effective co-ordination system are required.

Decision Making

There are numerous specialists involved throughout the decision making process of a building. This illustrates the dynamics and complexity involved throughout the management process within the built environment. By stating this, it could be said that the decision processes are firmly connected within the organization structure that underpin the way people relate to each other and the effective workmanship between these parties.

Organization Structure

The organization structure should advice the decision making process and the use of technology and techniques as discussed above. It is a system that integrates these various factors to achieve a balanced relationship between the different companies involved. Walker (2007:15) mentions that this organizational structure is the responsibility of the managing executive and in turn achieving his/her final objective: client satisfaction.

The Learning Spirits of the Project Team

Architects prefer the initial phase of the development process, where the design and the concept development takes place, engineers on the other hand prefers the hands-on development of the project, during construction, the actual implementation of the plans (Murray & Langford, 2004: 201). The most important part of the learning process, however, is the reflection part, where evaluation takes place and all involved can learn from mistakes and wrong doings during the process. The architect, as project manager, can promote the reflection process and thus improve the learning experiences of the professional team. Constructive discussions, between the team members, of project development should be encouraged by the project manager; this often leads to innovative solutions to solve problems, adding to the learning experience. Feed back to all members of the team can only benefit the project as well as prospected future projects.

Communication and collaboration that leads to continuous experiments and the improvement and increase of the members’ problem solving skills, identifies a learning organization. The acquired knowledge obtained through this process is not only documented and stored for future use, but those involved will also benefit in the long run, as the new acquired skills and knowledge can be applied on any other projects, leading to more integrated and well developed management systems. Many of the solutions found during this learning process may still need adjustment; this implies that continuous control and monitoring must take place. Revans (1971:264) advocates ‘action research’ as an excellent method by which team members can develop their technical and personal skills.

Even though the aesthetics of a building and the designer’s personal design image gives the building its identity, some modern buildings nowadays acts merely as a shell to the functional dynamic implemented by a process engineer. Efficient design in terms of layout and cost is crucial. Close teamwork is essential in these buildings, it is also important to basically understand the discipline of all parties involved, this allows for better communication.

Assembling a new team every time a new project starts is inefficient and wastes a lot of money. Old knowledge, accumulated over a long period of time, can save time and money if the relationships between the team members are established and small indifferences or misunderstandings have been dealt with in the past. The reoccurrence of similar design problems are not common and this leads to standardized, tried and tested solutions for problems already been dealt with before. The conflict in interest is also much less, should a team already be established, as no one has something to prove. Often when a new team is working together a power struggle exists between some members of the team, who wants to enforce their power and influence on other members of the team.

It is thus beneficial to all involved to create a learning organization out of the project team. Excitement and innovation is more likely to happen if the team members have confidence in each other’s competence and integrity. The most important link in this process is the team leader who should continuously encourage creative thinking and constructive criticism as well as stimulate effective learning through problem solving experiences throughout the project.

Implementing Best Value

Thomas & Thomas (2005:170) describe the importance of the ‘integrated team’ and the understanding of the value criteria the whole team will be judged upon final evaluation. By accomplishing an integrated team they should “align their objectives” insuring they are pulling in the same direction rather than working against each other. (Fig4)

In order to deliver a project at the lowest cost (tender price) contractors often carry out the work to maintain maximum profit, thus leading to the evaluation criteria to be stricter. This in turn affects team work, and the relationships of various parties are at stake. It is vital to achieve value and quality of work from the initial stage eliminating certain factors that would affect the building project i.e. rework that contributes to the lack of crucial time. The principles of best value can be described as,

“the optimum combination of whole life costs and benefits to meet the customer’s requirements. This approach enables sustainability and quality to be taken into account whole life costs allows factors such as fuel efficiency and replacement cycles to be taken into account, as well as social example benefits to local people, good work force, management, community safety, diversity and fairness. Successful procurement strategies are likely to be based on whole life cost considerations that include subsequent revenue implications and not simply the lowest tender price.” (ODPM, 2003).

Thomas & Thomas (2005:173) further discuss the advantages and disadvantages of an integrated and non-integrated team. If an integrated team is established, would they disintegrate for the purpose of being more productive on a individual level?

Fig. 5 (173) illustrates a diagram of these communication strategies; both these illustrations offer their own benefits in terms of time, cost and quality. But the disintegration of a team often leads to:

• Rework
• Constant Evaluation
• Lack of Trust
• Overlapping Projects
• No drive for Quality Improvement
• Organizations becomes selfish focussed on their own goals and objectives

Multiple Systems of Communication as Illustrated in Fig. 4

Eagan (1998) writes that one should rethink construction, due to the fact that the clients are usually dissatisfied with the outcome of the final product. To obtain the client’s initial objectives it is necessary to work as an integrated team, where various team members work together without eliminating each other’s efforts.

The Integrated Team

Due to organizations that contract into their own cultural and technical silos, an integrated team cannot be established. It is required that the various practices and companies need to develop a combined intellect, skills and synergy of the project to deliver the appropriate quality of workmanship to benefit the process and the partner involved in the project.

In Egan’s book, Accelerating Change, Eagan (2002:85) advises a toolkit to achieve an integrated team. These guidelines should be referred to throughout the management process. He defines these conditions as:

A singular team, that is focussed on a common set of goals and objectives, delivering benefit for all concerned

A team so seamless, that it appears to operate is if it were a company in its own right

A team with no apparent boundaries, in which all the members have the same opportunity to contribute and all the skills and capabilities on offer can be utilized to maximum effect.

Any team is only as strong as its weakest link, and in the construction industry, a weak link can also have a negative effect on the other supporting systems. With a well organized program, these links decrease offering a more stable system as a whole. This cognitive approach enhances the relationships built during the process and a bond of trust is obtained. The management of these projects are a learning process on a big scale, but organizational skills acquired between the various organizations could be re-implemented on a smaller scale i.e. the individuals within these smaller companies. Thomas & Thomas (2005:63) illustrate the basic structure of an integrated team and a traditional chain. It is important to note, from these illustrations, that an integrated team will require understanding and commitment from the various practices and organizations to function as a system. (Fig 11)

Trust

Trust is elusive and could not be rated or quantified on a hierarchical basis, but it is of cardinal importance between team members to insure a healthy relationship. Because trust is based on a personal, emotional stance, it is difficult to measure these feelings, but Thomas & Thomas (2005:66) defines it as,

TRUST = POSSITIVE EXPERIENCES ÷ RISK

According to this measurement, as trust increases team members would act more honestly and the upcoming problems could be dealt with as a team and in turn the risks would be managed in an effective manner. Trust is a fragile emotion that could be lost in a short period of time, but this is where communication within the team is of the essence. Where one party feels that they experience dishonesty or discomfort, it is necessary to confront one another before the relationships is ruined.

Maintaining the Team

The leader of the building project’s most important role is building and maintaining an effective project organization. The ‘teamthink’ approach must be stimulated and a balance between convergent and divergent thinking (and the communication thereof) should be managed by the project leader. ‘Teamthink’ is where all the individual members spend time on finding the best possible solutions to various problems through the illumination of other solutions. During this process all views and opinions are granted a fair chance, but is then evaluated to determine the best solution (Murray & Langford, 2004: 205).

The team usually develops in four stages: forming, storming, ‘norming’ and performing. Forming is when the team is first established and everyone is being introduced to each other. Storming has to do with early disagreement, which is inevitable when different people need to work together for the first time. ‘Norming’ refers to the stage where the team has established effective ways of working together to achieve the best possible results. Performing is the point where the team starts producing effective and efficient solutions to the proposed problems and has developed into a mature, well functioning group. Most teams, unfortunately does not have the luxury of naturally undergoing this process, but the variations of effectiveness of a team will follow a pattern as suggested by Moore (2002):

A well prepared project may have the capacity to deal with or require different project management leaders at the different phases of the project. This, however, is not very often the case, because projects often relay on the communication and relationships between the team members. By starting over, both in terms of new people and new positions, in term of hierarchy, the process is delayed and this may cause conflict in the management process.

When managing a project, or even just a meeting, the management happens in two levels: a) the leader must manage the content, in terms of decisions made and the detailing of where, when, how and why and b) the leader is responsible for the social aspects, such as the individual’s ego’s and transforming arguments into solutions. It is thus the leader’s role to control all the involved individuals in order to benefit the overall project.

Partnering

If partners have worked together before it is easier to form successful partnerships. The main objective of partnering is to optimize project performance, this includes completing on time and within budget, with a reasonable profit margin to all involved and obviously the aim is to produce within an acceptable, agreed quality with zero accidents (Murray & Langford, 2004: 199). It is important that the partners, as leaders of the project remain loyal and on one side of the table, as conflict between partners, on top level, will cause the entire project to deminish.

When the team members have been identified, it is important to gather the team in a neutral venue where the main outcomes and objectives of the project can be discussed. This improves team spirit and open up communication. This workshop setup usually fosters commitment to the success of the project. The architect should remember that there is no such thing as a optimum design and therefore the design process should continue and all suggestions accepted and tried. The main objective of such a workshop is to encourage cooperation between the team members.

A summary of best practice methods:

• High performance teams must be selected and chosen, it is not something that happens by chance.
• A good team leader leads decisively yet gently with a firm focus on the clients requirements
• Effective teams are self-motivated, people orientated, supportive and flexible environments are created
• Roles, responsibilities, procedures and communication channels should be clearly defined
• The value of contributing small groups should be recognised and the leader should not force his power onto every situation
• All members of the team should be treated as equal partners
• The project should be seen as a learning opportunity to all, with feedback and reflection sessions
• The team must be developed and maintained by the project leader, this must continue throughout the whole project.

Conclusion

This theoretical paper has tried to illustrate what should be done in order to create a successful project team. It should be noted that all the mentioned methods and techniques have made sense in the past and may only be applicable to some situations. The project leader has the responsibility to read every situation and then react appropriately to every individual event. It should, however, be noted that generally, virtual teams (as a result of the technical explosion) are not as successful as teams that meet face-to-face on a regular basis. Most people prefer personal interaction in an encouraging and constructive environment.

Case study: Cape Town International Convention Centre project (CTICC)

Background

In 1999 the Western Cape Provincial Government, the Cape Metropolitan Council, the City of Cape Town and Business Cape joined forces to develop a truly world-class convention centre on a 6.1-hectare site on Cape Town’s northern foreshore. To this end, they formed the Cape Town International Convention Centre Company (Pty) Ltd (CONVENCO). CONVENCO was thus tasked to develop an international standard, multi-purpose conference, convention and exhibition centre ) which, hitherto, was a missing piece of tourism and business infrastructure in the Western Cape.

Project description

CTICC is a world-class undertaking, providing 25,000 m2 of space featuring high levels of quality, and exceptional interior and exterior design elements. The project comprises the development of a multi-purpose conference, convention and exhibition centre. It is a three-storey building including numerous facilities, such as an integrated deluxe hotel, dedicated column-free exhibition space, and extensive banqueting and conference facilities. Such an ambitious project required meticulous design of auditoriums, ballrooms, meeting suites, breakout blocks and exhibition halls. CTICC aims to provide a landmark feature at the city/waterfront gateway, and has an impressive domed external appearance with numerous glazed concourses and incorporating internal landscaped areas.

Project team for the construction phase of the CTKC

The two main appointments were the project manager and the design architect. Foreshore Architects was named as the joint venture responsible for developing the total design concept, this is an association of various architectural practices including:

• Revel Fox and Partners (architects and planners);
• Van der Merwe Miszewski Architects;
• Lucien le Grange Architects and Urban Planners;
• Stauch Vorster Architects;
• Magqwaka Associates, Architects.
• Procurement management strategy

Before examining the role of the sub-contractor management in the successful completion of CTICC, it is essential to understand the socio-political situation within post-apartheid South Africa. CTICC was built in South Africa’s Cape metropolis at a time when the country and its construction industry are going through significant restructuring (Dept. of Public Works White Paper, 1999). Top of the list of the South African Government’s Reconstruction and Development Programme (RDP) is provision of infrastructure designed to bring relief to people in the form of jobs and economic business development. Expansion of business, the government contends, would increase potential for investment for small, medium and emerging contractors (particularly those representing affirmative business enterprises [ABEs] and previously disadvantaged individuals [PDls]). PDls are a key aspect of this situation since they were often long-term unemployed and/or unskilled workers from the townships selected as a means to expand economic activity without particular reference to the skills of the individuals. On-the-job training therefore became an inherent component of the development of all ABEs employed on the CTICC.

Essentially, the RDP policy framework requires that the development of the construction industry must respond to the broad social and economic imperatives of the country. These include sustainable employment creation, affirmative action, active promotion of small, medium and emerging enterprises (SMEEs). The vision is for a construction industry policy and strategy that promotes stability, fosters economic growth and international competitiveness. Furthermore, that the policy should create sustainable employment, which should simultaneously address historic imbalances in employment opportunity as it generates new capacity for economic development. In this regard government is willing to promote appropriate and innovative public-private sector partnerships, which build on the strengths of respective sectors to promote investment in the delivery of infrastructure.

Management of sub-contractors at the CTKC project

The procurement of sub-contractors was in line with the targeted procurement policy. Up to well over 200 sub-contractors participated in the project. To ensure equity, targeted contract procurement goals were established. To ensure that the choice, performance, workmanship, health and safety issues, sub-contractor design, manufacturing and installation were all properly managed and co-ordinated, a targeted procurement strategy, support and management system was put in place.

Time, cost and quality performance of sub-contractors

Performance was achieved through strict work breakdown, which ensured that each sub-contractor only performed their part of the ‘pie’ but while working as a conduit in the supply chain. The partnering arrangement was driven down the supply chain to give sub-contractors a feeling of ownership of their part of the pie. A particularly innovative feature of the project was how the ethos of private public partnership was driven down the supply chain through formation of joint ventures between established contractors and ABEs or PDls. These joint ventures were encouraged as a way of ensuring performance on the part of ABEs and PDls. It should not be inferred that the ABE or PDI participants were in some way inferior to other potential bidders for contracts. Indeed, the performance of all participants has been seen to be excellent. However, the political and social imperative for this project was that it should be a success in all dimensions. To this end, Foreshore Architects along with all the other design team members had to be much more proactive and collegiate in their approach to dealing with sub-contractors. Sub-contractors were not appointed with the aim of devolving risk to organisations often unable to handle such exposure. On the contrary, the project organisation and management focused on the need for mutual support of each other’s activities in the successful delivery of the common aim.

The role of the architect in achieving this very positive aim was through the provision of information at the earliest time possible. Furthermore, the architect had a regular on-site supervisory role in the assessment of quality at the very lowest level within the project. To this end, the architectural input was always physically available and ever present on-site, rather than the traditional tendency for architects to be physically remote. This was a conscious effort to facilitate team working. Interestingly, in spite of going against the ‘normally’ expected role of the architect, in many ways this is a step forwards into the past, with the architect being much more closely linked to the way in which, and the quality of, the work being conducted on site. By adopting such an approach to assisting both ABEs and PDls it was simultaneously possible for the architectural team to retain a much higher degree of design control than may have been anticipated with a similar design and contract elsewhere.

Conclusions – lessons to be learned from the CTKC

Today, construction is so technologically advanced that no construction firm can or even wishes to conduct the building process in its entirety. As construction technology continues to advance so does the requirement to sub-contract specialist work and trades to those who specialize in the most appropriate discipline at a lower cost than a non-specialist. Such an approach usually provides an achievable solution (on the basis of previous experience and expertise), in less time and to better quality and value. Indeed, most projects today will have even up to 90 percent of their work delivered by sub-contractors with the main contractor only playing a management role. Causes of increased levels of sub-contracting have been seen to be; technological progress leading to greater specialisation, promotion of an enterprise based culture centred on individual initiative and drive towards self employment and specialisation, and the effects of employment taxes on firms.

Once sub-contractors have been appointed, it is essential for any project team to put in place the policies and infrastructure necessary to facilitate the effective working of the design and delivery teams. This can be seen to be highly effective in that the single common office space allowed the physical co-location of team members close to the site and thus in a better position to be able to influence operational activities. This deliberate policy of co-locating the team meant that the architects in particular had a much more ‘hands on’ way of doing business than in many similar sites worldwide.

Underpinning the two main themes of value based sub-contractor selection working within a CE framework is the provision of an effective IT infrastructure and relevant protocols for its efficient utilisation. IT infrastructure and software were significant items of investment for the CTICC project and procedures for handling such technologies had to be sufficiently robust and transparent to enable a CE philosophy. Probably the most important aspect of IT implementation for architects is to consider that if a value base of sub-contractors is created the integrity of that list has to be maintained, otherwise the effectiveness of such an approved sub-contractor list in saving time in selecting contractors is lost. Much collectively is made of the need to implement IT systems, however the example of the CTICC has indicated that the technological advancement of the database itself, or indeed any accompanying software, is not significantly important. What is most important is a willingness to use and give access to information for as broad a spectrum of stakeholders and subcontractors as possible. The effectiveness of the approaches adopted, highlighted by the project being delivered within programmed time and budget, demonstrated the epithet quite clearly that ‘Knowledge is the only factor of production not subject to diminishing returns’.